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

Overview of Multi-Year Price Determination
2013/14–2017/18 (MYPD 3)
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calculate and show all tariff cross-subsidies transparently; to make use-of-system charges
cost reflective for all large power customers and, where applicable, show low-voltage
subsidies transparently and unbundle the reliability service charge for the large power tariffs
from the energy rates.
6.2.4 Revision of time-of-use structures
TOU tariffs were introduced during the early 1990s to reflect the increased production cost of
electricity generation during daily peak hours and the high demand of the winter season. As
a result customers on TOU tariffs currently pay more for electricity during winter and at
different times of day. This is reflected in the generation portion of their tariff, which, at the
current summer-off-peak-to-winter-peak ratio of 1:9, has fallen out of line with the actual cost
signal.
The rapid increase in the price of electricity in recent years has resulted in the peak winter
price increasing significantly and becoming potentially out of line with the actual cost signal
in the long run. A recent survey suggests customers would like a revision of the current TOU
definitions.
Time-of-use periods
Time-of-use tariffs have different rates for the same components during different times of
day and for different seasons. This more accurately reflects the shape of Eskom‟s long-run
cost of energy supply. The charges for TOU tariffs differ from high-demand (June to August)
to low-demand (September to May) seasons. These charges also differ by the time of day,
with peak, standard and off-peak rates applying for different times of day.
Figure 19: Nightsave Urban Large, Nightsave TOU tariffs