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 />
Page 36 of 144<br />
to municipality tariffs are taken into account. Any shortfall or over-recovery needs to be<br />
recovered over a nine-month period, resulting in a higher increase.<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. However, on modelling the impact of this move,<br />
it was found that the increase for non-municipality customers would be much higher for the<br />
remaining nine-month period of 2013/14 even though the annual increase would have been<br />
the same. It was felt that it would not be appropriate to propose the change at this time and<br />
the current implementation dates for municipal and non-municipal customers will remain in<br />
place.<br />
1.6.3 Other proposed structural changes to the retail tariffs<br />
Additional proposed changes to tariff structures aim to improve cost reflectivity and enhance<br />
transparency. Specifically, <strong>Eskom</strong> is proposing to:<br />
Recalculate the tariff components based on an updated cost-to-serve study with:<br />
o Rates to be updated to differentiate between actual cost increases per<br />
licensee i.e. for Generation (energy costs), Transmission (network costs) and<br />
Distribution (network and retail costs).<br />
o All cross-subsidies in the current tariffs to be unbundled and shown<br />
transparently.<br />
o Use-of-system charges (network charges) to be cost reflective for all<br />
customers and shown transparently, especially where cross-subsidies are<br />
paid or received.<br />
o The reliability service charge (cost incurred by the system operator to keep<br />
the national grid in balance) for the Megaflex tariff to be unbundled to show<br />
rates excluding energy losses.<br />
Revise time-of-use structures to start addressing the difference between seasonal<br />
rates by changing the time-of-use (TOU) peak to off-peak ratios.<br />
Incorporate the environmental levy costs into the energy charges.<br />
Apply the reactive energy charge for all time periods.<br />
Introduce Distribution and Transmission use-of-system charges for generators.<br />
See the Proposal to restructure tariffs chapter at the end of this document for more detail.