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

Figure 9: Current cross-subsidies in Eskom tariffs
Overview of Multi-Year Price Determination
2013/14–2017/18 (MYPD 3)
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Eskom believes that the IBT as it is currently structured does not sufficiently target low-
income households and places an unsustainable subsidy responsibility on urban customers.
Eskom also believes that social support for South Africa‟s poor and disadvantaged is a
necessity and that a national approach to electricity related social subsidies must be
initiated. To date, tariff subsidies have evolved in the absence of a subsidy framework and
there has been very little analysis of the long-term impact on consumers, whether subsidy
contributors, recipients, or even the economy as a whole.
Eskom recognises that even in the absence of a national subsidy framework the poor still
need to be protected against the impact of the high price increases. The proposals contained
in this tariff restructuring plan, therefore do include recommendations to ensure a single digit
increase to the poor. This option provides protection for the poor, but significantly increases
the level of subsidies for the non-local authority urban tariffs (see Proposal to restructure
tariffs).