Part 1 Revenue Application: Multi-Year Price Determination ... - Eskom

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