Eskom: Read the Nersa proposal

[Gaz{M}]

I just read the Nersa proposal by Eskom and I highly recommend you do the same to get a clear view of exactly what Eskom plans to do in the next 5 years and why. Cut through all the media nonsense and get your own understanding.

http://www.nersa.org.za/documents/e...nt Summary Submitted to NERSA_300909 modi.pdf

The most interesting graph for me was on page 86. It sets out the nominal tariff increases for electricity.

Currently, Eskom charges around 33c/kWh. You pay more because your municipality raises funds for the local network, admin, thieves etc.

So let's say you pay 60c/kWh. This means the overhead is 27c/kWh.

Eskom recommends a 45% increase for the next 3 years.

That makes their supply price:

49c, 66c, and 99c /kWh, (up from 33c)

So if your municipality keeps the same overhead cost, your actual bill will be:

76c, 93c and R1,26 /kWh (up from 60c)

If you use around 500 kWh per month, your bill would be:

R380, R465 and R630, up from R300 you pay today for 500kWh.

So this is a real percentage increase of:

27%, 55% and 110%

This is very different from what the media is saying. They claim the 45% will be directly added to your final bill. But this in incorrect, because the base electricity charge is much less than what you pay, and only this amount is increasing by 45%.

What this means is that your bill will roughly double in three years time, not treble like the media is claiming.

Can anyone see a flaw in my argument?

 

[Blaze786]

Thanks for the explanation, if you are correct that is much better than triple

 

[Kosmik]

Sounds like very good news. Giving the doc a read now. Can anyone in the industry confirm what you stating as well?

*EDIT* Although this is trusting the municipalitys to not raise their prices and blame on eskom. Transparency FTW for the next 3 years.

 

[VanZan]

This is very different from what the media is saying. They claim the 45% will be directly added to your final bill. But this in incorrect, because the base electricity charge is much less than what you pay, and only this amount is increasing by 45%.

What this means is that your bill will roughly double in three years time, not treble like the media is claiming.

Can anyone see a flaw in my argument?

Yes you did not take into account the mentality/innovation of the municipalities. They will add their little adjustment at the same time and bank on the fact that the public have already accepted the media perspective of
3x or more increase. If the petrol price goes up by 5% the foodprice also goes up by 5% despite the fact that the actual contribution that petrol have on the production cost is much less and don't forget - they have to increase their profit margin at the same time otherwise their % profit will decrease and thus all managers will get less bonus.

Welcome to capitalism.

 

[Vrotappel]

The knock on effect of the electricity price increase will be devastating for our economy. Economists are talking about a bleak festive season this year. Next year will be much worse.

 

[Creag]

Whilst it makes a little better reading and isn't as bad as is being portrayed, I still think I am going to investigate solar water heating. It sounds more like a reasonable investment, which will pay itself back as the price continues to rise. Even if it doesn't rise as steeply is suggested by the media, it should still pay itself off in the next 4 to 7 years.

 

[Djtay]

I just read the Nersa proposal by Eskom and I highly recommend you do the same to get a clear view of exactly what Eskom plans to do in the next 5 years and why. Cut through all the media nonsense and get your own understanding.

http://www.nersa.org.za/documents/e...nt Summary Submitted to NERSA_300909 modi.pdf

The most interesting graph for me was on page 86. It sets out the nominal tariff increases for electricity.

Currently, Eskom charges around 33c/kWh. You pay more because your municipality raises funds for the local network, admin, thieves etc.

So let's say you pay 60c/kWh. This means the overhead is 27c/kWh.

Eskom recommends a 45% increase for the next 3 years.

That makes their supply price:

49c, 66c, and 99c /kWh, (up from 33c)

So if your municipality keeps the same overhead cost, your actual bill will be:

76c, 93c and R1,26 /kWh (up from 60c)

If you use around 500 kWh per month, your bill would be:

R380, R465 and R630, up from R300 you pay today for 500kWh.

So this is a real percentage increase of:

27%, 55% and 110%

This is very different from what the media is saying. They claim the 45% will be directly added to your final bill. But this in incorrect, because the base electricity charge is much less than what you pay, and only this amount is increasing by 45%.

What this means is that your bill will roughly double in three years time, not treble like the media is claiming.

Can anyone see a flaw in my argument?

Why the hell would you post such a sensible argument. How dare you. When has facts and figures stood in the way of a good whinge from our MyKKK members

 

[TonyHawk]

The knock on effect of the electricity price increase will be devastating for our economy. Economists are talking about a bleak festive season this year. Next year will be much worse.

I believe the knock on effect will happen... but on the other hand to waste so much money on a festive season & Christmas is ridiculous.
People need to learn what it all means again... and if not having money to blow is it... all the better... people need to get their priorities right again.
If you keep feeding the sharks... they naturally will keep coming back
IMO