Electricity tariff calculation methodology must evolve — Department of Electricity and Energy

[Daniel Puchert]

Big changes coming to electricity prices in South Africa

South Africa's electricity and energy department wants to evolve the methodology for deciding and approving electricity tariff adjustments to ensure cost-reflective tariffs.

During a media briefing on Monday, 29 July 2024, the department included several slides discussing a tariff policy review in light of its unbundling, including proposing restructuring tariffs to remove artificial subsidies and provide greater transparency.

 

[Thugscub]

F off no more Vaseline left for those without solar systems.

 

[ProfA]

The fck? It's fcking simple actually. You use 1kwh, rain or shine, day or night, you pay x rands for that 1kwh. Simple. No other made up charges.

 

[konfab]

The fck? It's fcking simple actually. You use 1kwh, rain or shine, day or night, you pay x rands for that 1kwh. Simple. No other made up charges.

It isn't that simple, because the costs to produce that 1kwh change by time.

The simple way to do it would be to ditch kWh and switch to a capacity based system. Instead of buying time on a generating station, you buy capacity.
So you get a 5kW line for RX per month. Your meter doesn't allow you to use more than 5kW power. So you cannot run the stove, kettle and geyser at the same time.

Reality is that kwHs are not a realistic way to bill electricity because a power station is not a battery bank that you can just dispatch however much power you need.

This makes everyone's electricity payments very constant, makes the revenue constant for Eskom and simple to calculate. Users benefit because it gives them means to move around their electricity consumption to save electricity in a meaningful way. For example, getting a smaller geyser element would make sense because for most people, it wouldn't matter if the geyser took twice as long to warm up.

The ugly evening peak would get completely flattened out, making Eskom's life orders of magnitude more easy.

 

[leon.davibe]

i would think first port of call is sort out the corruption
then get TOU rates, with a grid feed tariff to match

maybe if managed correctly maybe the prices can even come down a bit
think about it what power stations has been added to the fleet since we paid what was regarded as among the cheapest rates in the world, and niow we pay expensive rates from the same fleet really

now i get that the maintenance can be a bit higher on old equipment
but not to the extent that we have to see way over inflation increases

 

[LCBXX]

i would think first port of call is sort out the corruption
then get TOU rates, with a grid feed tariff to match

maybe if managed correctly maybe the prices can even come down a bit
think about it what power stations has been added to the fleet since we paid what was regarded as among the cheapest rates in the world, and niow we pay expensive rates from the same fleet really

now i get that the maintenance can be a bit higher on old equipment
but not to the extent that we have to see way over inflation increases

This.
The ongoing looting (which includes non-paying municipalities) of Eskom must be culled first, thereafter they can go after the non-payers and illegal connections.

 

[leon.davibe]

This.
The ongoing looting (which includes non-paying municipalities) of Eskom must be culled first, thereafter they can go after the non-payers and illegal connections.

yea our constitution says all should have access to electricity among many others
yet somhow some think that means free electricity and whatever

 

[porchrat]

The fck? It's fcking simple actually. You use 1kwh, rain or shine, day or night, you pay x rands for that 1kwh. Simple. No other made up charges.

and the company maintaining the infrastructure... how does it get paid?

 

[Fuzzbox]

Funny how before these OINKERS got their fingers into Eskom everything worked.
Infrastructure was maintained properly.
Now there are all kinds of schemes to fleece the PAYING customers.
And the customers are getting less every day.

 

[Swa]

Yeah right, this will just give them more room to increase the cost like always happens with inefficient monopolies and communist regimes. Cost based tariffs are an economic fallacy.

 

[Flanders]

They're telling us that they're trying to dream up ways of taking more.

 

[ProfA]

and the company maintaining the infrastructure... how does it get paid?

From the x rand per kwh. It's not complicated. It worked perfectly fine for DECADES.

 

[Swa]

It isn't that simple, because the costs to produce that 1kwh change by time.

Or just get rid of all the methodologies over time and let providers compete. Costs to produce also change to competitive conditions, they get less. I don't know why this government wants to control everything yet everything goes to shite.

 

[PaulMurkin]

Yes they want to restructure, of course they do. They want to rape and pillage more. Going for gold in making people all equally poor is the ANC way.

 

[porchrat]

From the x rand per kwh. It's not complicated. It worked perfectly fine for DECADES.

How does the company maintaining the service of keeping the distribution infrastructure functional make enough money to stay in business if, for example, you only buy 1kWh per month?

Wrapping a fixed cost into a variable sale is stupid. They're providing a consistent service they should expect to charge a consistent service fee.

 

[Swa]

How does the company maintaining the service of keeping the distribution infrastructure functional make enough money to stay in business if, for example, you only buy 1kWh per month?

Wrapping a fixed cost into a variable sale is stupid. They're providing a consistent service they should expect to charge a consistent service fee.

It's shared infrastructure. Only the last few meters aren't but as I found out that's the owner's responsibility in any case.

 

[porchrat]

It's shared infrastructure. Only the last few meters aren't but as I found out that's the owner's responsibility in any case.

It's infrastructure maintained by a company with costs involved in doing so. It must reasonably be able to recoup those costs.

 

[ProfA]

It's shared infrastructure. Only the last few meters aren't but as I found out that's the owner's responsibility in any case.

Don't feed it

 

[B-1]

How does the company maintaining the service of keeping the distribution infrastructure functional make enough money to stay in business if, for example, you only buy 1kWh per month?

Wrapping a fixed cost into a variable sale is stupid. They're providing a consistent service they should expect to charge a consistent service fee.

I look forward to paying a fixed fee to bread companies to pay for their factories, transport etc. so I can have the luxury of buying bread while baking my own at home.

Its called the cost of business everyone has an outlay to recover from sales.

 

[porchrat]

I look forward to paying a fixed fee to bread companies to pay for their factories, transport etc. so I can have the luxury of buying bread while baking my own at home.

Its called the cost of business everyone has an outlay to recover from sales.

They're selling you a product while the people distributing the electricity to you are not.

(keep in mind I'm talking about the scenario fast approaching where distribution will be a separate entity, which is why all these funding models are being altered at the moment)