GEORGE NEWS - Eskom's proposed tariff structure adjustments tabled to the National Energy Regulator (Nersa) have been met with huge concern, especially in the current economic climate.
Among its proposals are:
• Doing away with inclining block tariffs (the smaller your consumption, the cheaper it is per unit and the more your consume, the more expensive it becomes);
• Introducing a residential time-of-use tariff, called Homeflex, for urban residential customers. Homeflex will only be mandatory for consumers who have embedded alternative power generation (electricity that they want to sell back to the grid).
• Changes to peak pricing by adjusting time-of-use (TOU) tariffs and increasing the evening peak to three hours (from two hours), reducing the morning peak to two hours (from three hours), and introducing a two-hour "standard period" (mid-system demand) on a Sunday evening.
• It also proposes that the off-peak rate during summer (nine months) be applicable during winter (three months) and the peak rate of winter to be applicable during the summer months.
The concern among renewable energy consumers is that the proposed Homeflex tariff structure could reduce municipal bill savings gained through generating their own power.
"The tariffs need to be published first before the real impact can be calculated, but I believe it could discourage people from turning to renewables," says Johan de Klerk, general manager of Power Measurement and Distributors in George.
Gerhard Strydom of solar systems supplier Solar4Eden said it could negatively impact their business in a time where trading is already "very shaky".
"It could make potential clients think twice, but it could also go the other way where people decide to go off-grid completely, which would provide a stimulus. The prevailing uncertainty complicates purchasing. You do not want to buy too much stock which you cannot sell, but you also do not want to be caught off guard with inadequate supplies if the demand goes up."
'Choking the economy'
Mining and energy expert Ted Blom said in an eNCA interview that the proposed peak tariff changes are similar to what Eskom tried to push through in 2015 and would generate far more income for the power utility.
Also, doing away with the incline block tariffs means consumers are going to be paying a lot more upfront for the first R1 000 or 600kWh. "You will only get the benefit of the discount or new tariff after you have consumed two households' worth of electricity - which most people do not get to. It is really going to burden every household and will be an excessive burden on households that do not buy a lot of electricity because they cannot afford it."
He said the proposal could double the average person's electricity bill. "They [Eskom] are trying to choke the economy just to make sure that they survive."
Poor hit hard
AHi chairman Dr Willie Cilliers said if the inclining block tariff system is to be done away with, those who can afford only a R20 purchase at a time might not be able to buy electricity. "If you take into account how many millions of people have lost their jobs, I simply do not know how this would work."
He said a steep price increase in electricity prices would be "catastrophic" for businesses. "The effects of the restrictions have already made it a challenge for them to survive. As it is, it will take between three and five years for business to recover to 2019 levels."
Eskoms argues the changes "do not propose increasing tariffs, but instead ensuring the fair recovery of costs by all connected to the grid through tariffs that more accurately reflect the value of being grid-tied.
Such changes must not be viewed as 'anti-renewable', but rather as an attempt to support the connection of alternative energy resources in a responsible way and to avoid unwarranted and non-economic cross-subsidies."
Nersa's pronouncement on the tariffs is expected in March.
In January, Nersa granted Eskom permission to recover R6-billion of revenue, which is also feared could impact the annual price increase.
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