Re: [OPE] Electricity solutions: decommodify (by stealing)

From: Alejandro Agafonow <>
Date: Wed Oct 29 2008 - 07:20:19 EDT

Patrick B.: “Because of the residual bias towards supplying large consumers, the post-apartheid government and Eskom simply neglected the implications of an eco-social benefit analysis for low-income people, focusing instead on holding down costs. In contrast, providing cheaper supplies in the form of a free lifeline subsidy, as mandated in the Reconstruction and Development Programme, was not on the politicians’ agenda, even when protests broke out in townships from Cape Town to Durban to Johannesburg. The main reason was that such subsidies disincentivize the drive to corporatize and privatize electricity. […]‘ANC-led local government will provide all residents with a free basic amount of water, electricity and other municipal services, so as to help the poor. Those who use more than the basic amounts will pay for the extra they use’ (African National Congress 2000). Until 2005, Eskom bureaucrats ignored the promise […]”   Hello Patrick!   Yes, a surcharge that penalizes electricity consumption over average might be interpreted as encouraging the pattern consumption of low-income people, so this policy could form part of an eco-social benefit analysis.   Nevertheless, focusing on holding down costs is not necessarily a non-progressive principle. Since electricity production experiments decreasing costs to scale (increasing returns to scale), the expansion of the production could benefit poor people under the right pricing framework.   According to what you describe, under the capitalist pricing framework supported by the Electricity Supply Commission  of South Africa (Eskom), if they have any interest in holding down costs is because this would help to increase the difference between costs and prices, therefore increasing their profits against poor people’s interest. This is also contradictory since Eskom, to be able to charge the highest price, has to reduce the amount of electricity power available, i.e. if Eskom reduces the amount of the service it will experiment an increase in its cost.   But in Market Socialist pricing framework there is no contradiction between a maximum expansion of the production and the lowest price of the services –this is at least the hope of my two-level solution.   Of course, a surcharge that penalizes electricity consumption over average at the end would reduce the amount of the service consumed and produced, pushing the prices up. But this apparent contradiction is due to the environmental constraints that any society faces. The important thing is that we can politically mange to reasonable deal with this contradiction.   Kind regards,Alejandro Agafonow ________________________________ De: Patrick Bond <> Para: Outline on Political Economy mailing list <> Enviado: martes, 28 de octubre, 2008 16:21:46 Asunto: Re: [OPE] Electricity solutions: decommodify (by stealing) Alejandro Agafonow wrote: > > We can use a surcharge penalizing electricity consumption over average in very category we devise for classifying consumers: industrial, residential, etc. This is a political decision that might complement quasi-market. > That's the plan the Soweto Electricity Crisis Committee embarked upon, but first they had to liberate electricity from the meter box: Decommodifying electricity in post-apartheid Johannesburg By Patrick Bond and Peter McInnes in H.Leitner, J.Peck, E.Sheppard (Eds), Contesting Neoliberalism: The Urban Frontier, New York, Guildford Press, 2007, pp.157-178. 1. Post-apartheid neoliberalism Apartheid’s formal urban system was meant to have been dissolved by April 1994, when Nelson Mandela and the African National Congress won South Africa’s first democratic elections. But residential segregation and the gender-discriminatory migrant labor system have persisted. Economic inequality has widened, with attendant spatial implications. National elites and urban managers attempted to tame social unrest and lubricate the transition from racial apartheid to class apartheid. Yet at the lower rungs of the society, the early and mid-2000s witnessed hundreds of intense contestations of power, including electric power.   This chapter reviews South African neoliberalism (Section 1) in part by focusing on the electricity sector (Section 2) and possibly the most famous case of an urban anti-capitalist protest group in contemporary Africa: the Soweto Electricity Crisis Committee (SECC) (Section 3). The Sowetans campaigned for access to basic services beginning in 2000, illegally reconnecting electricity to thousands of households disconnected due to poverty. As we write, in mid-2005, the SECC is mired in ideological strife and interorganizational competition with another socialist community movement in Soweto, and may suffer the classical problem of a downturn in social movement activity after some notable victories. Nevertheless, the SECC’s militancy, analytical vision and successful reconnection tactics catalyzed similar activism across South Africa as well as brought substantial international admiration, and its socialist manifesto captured the imagination of
 anti-capitalists of all stripes. No matter the SECC’s fate, the label ‘ultraleft’ given to it by president Thabo Mbeki and his Moscow-trained colleagues in 2002 indicates an enduring record of struggle.   Before considering the rise of the SECC in the context of urban neoliberal public policy, we ask a broader question about the new ruling elite: ‘were they pushed or did they jump?’ The ANC adopted free-market macroeconomic and microdevelopment policies even before 1994. The South African case is not so unusual, as there were many democratic transitions from the 1970s-90s that allowed popular oppositional movements access to power, but only under restricted conditions known as ‘low-intensity democracy’, with the new regimes constrained by debt repayment and neoliberal policy implementation. These ranged across Southern Europe, the cone of South America, Eastern Europe, East Asia and parts of Africa.   In South Africa’s case, because of a broader structural crisis in capitalism dating to the 1970s, white elites finally agreed to share power during the late 1980s. This arrangement facilitated a new round of capital accumulation and dampened the class and community struggles that were making life unprofitable and uncomfortable. By 1994, a small group of leaders dominated strategic discussions in the country’s mass popular movements - the Congress of SA Trade Unions (Cosatu), many of the NGOs, civic associations, women’s and student/youth groups, and even church-based liberation organizations. While preventing pressure from below emerging into a full-fledged challenge to the ANC government, the leaders promoted a ‘corporatist’ (i.e., elite-pacting) political style which further demobilized, disoriented and disillusioned the base. The results included both decreasing electoral turnouts and the decay of the mass organizations’ branch
 structures, at the same time that the objective socio-economic conditions of the majority worsened considerably.   Soaring unemployment was the government’s biggest single failure, by all accounts. Falling tariffs on imported industrial machinery allowed automation to kill hundreds of thousands of jobs, while many more tens of thousands in vulnerable industries were eliminated thanks to imported consumer goods from East Asia (Altman 2003). Setting aside agriculture, the number of formal sector jobs in South Africa in 2004 was less than the same figure two decades earlier. During the 1990s, large employment declines occurred in mining (47%), manufacturing (20%), and even the public sector (10%) (Nattrass 2003:142). Officially, the country’s unemployment rate rose from 16% in 1995 to 31.2% in 2003 (Statistics South Africa 2001a, 2003:iii). Adding to that figure the category of ‘frustrated job-seekers’ (i.e., those who have given up looking for employment) raises the percentage unemployed to 42%. The rate for African unemployment by this measure exceeded 50%
 in 2002, compared to 6.3% for whites (United Nations Development Programme 2004).   In rural South Africa, the African women’s unemployment rate (including those who have given up looking) rose to 54%, compared to 42% for rural men (Gelb 2003:9). Substantive income-generation possibilities for a huge share of the population – especially the women who traditionally subsidized the migrant labor system – are nearly non-existent, just as during apartheid. Indeed, the system of racial oppression perfected in the middle of the 20th century was also, primarily, a system of gender-based super-exploitation that made possible migrant labor throughout the Southern African region. South Africa’s urban capitalist managers designed a subsidy from the rural areas so as to lower the cost of workers in the mines and factories. Economic development was, according to the Chamber of Mines, dependent upon this system. As a leading mine official testified to a government commission in 1944, ‘The ability of the mines to maintain their native
 labor force by means of tribal natives from the reserves at rates of pay which are adequate for this migratory class of native, but inadequate in practice for the detribalized urban native, is a fundamental factor of the economy of the gold mining industry’ (cited in Wolpe 1972; see also Legassick 1974 and O’Meara 1996). The migrant ‘tribal natives’ did not, when they were young, require companies to pay their parents enough to cover school fees, or pay taxes for government schools to teach workers’ children. When sick or disabled, those workers were often shipped back to their rural homes until ready to work again. When the worker was ready to retire, the employer typically left him a pittance, such as a cheap watch, not a pension that allowed the elderly to survive in dignity. From youth through to illness to old age, capitalists were let off the hook. The subsidy covering child-rearing, recuperation and old age was provided by rural African
 women. The central lesson from this crucial aspect of apartheid was that capitalism systematically looted the ‘bantustan’ areas, especially women, which supplied such a large proportion of workers. The post-apartheid period is characterized by insignificant structural changes in the migrant labor system and in these power relations, and indeed some reversion to older tribalist systems of patriarchy as a function of restored powers for traditional leaders.   As even Statistics South Africa admits, what was amongst the world’s worst income inequality rankings actually worsened after 1994. According to an October 2002 report, in real terms, average black ‘African’ household income fell 19% from 1995-2000 (to the purchasing-power parity level of $3,714/year), while white household income was up 15% (to $22,600/year) (Statistics South Africa 2002). The ruling party’s rebuttal is that major asset transfers mitigated the damage of worsening income inequality, for example in household electricity: ‘There have been around 3.8 million new electricity grid connections since 1994. This means that the number of households with electricity had increased from 32% to 70% by 2001’ (African National Congress 2003). Yet disconnections of electricity (and water) were extreme problems for poor people, and the connection statistics above simply ignored the fact that millions of people were cut off for more than 45
 days.   The reason for the disconnection epidemic was obvious. Notwithstanding deeper poverty, the South African government raised household electricity and water prices dramatically from the mid-1990s. By 2002, they accounted for 30% of the income of those households earning less than $60 per month. One cause of higher municipal utility prices was dramatic declines in central-local state subsidies designed to cover operating/maintenance expenses during the 1990s (85% in real terms, according to the Finance and Fiscal Commission). As a result, a conservatively estimated ten million people were victims of electricity disconnections. Pretoria’s national record of municipal ‘credit control’ statistics showed that 60% of the disconnections were not resolved within six weeks (Bond 2000, 2002). That, in turn, confirmed that the blame lay with genuine poverty, not the oft-alleged ‘culture of non-payment’ as a hangover of anti-apartheid activism. Likewise,
 of 13 million given access to a fixed telephone line for the first time, ten million were disconnected due to unaffordability. Naturally, the bulk of suffering caused by the rescinding of vital state services was felt most by women, the elderly and children.   Ultimately these problems are the outcome of neoliberal capitalism, but by and large, the state’s post-apartheid urban policies amplified rather than counteracted the underlying dynamics of accumulation and class division. These included the Housing White Paper (1994), the Water and Sanitation White Paper (1994), the Urban Development Strategy (1995), the Municipal Infrastructure Investment Framework (1997 and 2001), the Local Government White Paper (1998), and the Energy White Paper (1998). The Urban Development Strategy articulated the familiar mainstream relationship between globalization and cities: ‘Seen through the prism of the global economy, our urban areas are single economic units that either rise, or stagnate and fall together... South Africa’s cities are more than ever strategic sites in a transnationalized production system’ (Ministry of Reconstruction and Development 1995:17,41). An ‘Urban Regeneration Strategy’ was proposed
 by president Thabo Mbeki’s office in 2000-01, but in spite of initial hype, it took the form only of a description of discrete investment projects in several underdeveloped nodes. A ‘Free Basic Services’ monthly package of 6000 liters of water and 50 kWh of electricity per household was offered to many households from 2001, but it proved far too little, and if anything, disconnections actually increased. Changes to the housing policy were made in 2001 and 2004, providing a higher grant to subsidy recipients with proven savings or sweat equity, to invest in higher-quality structures. Rental policies also changed slightly. Overall, though, the neoliberal orientation changed only marginally.   South African state policy makers thus accepted the premise that cities must be competitive units in the world economy first and foremost, and that everything from design of the urban form to pricing of municipal services must be based upon market principles. Subsidies should be minimized so as not to distort market relationships. The neoliberal philosophy of decentralization – namely, allowing ‘subsidiarity’ of service delivery so that more state activities could be transferred to lower tiers - was reduced in practice to ‘unfunded mandates’: more responsibilities with fewer resources. Electricity, so long denied to the masses of black South Africans, explicitly reflects the trends to inequality associated with urban neoliberalism. 2. ‘Cost-reflective’ electricity and Soweto disconnections South Africa’s largest parastatal firm is the Electricity Supply Commission, still known by its Afrikaans acronym, Eskom. Ben Fine and Zav Rustomjee fix Eskom at the heart of the economy’s Minerals-Energy Complex, a ‘system of accumulation’ encompassing mining, petro-chemicals, metals and related activities which historically accounted for around a quarter of GDP, and typically consumed 40% of all electricity (Fine and Rustomjee 1996). By the mid-1980s, even the isolated apartheid regime was not immune from international neoliberal trends in the electricity sector. The 1986 White Paper on Energy Policy called for the ‘highest measure of freedom for the operation of market forces’, the involvement of the private sector, a shift to a market-oriented system with a minimum of state control and involvement, and deregulation of pricing, marketing and production (Charles Anderson Associates 1994:12-13). In 1987 the government released a White Paper
 on Privatization and Deregulation, declaring the objective of ‘a systematic transfer of appropriate functions, activities or property from the public sector where services, production and consumption can be regulated more efficiently by the market’ (Republic of South Africa 1987:8-9).   At the same time, however, electricity provision became increasingly politicized, in part because of township payment boycotts. The sorts of surreal energy problems South Africa faces in the twenty-first century reflect the kinds of predictable contradictions accompanying a transition from apartheid economic history to a contemporary electricity pricing system all too often based on neoliberal market-policy for households, but massive subsidies for big corporations, in one of the world’s most unequal societies. Asked why cross-subsidization of electricity prices to benefit the poor was not being seriously considered, the leading infrastructure-services official in the then-Department of Constitutional Development explained in 1996, ‘If we increase the price of electricity to users like Alusaf [a major aluminium exporter], their products will become uncompetitive and that will affect our balance of payments’ (Mail and Guardian, 22 November 1996).
 (Alusaf pays approximately one tenth the price that retail consumers do, and the ecological price of cheap power - both at the site of production and in the coal-gathering and burning process - is not factored in, which in turn contributes to South Africa’s extreme culpability for global-warming and damage done to the citizenry and economy through local pollution.) Rising electricity prices across South African townships had a negative impact during the late 1990s, evident in declining use of electricity despite an increase in the number of connections. According to Statistics South Africa (2001b:78-90), households using electricity for lighting increased from 63.5% in 1995 to 69.8% in 1999. However, households using electricity for cooking declined from 55.4% to 53.0%, and households using electricity for heating dropped from 53.8% in 1995 to just 48.0% in 1999. The state agency conceded a significant link between decreasing usage and the increasing price of electricity. Most poor South Africans still rely for a large part of their lighting, cooking and heating energy needs upon paraffin (with its burn-related health risks), coal (with high levels of domestic household and township-wide air pollution) and wood (with dire consequences for deforestation). Women, traditionally responsible for managing the home, are
 more affected by the high cost of electricity, and spend greater time and resources searching for alternative energy. Ecologically-sensitive energy sources, such as solar, wind and tidal, have barely begun to be explored, notwithstanding the enormous damage done by South Africa’s world-leading addiction to fossil-fuel consumption (Bond and Dada 2005).   Meanwhile, corporate South Africa suffered the opposite problem - an embarrassment of energy riches - especially when terribly poor planning at Eskom during the 1980s resulted in massive overcapacity. Defenders of the big corporates argued, correctly, that they helped mop up the excess capacity and could do so at off-peak hours, and also that low-volume consumers, especially in townships, generate much larger administrative costs per unit. As a result, Eskom and municipalities minimized cross-subsidies that would charge big users more per unit (generating a surplus) than those consuming a bare minimum (who are supplied at a loss). The 1994 Reconstruction and Development Programme (RDP) mandated higher subsidies, but far stronger continuities from apartheid to post-apartheid emerged thanks to neoliberal pricing principles and the consequent policy of mass disconnections, preventing the widespread redistribution required to make Eskom’s mass
 electrification feasible.   Of course, it was the very lack of electrified households during the early 1990s that accounted for Eskom’s success in providing new connections. By the end of 2001, Eskom and the municipalities together had made nearly four million household connections, including farmworkers, at a cost to Eskom of $1.2 billion. The percentage of households with access to electricity infrastructure increased to 70% at the end of 2000. In urban areas, the percentage of households with electricity infrastructure was 84%, with rural areas lagging behind at 50% (National Electricity Regulator 2001:14).   To be sure, Eskom continued to be a target of criticism, especially from environmentalists who complain that coal-burning plants lack sufficient sulphur scrubbing equipment and that alternative renewable energy investments, especially in solar and wind power, have been negligible. Moreover, labor opposition mounted. Having fired more than 40,000 of its 85,000 employees during the early 1990s, thanks to mechanization and overcapacity, the utility tried to outsource and corporatize several key operations, resulting in periodic national anti-privatization strikes by the trade union federation.   Regulation of Eskom and the municipal distributors was not successful, from the standpoint of mass electricity needs. This is partly because government policy has increasingly imposed ‘cost-reflective tariffs’, as a 1995 document insisted. In yet another indication of neoliberalism trumping environmental sustainability, the 1995 energy policy argued that ‘Fuelwood is likely to remain the primary source of energy in the rural areas’. As if on cue, Eskom began to wind down its rural electrification programme, and announced it did not even anticipate electrifying the nation’s far-flung schools, because ‘It is not clear that having electricity in all schools is a first priority’ (Republic of South Africa Department of Minerals and Energy 1995:95,66). Notwithstanding Eskom’s commercialization fetish, its economists had badly miscalculated rural affordability during the late 1990s, so revenues were far lower than were considered financially
 sustainable. By estimating that customers would use 300 kWh per month, Eskom believed it could turn a profit. Yet high prices, drove down consumption, even by those with five years of access, to less than 10 kWh per month, resulting in enormous losses for Eskom. Paying as much as $0.06 per hour (compared to a corporate average of $0.01 and bigger discounts for Alusaf), rural women use up their prepaid meter cards within a week and can’t afford to buy another until the next pension payout. Without a viable market, Eskom slowed new rural electrification connections to a standstill.       The 1998 White Paper was an improvement on previous versions, allowing for ‘moderately subsidized tariffs’ for poor domestic consumers. But it too made the counterproductive argument that ‘Cross-subsidies should have minimal impact on the price of electricity to consumers in the productive sectors of the economy’ (Republic of South Africa Department of Minerals and Energy 1998). Worse, the Department of Provincial and Local Government’s Municipal Infrastructure Investment Framework supported only the installation of 5-8 amp connections for households with less than $120 per month income, which does not offer enough power to turn on a hotplate or a single-element heater. As a result, health and environmental benefits that would otherwise flow from clean electricity go up in smoke. Thanks to social movement advocacy, this level was at least better than the old Independent Development Trust site-and-service subsidies from 1991-94 and the
 original infrastructure investment policy, drafted largely by the World Bank in 1994-95, both of which offered low-income households no electricity hook-up. In 2001, domestic consumers paid an average price to Eskom of 24.59 cents per kWh (Sowetans paid much higher average prices), while the manufacturing sector paid 12.83 cents per kWh and the mining sector paid 12.32 cents per kWh. Two years earlier, in 1999, Soweto residents had experienced three increases in a short period as Eskom brought tariffs in line with other areas. From 18.77 cents per kWh, the price of electricity rose by 47% to 27.6 cents per unit in less than twelve months (Star, 15 July 1999). Such changes in tariffs reflected the move towards ‘cost reflectivity’ and away from regulated price increases, in order to reduce and eventually eliminate subsidies, so as to achieve ‘market-related returns sufficient to attract new investors into the industry’ (Eskom 2001a:56). Eskom acknowledged that ‘individual customers could experience significant changes in their price of electricity’. In particular, those who previously had
 subsidized tariffs suffered increases ‘well above the average’ (Eskom 2001b:4,7). The result of the shift to cost reflective pricing will be ‘significant price increases (around 50%) for domestic (conventional credit) customers’, according to a confidential PriceWaterhouseCoopers report, ‘Tariffs, Levies and Financial Transition Strategies’. In some areas, prices for domestic users are expected to rise by over 100% by 2010, before inflation. Prices for most of the Eastern Cape and Free State, and parts of the Northern Cape – South Africa’s poorest areas - are expected to rise higher than anywhere else, due to distance from electricity generation plants. The National Electricity Regulator gave explicit support to above-inflation tariff increases in order to fund investment in new capacity, much of which is anticipated to be privately supplied, with a standard 20-30% profit premium added (Eskom 2001a:36). Because of the residual bias towards supplying large consumers, the post-apartheid government and Eskom simply neglected the implications of an eco-social benefit analysis for low-income people, focusing instead on holding down costs. In contrast, providing cheaper supplies in the form of a free lifeline subsidy, as mandated in the Reconstruction and Development Programme, was not on the politicians’ agenda, even when protests broke out in townships from Cape Town to Durban to Johannesburg. The main reason was that such subsidies disincentivize the drive to corporatize and privatize electricity. The most important deterrent to Eskom’s privatization was, by all accounts, the large ($320 million) and growing debt owed by township residents. The most durable problem for any privatizer - whether generator, transmitter or distributor - is pressure to redistribute cheap national-scale supplies of power to municipalities, or eventually regional
 distributors, so as to provide a free lifeline supply to ordinary South Africans. Even in low-income communities with access to electricity, the cost of power for cooking is so high that, for example, only a small proportion of Sowetans with electric power use it, favouring cheaper fuels (Beall, Crankshaw and Parnell 2002:Chapter Nine; White, Crankshaw, Mafokoane and Meintjes 1998). The gender, health and environmental implications are obvious. When arrears began to mount, Eskom’s first strategy was disconnection and repression. Eskom decided in early 2001 to disconnect those households whose arrears were in excess of $800, with payment more than 120 days overdue. An anticipated 131,000 households in Soweto were to be cut off due to non-payment, according to Eskom (2001c) - even though the company had only 126,000 recorded consumers in the township. In addition, Johannesburg Metro authorities decided, in an act of solidarity, to cut off water and then begin eviction proceeds through sheriff sales, in an attempt to pressure people to pay Eskom arrears (Saturday Star, 10 March 2001; Star, 17 May 2001). All manner of gimmicks were attempted to encourage higher payment levels, including lottery tickets as gifts for bill payment, but Sowetans’ arrears still rose to an estimated $120 million by 2001.   At stake was not merely Eskom’s attempt to collect the arrears across South Africa, with Soweto representing the major challenge. Even more important was the general principle of municipal credit control, by which disconnecting electricity consumers made it is easier to collect arrears on rates, water services and other charges. The ‘Project Viability’ monitoring system of the Department of Provincial and Local Government (DPLG) reported that a total of approximately $2 billion was owed to municipalities - not including arrears on Eskom’s retail bills - at the end of 2001. Electricity debts accounted for 15% of this total, after rates (32%) and water (19%). Total arrears owing to municipalities therefore stood at more than a quarter of yearly expenditure, with electricity arrears equal to 4% of total municipal spending.   By 2001 disconnections were widespread, with Project Viability reports and Eskom press statements together indicating a rate of around 120,000 households per month. The rate was probably far higher since not all municipalities responded to the DPLG survey, and the Eskom statements focused on Soweto, where resistance was toughest. But even using this base, and making a conservative estimate of six people affected by every disconnection (since connections are made to households, sometimes with a backyard dwelling), more than 720,000 people each month were denied access to electricity because of non-payment in 2001. The overall connection target set by government of 350,000 connections a year translates to an average rate of 29,167 new connections a month. Even if we only recognise the number of disconnections after the number of reconnections are subtracted, it still means that in 2001, there were several times as many households losing access to
 electricity every month as were gaining access. A survey of Soweto residents found that 61% of households had experienced electricity disconnections, of whom 45% had been cut off for more than one month. A random, stratified national survey conducted by the Municipal Services Project and Human Sciences Research Council (HSRC) found that 10 million people across South Africa had experienced electricity cutoffs (McDonald 2002).   More detail on retail electricity finance was provided in two of the SECC’s core communities, Orlando East and Pimville, during a 2001 survey: •    Sowetans made regular payments on their electricity accounts, with two-thirds paying $30 or less per month and one quarter paying less than $15 (the average bill was $25, equal to electricity consumption of approximately 500 kWh/month). •    Households provided evidence of inconsistent billing often due to non-reading of meters. Nearly one in 10 reported that bills always come to the same amount, while two in five recorded that meters were only read occasionally. A further quarter of respondents said that Eskom never read their meters. •    Aside from disputed accounts, the main problems paying bills were long queues on pay-day, the lack of assistance in explaining bills, cutoffs, and poor service from Eskom staff. •    It was often reported that Eskom staff have a negative attitude towards consumer problems. Consumers know that they must take their complaints to Eskom, but feel intimidated and therefore have many unresolved problems. •    Half of the households keep their electricity bills for more than 4 years, confirming that the rising prices, huge arrears and erratic billing were the source of long-standing grievances. Because bills were higher than were affordable, arrears inexorably built up on the Soweto accounts: •    In winter, households that pay up to $30 per month are actually paying just half of what was billed. •    Arrears naturally increased in winter, when households are more vulnerable to electricity cutoffs. •    Many people explained that although they could not afford their entire bills, they pay part of them as assurance to Eskom that they are willing to pay to avert a cutoff of their electricity. •    Nearly a fifth of the respondents were in arrears that date more than 4 years, and for 14% the arrears were in excess of $2500. Finally, arrears led to disconnections: •    Three out of five households experienced cutoffs over the course of the previous year, of which 86% were due to non-payment. Only 14% of the cutoffs were disputed, despite the widespread complaints of inconsistent billing. •    Of households experiencing cutoffs, 10% had their cables removed permanently. This is a response usually taken by Eskom when the consumer has reconnected illegally, and the price of reconnection is usually prohibitive. Disconnections, in turn, lead to all manner of health, environmental, social and economic problems: •    When electricity is cut off, consumers record numerous difficulties: the food gets spoiled (98%); we cannot cook the food properly (90%); our personal hygiene is negatively affected (88%); we spend more money on alternative fuels (84%); the kids cannot study properly (81%); it increases crime in the area (73%); it is degrading to my family to live without electricity (70%); the women have more work (65%); it is bad for our working life (62%); it disrupts home business (41%); it increases domestic violence in the neighbourhood (36%). All of these interlocking problems are felt more severely by women. •    For those disconnected, the length of time that the household was without electricity - i.e., either until a payment was made or supply was illegally reconnected - varied: up to one day, 9%; a couple of days, 12%; 1 week (14%); 1-2 weeks (10%); 3-4 weeks (11%); and more than a month (45%). The impact of disconnections can be fatal. One indication of the health implications of electricity denial and of supply cuts is the recent upsurge in TB rates, as respiratory illnesses are carried by particulates associated with smoke from wood, coal and paraffin). Because of climate and congestion, respiratory diseases are particularly common in Soweto. In a 1998 survey, two in five Sowetans reportedly suffered from respiratory problems, 2% from TB, 4% from allergies, 0.5% from cancer and 10% from other infections. More than a fifth of council-house dwellers described their health as bad. Lost working days resulted: 5% took 1-2 days off each year to recover; 9% took 3-5 days; 6% took 6-7 days; and 15% needed more than 8 days (Morris et al, 1999: 34-35,41).   Survey respondents reported many fires in the neighbourhood, often caused by paraffin stoves, many of which were harmful to children. Eskom’s disconnection procedures often resulted in electricity cables lying loose in the streets.  Residents were unhappy not only about the high reconnection fees charged but the fact that Eskom uses outsourced companies that earn $10 per household disconnection. No notification was given that supply would be cut off, and residents were not given time to rectify payments problems. Eskom can disconnect entire blocks at a time by removing circuit breakers, penalizing those who do pay their bills along with those who don’t. All these grievances proved the raw material from which the SECC and its Operation Khanyisa emerged. 3) Soweto’s Operation Khanyisa The SECC is a community group or ‘civic’, founded in May 2000 to represent community interests with respect to electricity cut-offs, rising prices of electricity, billing accuracy and other electricity supply related issues (Dixon 2001, Haffajee 2001, Nelson 2002, Ngwane 2003, Kingsnorth 2003, Forrest 2003, Ngwane and Turner 2004, Egan and Wafer 2004). It stands opposed to neoliberal policies, and maintains a strong socialist ideological perspective (Alexander 2003). SECC grew rapidly with considerable local and some international press focus on the organization and its best-known leader, Trevor Ngwane, who was formerly a Johannesburg ANC councillor representing Soweto until the ruling party expelled him in 1999 for opposing the city’s privatization strategy (Kgosana 2002). Although Soweto marches and rallies generally attract less than 1,000 people, the group’s local, national and global popularity is impressive (Ceruti 2002, Democratic
 Socialist Movement 2002). Internal support has tended to wax and wane, often in response to government concessions to the SECC’s core constituency (Molebeledi 2002). A 2005 split in the SECC constituency emerged over political analysis, strategies and tactics (leading to the formation of a rival left group), and a key SECC organiser (Bongani Lubisi) passed away in late 2005.   The SECC’s prototypical member is an older unemployed woman.  Geographically, members are most likely to come from a range of established areas in Soweto including Meadowlands, Diepkloof, Pimville, Naledi, Dube and Orlando East. At the SECC’s Annual General Meeting in early March 2003, 77 of 110 participants responded to a questionnaire distributed by Peter Alexander of the University of Johannesburg, designed to understand members’ background and motivations. 1 in 4 respondents were over the age of 60, more than two-thirds were over 40, and just over 50% were women. Significantly some 88% were unemployed. Alexander found that no respondents were members of the ANC or SA Communist Party, and there were only a few members of other political parties. SECC members were hostile to the South African National Civics Organization, an ANC ally. While membership of political parties may have been low, 70% of respondents declared that they belonged to a
 church.   A full understanding of the SECC would not be possible without a brief discussion of three other organizations: the Anti-Privatization Forum (APF), the Alternative Information Development Center (AIDC) and the Municipal Services Project. The APF is an umbrella network drawing together Johannesburg-area civics and political groups.  It was formed by a combination of social forces opposed to ‘Igoli 2002’, a municipal plan introduced in 1999 to corporatize and privatize municipal assets. Initially the APF included unions, such as the South African Municipal Workers Union and the National Education Health and Allied Workers Union, the SA Communist Party’s inner-city branch, and students from the University of Witwatersrand protesting fee increases and campus restructuring. After the initial failure of two overlapping campaigns - against Johannesburg Igoli 2002 and the University of the Witwatersrand’s simultaneous neoliberal restructuring - and
 the formal withdrawal of the unions and communists from participation as anti-government rhetoric intensified, the APF turned its attention to the issue of basic services provision in the townships, ranging from electricity to water to education to food. By the mid-2000s, the APF claimed as members 21 community-based affiliates and four political organizations.   The Alternative Information Development Center (AIDC) provided technical assistance with the APF’s foundation, and support from 2000-02. The AIDC is a ‘political’ NGO, which through an ‘integrated strategy of research…popular education, campaigning and coalition building’ offers ‘challenges to the currently dominant global economic system’. It is committed to the ‘empowerment and mobilization of progressive and popular organizations and social movements to contribute to the development of alternatives that ensure fundamental socioeconomic transformation’ (AIDC website Although the Johannesburg office of AIDC was closed in mid-2002 in the wake of pressure against its key personnel by churches and unions, the AIDC had facilitated the emergence of the SECC and similar groups in Johannesburg and Limpopo Province through technical and financial support. In addition, the Municipal Services Project (MSP) based at
 the University of the Witwatersrand and Queens University (Canada) served the SECC as a research, policy and educational initiative ( The MSP assisted the SECC in designing and analyzing a seminal survey of Soweto electricity use, conducted by Danish researcher Maj Fiil-Flynn and several dozen SECC members in 2001 (Fiil-Flynn et al 2001). With NGO facilitation and academic legitimation, the media became interested, leading to extensive reports by SABC (South African Broadcasting Corporation)Special Assignment, CNN news, The Washington Post, Newsday, New Internationalist, Red Pepper, Fifth Estate and many other print and broadcast media.   The SECC was sufficiently strong that when the disconnections by Eskom increased to 20,000 monthly in 2001, more than 3,000 Soweto households quickly had their electricity supplies illegally restored through ‘Operation Khanyisa’ (‘Reconnect the Power!’). SECC volunteers risked electrocution to do the work, and charged their neighbours nothing for the service. They occasionally had run-ins with Eskom officials and the police, and in 2001 two Vaal township residents were shot dead attempting to prevent disconnections (Ngwane 2001). In spite of demonization by the state, Operation Khanyisa was considered an overwhelming popular success. By October 2001, Eskom became sufficiently intimidated that it gave in, announcing it would no longer disconnect those Sowetans who couldn’t pay. The SECC announced ‘a temporary victory over Eskom, but our other demands remain outstanding’: •    commitment to halting and reversing privatization and commercialization; •    the scrapping of arrears; •    the implementation of free electricity promised to us in municipal elections a year ago; •    ending the skewed rates which do not sufficiently subsidize low-income black people; •    additional special provisions for vulnerable groups - disabled people, pensioners, people who are HIV-positive; and •    expansion of electrification to all, especially impoverished people in urban slums and rural villages, the vast majority of whom do not have the power that we in Soweto celebrate (SECC 2001). By late 2001, public enterprises minister Jeff Radebe offered a deal to the Soweto residents, requesting that they end their Eskom payment boycott, repay half their arrears and start making regular full payments (Republic of South Africa Department of Public Enterprises 2001). Despite his own recognition that accounts were inaccurate and that corrupt contractors were cutting electricity off and forcing people to pay high reconnection fees, Radebe offered residents only a one-month ‘amnesty’ to apply for reconnection to Eskom, threatening that any resident who had not done so after one month would be prosecuted. He also announced that 100% of pensioners’ arrears and 50% of arrears of other residents would be set aside in a trust account, which would be cancelled if payment rates improved. Regardless of the accuracy of the arrears, residents would have to repay 50% of arrears in their name.  In early 2001, Radebe along with Sanco, the Human Rights
 Commission, Eskom, the Johannesburg Metro and Johannesburg’s corporatized City Power launched ‘Operation Lungise’ (Light Up) to persuade Sowetans that, as full-page advertisements put it, ‘All you need to do is pay your current account. Every month. On time. And with those payments, we’re able to keep improving service delivery’. Although quite a few Sowetans signed up for Radebe’s deal, within a few months payments levels were back to pre-deal levels (Business Day, 12 April 2002).   The SECC intensified its struggles, culminating with the arrest of 87 SECC and APF activists on charges of public violence and malicious damage to property at a protest outside Johannesburg Mayor Amos Masondo’s house on 6 April 2002 (Sunday Times, 7 April 2002). The plight of the Kensington 87 (named after the suburb they were arrested in) became a considerable focus of activism for the SECC and the APF. Marches and protests were held outside the Johannesburg’s Jeppe Magistrate’s Court leading up to their release and over the following twelve months at the various court hearings. The activists aimed to present the Mayor – who was in Hawaii at the time - with a memorandum of grievances at his home, but in the course of a vigorous ‘toyi-toyi’ (political dance) and an attempt to disconnect the Mayor’s water supply, a bodyguard fired 8 shots into the crowd, injuring two. The bodyguard was arrested and charged with attempted murder and
 released on bail on the Monday, 8 April. More than three dozen of the protestors where either pensioners or children and were also released on 8 April. The agonizingly slow bail application left 50 of the protestors in jail for 11 days, however, contrasting with the lenient treatment and bail given the guard. The SECC and APF argued that the Kensington 87’s treatment was evidence that the ANC was tightening civil and political rights as a way of stifling dissent against the government’s neoliberal municipal services policies (Harvey 2002). After a number of delays, and almost a year after the event, the case against the 87 was dismissed by the magistrate due to a lack of reliable evidence (APF 2003).   The events surrounding the mass imprisonment did raise important and difficult tactical questions for the SECC. While the SECC’s profile was significantly raised, the mainstream print and broadcast media generally characterized the events outside Masondo’s home negatively, despite a few factual reports (Cox 2002, Pikwana 2002). This negative spin potentially undermined broader community support for the SECC. The imprisonment and the associated legal costs caused much hardship to the protestors and their families. A vigorous solidarity campaign provided both material and emotional assistance to those in jail, but the strain, both personal and organizational, was high.   Nonetheless the SECC’s activism on other stages continued unabated. The World Summit on Sustainable Development (WSSD) in August 2002 also helped raise the SECC’s profile. A memorable Mail & Guardian front page (16 August 2002) framed elderly SECC stalwart Florence Nkwashu in front of riot police with the headline ‘We’ll take Sandton!’ The SECC was central to the memorable 25,0000 strong march from Alexandra to Sandton, the largest post-1994 mobilization in South Africa aside from trade union mobilizations. The ‘Big March’ was roughly ten times larger than one held supporting the WSSD by the ANC, trade unions and churches, held along the same route later that day. The SECC’s involvement even merited a disparaging mention in The Economist (2002:59).   In early 2003, the SECC gained grants from international agencies such as War on Want, and employed an administrator and an organiser with an annual budget of $50,000. The SECC subsequently broadened its campaigning focus from electricity to also resisting the installation of pre-paid water metres (Harvey 2005). Disconnections combined with pre-paid electricity and water meters made a nonsense of the ANC’s 2000 municipal election promise: ‘ANC-led local government will provide all residents with a free basic amount of water, electricity and other municipal services, so as to help the poor. Those who use more than the basic amounts will pay for the extra they use’ (African National Congress 2000). Until 2005, Eskom bureaucrats ignored the promise, and finally – along with most municipalities - decided that a lifeline of just 50 kWh (or less) per household per month would suffice. Such a meagre amount merely supplied light and perhaps radio/TV
 power, to a typical household, but did not provide enough electricity to meet the basic needs of heating, cooking and a hot water-heater. Ngwane is also critical of the ANC’s choice of the household as a unit of measurement, arguing that free lifeline supplies of electricity should be allocated on a ‘per person’ basis so as to avoid bias against large families. The main SECC proposal, according to Ngwane (interview, 19 August 2001), was for ‘at least one kiloWatt hour per person per day [of free electricity]. For a family of 10 that would translate to 300 kWh per month, or $15 at the current high price of $0.04 per kiloWatt hour. That is a fair subsidy - less than $1.50 per person per month - and we think a rich company like Eskom has the means to pay it.’   The SECC’s 2005 organisational crisis stemmed from disputes over Ngwane’s leadership style and the way socialist ideology emerged, ultimately becoming the official constitutional objective of the SECC. Another dispute within and around the SECC and APF was whether and how to contest the March 1 2006 municipal election. Across Gauteng, an ‘Operation Khanyisa’ political party emerged from those APF affiliates which saw in the conversion of civil society to electoral politics, the opportunity to advance and test a socialist program with a mass constituency. The hope was not to defeat the still mighty ANC in any particular ward (Ngwane won only 30% in his Pimville, Soweto constituency in 2000), but to at least win ward-based proportional representation seats in the Johannesburg city council, from which to launch and sustain yet more intense struggles against the city’s neoliberal rulers. Conclusion The debate over the commodification of electricity appeared set to continue and even intensify during the last half of the 2000s, as Eskom’s restructuring plan continued to fail its low-income customers and the society and environment more generally. What we learn from the Soweto case confirms the ‘double movement’ of Karl Polanyi (1957:76), in which ‘the extension of the market organisation in respect to genuine commodities was accompanied by its restriction’, as society resisted excessive commodification.   While the SECC was one of the most advanced movements along these lines, it was not the only one. Other South Africans fighting for ‘decommodification’ in recent years established interlocking, overlapping campaigns to turn basic needs into genuine human rights, including demands – sometimes partially met – for free anti-retroviral medicines to fight AIDS; at least 50 litres of free water for each individual every day; extensive land reform; prohibitions on service disconnections and evictions; free education; nationalised and free basic telephony; and even a monthly ‘Basic Income Grant’. Social movements, women’s groups, churches, NGOs and trade unions are all basically committed to this agenda, even if there are temporary divisions over political-party alignments which prevent, in the foreseeable future, a South African Social Forum from arising with all the necessary forces. The main trade union movement, the Treatment Action Campaign
 and most church activists have strong loyalties to the ruling party. In contrast, the urban and rural social movements, Jubilee South Africa, solidarity groups working on Palestine and Burma, and the Environmental Justice Networking Forum are all vigorous critics of the South African government. They formed a national alliance known as the ‘Social Movements Indaba’ – whose first action was the anti-WSSD protest in 2002 - as a prototype for a national Social Forum, but of a more explicitly left style than the standard World Social Forum affiliate.   These campaigns seem to throw up the possibility of ‘universal’ programmatic work, perhaps via a national World Social Forum process at some stage, or via a human-rights agenda being extended to socio-economic rights (as in South Africa’s 1996 Constitution, still largely unimplemented). The APF is taking the water minister to the courts for alleged violation of rights to water, concerning the use of pre-paid water meters. While there are all manner of problems with ‘rights discourses,’ they do parallel the kinds of reactions to rampant market penetration now underway across the world, since civil society organisations are expected to stand in when neoliberal policies shrink the state. But here arises another dilemma for the Social Forum strategists: under conditions of never-ending structural adjustment, most Africans who lobby for democracy and basic socio-economic services from their state regimes are and will continue to be frustrated.
 Even South Africans have had regular problems with maintaining their first-generation civil and political rights, much less second-generation socio-economic rights. In such an environment, progress will be forged not from good ideas and polite advocacy, technicist interventions and insider persuasion tactics, but in mass-movement campaigns emanating from well-organised, democractic communities and shopfloors able to withstand repression by the nationalist ruling party. Here, no matter its subsequent problems, the experience of the SECC during the early 2000s was exemplary in the broader battle to roll back neoliberalism and ultimately win the hearts and minds of society to socialism. REFERENCES African National Congress (2000), ‘ANC Municipal Election Manifesto’, Johannesburg. _____________________ (2003), ‘ANC Today’, 7 November, Alexander, P. 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