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

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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.
Overview of Multi-Year Price Determination 2013/14–2017/18 (MYPD 3) 6.1 Impact of MYPD3 price increase Page 123 of 144 The average price increase is not necessarily the same as the increase applied to the tariff rates for the different customer categories for a number of reasons. These include the tariff structure, volume changes (kWh and demand) and how electricity is consumed. The ultimate impact on the customer will depend on what is approved by Nersa on the average increase resulting from the MYPD 3 determination, any decisions on subsidies, the timing of the price increase implementation and the tariff restructuring. Tariff categories Eskom tariffs are set out in four main categories: local authority tariff (municipalities), urban, residential and rural and these are further categorised in local authority tariffs and non-local authority (or non-municipal) tariffs. The tariffs allocated to these categories are set out below. Urban – Eskom‟s urban tariffs supply typically industrial, mining and commercial entities The following tariffs apply to the urban category: Megaflex is a time-of-use (TOU) tariff used for large electricity supplies (>5MVA). Nightsave Urban is an off-peak tariff that is used for small and large supplies (>25kVA). Miniflex is a TOU tariff for smaller industrial, commercial customers (
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EXECUTIVE SUMMARY Introduction Over
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ESKOM PROFILE Overview of Multi-Yea
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Price path: Funding: Other: Overvie
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2 THE MYPD PROCESS Key points Overv
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Electricity Pricing Policy Overview
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Cost of cover Overview of Multi-Yea
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Part 1 Revenue Application: Multi-Year Price Determination ... - Eskom

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