Part 1 Revenue Application: Multi-Year Price Determination ... - Eskom
Part 1 Revenue Application: Multi-Year Price Determination ... - Eskom
Part 1 Revenue Application: Multi-Year Price Determination ... - Eskom
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Overview of <strong>Multi</strong>-<strong>Year</strong> <strong>Price</strong> <strong>Determination</strong><br />
2013/14–2017/18 (MYPD 3)<br />
6 PROPOSAL TO RESTRUCTURE ESKOM’S<br />
RETAIL TARIFFS<br />
Key points<br />
Page 122 of 144<br />
<strong>Eskom</strong>‟s revenue requirement results in a single average price increase that is<br />
translated into specific tariff increases for each tariff and the summarised impact on<br />
the different tariffs is provided.<br />
Residential tariffs should be restructured to simplify the tariffs while still optimising the<br />
protection of the poor, and ensuring that high-usage residential customers pay more<br />
cost-reflective prices.<br />
Each tariff charge is recalculated based on an updated cost-to-serve study and<br />
increases will be applied to the various components to ensure that the tariff<br />
structures represent costs more accurately. The various components of retail tariffs<br />
are also further unbundled to show cross-subsidisation and other cost structures<br />
clearly and transparently.<br />
Other proposed changes will revise time-of-use structures, include the environmental<br />
levy charge into the energy charges, spread the reactive energy charge across all<br />
time periods, revise the use of system charges for loads and introduce use of system<br />
charges for generators.<br />
<strong>Eskom</strong>‟s revenue requirement results in a single average price increase that is translated<br />
into specific increases for each tariff. The effect of the tariff restructuring proposals is<br />
summarised below. In addition to the revenue request, <strong>Eskom</strong> requests that Nersa considers<br />
modifications to the existing tariff structure as summarised below. Further detail in this<br />
regard is set out in <strong>Part</strong> 2: Proposal to Restructure Tariffs.<br />
The tariffs that will be approved by Nersa will only be applicable to direct <strong>Eskom</strong> customers<br />
and municipalities purchasing electricity from <strong>Eskom</strong> and not to customers of municipalities.<br />
Once the <strong>Eskom</strong> price increase is known, each municipality will determine their own tariffs<br />
and increases for their customers based on their unique situation.