for Eskom's Key Customers in South Africa
for Eskom's Key Customers in South Africa
for Eskom's Key Customers in South Africa
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Foreword<br />
The Eskom retail tariff structures and charges are designed<br />
to recover the National Energy Regulator of <strong>South</strong> <strong>Africa</strong><br />
(NERSA)’s approved Eskom revenue requirement and<br />
to conta<strong>in</strong> cost-reflective signals <strong>for</strong> economic efficiency<br />
and susta<strong>in</strong>ability <strong>in</strong> l<strong>in</strong>e with the Department of Energy’s<br />
Electricity Pric<strong>in</strong>g Policy (EPP). Eskom’s 2009/10 standard<br />
tariffs and charges have been approved by the NERSA and<br />
the rates published <strong>in</strong> the Tariff Book <strong>in</strong>clude the follow<strong>in</strong>g:<br />
Price <strong>in</strong>crease<br />
On 25 June 2009 the NERSA approved an average tariff<br />
<strong>in</strong>crease of 31,3 % <strong>for</strong> Eskom effective 1 July 2009. To protect<br />
the poor, the NERSA determ<strong>in</strong>ation <strong>in</strong>cludes a lower<br />
<strong>in</strong>crease to the Eskom Homelight customers that results <strong>in</strong><br />
the follow<strong>in</strong>g price <strong>in</strong>creases:<br />
• The average price <strong>in</strong>crease <strong>for</strong> tariffs to customers<br />
directly supplied by Eskom, exclud<strong>in</strong>g local authorities<br />
(municipalities) and the Homelight 1 & 2 tariffs<br />
is 33,6 %.<br />
• The average price <strong>in</strong>crease to the local authorities’ tariffs<br />
is 31.3 %.<br />
• Homelight 1 & 2 tariffs will experience a price <strong>in</strong>crease<br />
of only 15 %.<br />
Retail tariffs restructur<strong>in</strong>g plan<br />
NERSA approved the retail tariff restructur<strong>in</strong>g plan on<br />
11 December 2008 <strong>for</strong> implementation <strong>in</strong> 2009/10. Eskom<br />
has aligned the implementation of the structural changes<br />
to co<strong>in</strong>cide with the price <strong>in</strong>crease implementation date of<br />
1 July 2009. The ma<strong>in</strong> features of the structural changes are:<br />
• The transmission and distribution network charges<br />
have been unbundled <strong>for</strong> Megaflex, Nightsave Urban Large<br />
and Nightsave Urban Small tariffs.<br />
• Technical loss factors are used to differentiate energy<br />
costs <strong>in</strong>stead of the voltage surcharges.<br />
• The voltage differentials are <strong>in</strong>creased between the high<br />
and low voltage network charges.<br />
• Energy rates <strong>in</strong>creased and network charges commen-<br />
surately reduced to reflect the higher cost of energy.<br />
It is important to note that the structural changes will have<br />
an impact on the average tariff <strong>in</strong>crease on an <strong>in</strong>dividual<br />
customer basis. Although the impact has been calculated<br />
to have a revenue neutral impact to Eskom, <strong>in</strong>dividual<br />
customers may see a negative or positive impact depend<strong>in</strong>g<br />
on the structural change, their <strong>in</strong>dividual customer<br />
profile, their geographic location and supply voltage.<br />
For more <strong>in</strong><strong>for</strong>mation on the structural changes, please refer<br />
to the web site www.eskom.co.za/tariffs.<br />
Environmental levy<br />
Government <strong>in</strong>troduced an Environmental Levy of 2c/kWh<br />
on electricity produced by non-renewable generators (coal,<br />
nuclear and petroleum) <strong>in</strong> <strong>South</strong> <strong>Africa</strong>. To recover the<br />
Eskom costs <strong>for</strong> the Environmental Levy paid to SARS, the<br />
follow<strong>in</strong>g charges are effective 1 July 2009:<br />
• An Environmental Levy charge of 1.97c/kWh<br />
(exclud<strong>in</strong>g VAT) that is equally applied <strong>for</strong> all electricity<br />
sales to end users.<br />
• Indirect Environmental Levy costs <strong>for</strong> the non-renewable<br />
electricity generation, i.e. the auxiliary consumption<br />
and l<strong>in</strong>e losses’ costs. NERSA regulates the amounts<br />
of auxiliary consumption and l<strong>in</strong>e losses together with<br />
other costs <strong>for</strong> recovery <strong>in</strong> the electricity tariffs. As such,<br />
the <strong>in</strong>direct costs’ recovery is conta<strong>in</strong>ed <strong>in</strong> the NERSA-<br />
approved average price <strong>in</strong>crease on the Eskom tariffs.<br />
• From 1 July 2009, the environmental levy charge will be<br />
reflected as a separate l<strong>in</strong>e item on the customer bill.<br />
Notified Maximum Demand (NMD) rules<br />
The NMD is the maximum demand contracted between Eskom<br />
and a customer <strong>for</strong> a period of 12 months. The NMD rules<br />
set out the payment conditions associated with the NMD<br />
and any exceedance of the NMD. These rules were recently<br />
updated and approved by NERSA <strong>for</strong> implementation on<br />
1 April 2009. From 1 August 2009 the actual charge applicable<br />
<strong>for</strong> NMD exceedances will be raised on the bills.<br />
The approved rules and modell<strong>in</strong>g tool are on the web site<br />
www.eskom.co.za/tariffs.<br />
Deon Conradie – SENIOR MANAGER<br />
(Electricity Pric<strong>in</strong>g)<br />
© Eskom July 2009 3