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 />
Figure 20: Megaflex, Miniflex and Ruraflex Urban Small and Nightsave Rural TOU tariffs<br />
Page 133 of 144<br />
To ensure system stability while there are major constraints on the grid and a low reserve<br />
margin, it would be prudent for the sake of system stability, to postpone any significant<br />
amendments to the TOU tariffs until the <strong>Eskom</strong> reserve margin increases - at least until<br />
Medupi and Kusile are commissioned.<br />
<strong>Eskom</strong> therefore proposes only a small change to reduce the peak winter energy price so<br />
that the ratio of the summer off-peak to winter peak is 1:8. This change needs to be<br />
balanced against higher increases to summer peak and standard periods.<br />
6.2.5 Timing of tariff increases<br />
In line with <strong>Eskom</strong>‟s financial year (1 April to 31 March), all customer tariffs should increase<br />
on 1 April. However, in terms of the Municipal Finance Management Act (MFMA), <strong>Eskom</strong> is<br />
only allowed to increase municipal tariffs on 1 July of any year. Currently, <strong>Eskom</strong> has to<br />
recover a year‟s worth of revenue from municipalities at the previous year‟s rates in the first<br />
three months, while the remainder of the revenue for its financial year is recovered at the<br />
new rates in the last nine months.<br />
As a result the tariff increase that municipalities receive is different to that received by<br />
<strong>Eskom</strong>‟s direct customers. This apparent inconsistency has caused confusion due to the<br />
average increase that Nersa announces not being the one that is applied to municipalities.<br />
Because changing the municipality increase date would require amending the MFMA,<br />
<strong>Eskom</strong> considered moving the increase for its non-municipal customers to 1 July to align<br />
with its municipal customers‟ increase date. This means that non-municipal customers would<br />
continue to pay the current rates and would not see any increase for the first three months of<br />
the first year of MYPD 3 (2013/14) and would receive their annual tariff increase on 1 July