BUSINESS NEWS - Eskom has proposed that households pay a far greater portion of their bills in the form of fixed charges related to the supply of electricity (currently these are bundled into the price per unit of power).
This would see many of the suburban residential customers serviced directly by the utility, (e.g. Sandton and Soweto) paying hundreds of rands per month before using a single kilowatt-hour (kWh) of electricity.
In a major overhaul of its tariff structure, it plans to reintroduce a service and administration charge levied per day for the provision of its service.
While Eskom doesn’t state explicitly that the changes are due to the increasing proliferation of rooftop solar at residential properties, it will force those customers on to a new time-of-use tariff.
These changes are included in its 121-page submission to energy regulator Nersa for the restructuring of its tariffs from its next fiscal (2023/24).
Time to ‘modernise’
It says “existing tariff structures are outdated and need to be modernised to reflect the changing electricity environment and crucial decisions in this regard need to be made to protect the electricity industry”.
“For example, it is no longer appropriate to recover fixed costs only through variable kWh-based charges.”
It argues that the unbundling and restructuring of tariffs “will remove artificial subsidies, provide greater transparency of costs, ensure the correct economic signal, and reflect a more accurate payback period by comparing the energy cost of the utility versus the energy cost of the alternative and not including network cost bundled with the energy in the analysis”.
One can see from the following charts that low-consumption residential customers will pay more under the proposed tariffs.
At 0kWh, indicative charges (based on current tariffs) are R938, R1508, R3408, and R562 on each of the Homepower tariffs (1/2/3/4), respectively. Homepower tariffs are based on supply sizes. Suburban households would likely be on Homepower 1, with even larger properties on Homepower 2 or 3. Homepower 4 is for smaller/lower income households*.
