How to avoid a 405% increase in electricity prices from Eskom

[HosstheBoss]

The whole "Europe is more expensive" argument is lame in my opinion. If they are pricey thats their problem, they should be trying to make their electricity cheaper, its got nothing to do with us and its not a justification for our prices. Progress comes about in an attempt at being better than the next guy, not in being similar.

 

[undesign]

Because they are the de facto standard for "expensive" when it comes to electricity. But places like Mexico, Aus, Singapore etc are also still significantly more expensive than our 2018 pricing.

So what is the average electricity/gas usage split in Europe? If we want to compare prices we must understand usage.

 

[plugger123]

Enlarge your house bond with R100 000. (Should work out on about R1000+ extra per month)

Take the R100 000 and install solar panels.

Feed the electricity back to the grid so that the meter goes into reverse. At the moment there is no legislation regarding this. So it is not illegal to do it yet.

Enjoy free electricity that completely pays for itself.

 

[Unhappy1]

There is another side to the story - in South Africa, the lower income earners get subsidized electricity and water. So it's not that easy to compare. I'm not suggesting our electricity is proportionally cheaper compared to salary, but it's not as cut-and-dried as comparing average costs against average salaries.

I realise that , that's why i said other factors.

 

[acidrain]

Eskom could be making a move for going green, as coal will eventually run out, and the price increases are to slowly make up for the costs. This is just my assumption as I heard from an eskom engineer I worked with at their Wind Generation Research facility in Klipheuwel that they have plans for a 50 turbine farm in P.E.

How true it is, I can't say... I'd take it with a pinch of salt but as we all know coal isnt forever so eventually they will have to make a move for sustainable energy.

As far as Europe trying to make their electricity cheaper... think about the maintenance costs involved in a wind turbine or even a solar farm. I know for a fact that maintenance on any Vestas turbine is prohibited unless Vestas has their own team involved ( which btw doesn't come cheap ).

One can think of it as car manufacturers. They don't make money out of car sales. Its the services where they make their killing.

 

[FlatspinZA]

Enlarge your house bond with R100 000. (Should work out on about R1000+ extra per month)

Take the R100 000 and install solar panels.

Feed the electricity back to the grid so that the meter goes into reverse. At the moment there is no legislation regarding this. So it is not illegal to do it yet.

Enjoy free electricity that completely pays for itself.

I don't think your meter is going to go backwards - they're designed to go forwards.

Anyway, plans are afoot to allow people to feed back into the grid: http://www.mediaclubsouthafrica.com...een-240212&catid=48:innovationnews&Itemid=115

 

[system32]

Except no.

Germany is paying ~R2.7 right now already, which is still easily 2x as much as we will be paying in 2018. Factor in inflation & we're still very very far away from most expensive in EU.

Same thing with the UK...our 2018 prices are still 25% lower than their current ones.

Oh and Denmark is at R3.7...

Because they are the de facto standard for "expensive" when it comes to electricity. But places like Mexico, Aus, Singapore etc are also still significantly more expensive than our 2018 pricing.

Not sure where you got your Denmark and UK electricity prices from, but using €1=R11.5 for 7,500kWh/year
http://www.energy.eu/#Domestic-Elec

• Denmark - R2.94/kWh
• Germany - R2.76/kWh
• UK - R1.45/kWh

On the other hand - using 501kWh/month average price in 2012:

• CoJ/CityPower - R1.22/kWh
• USA - R1.02/kWh
• Canada - R1.05/kWh
• Hong Kong - R1.03/kWh
• Bulgeria (Europe) - R0.95/kWh
• Romania (Europe) - R1.22/kWh

Europe is not increasing their electricity at 16% for the next 5 years.
If ZA implements a compound 16% increase for 5 years, R1.22/kWh will become R2.56/kWh – which will make SA in the top 20 most expensive countries in the world, more expensive than most of Europe – see http://www.energy.eu/#Domestic-Elec

Electricity is only cheaper for the likes of BHP which pay 8.8c/kWh (DA’s Pieter van Dalen on p6 of the Sunday Times, Business Times 28 Oct 2012), whereas the rest of us (home users) pay 122c/kWh.

 

[Sinbad]

Did I miss something? We pay R1.08 on average per kWh, and I can't remember us ever paying below 70c/kWh before VAT...

My total municipal bill (rates, water, sewerage, refuse) when I moved into this house in 2006 was around R800

Just my electricity now costs double that, even after replacing all bulbs with cfl and led, and putting in a solar geyser.

 

[elvis_presley]

Electricity is only cheaper for the likes of BHP which pay 8.8c/kWh (DA’s Pieter van Dalen on p6 of the Sunday Times, Business Times 28 Oct 2012), whereas the rest of us (home users) pay 122c/kWh.

BHP's a special case, which obviously needs fixing, but in general industry buying power is around 1/2 that of residential users, which is illustrated by that table of yours - it's what's done globally, but it usually works like cellphone contracts - you specify how much you want to buy bulk monthly, and if you use more you pay out-of-band rates which will probably be the same or more as residential use.

Oh, and I pay R1.02 Jhb's ripping you off. I wonder if they justify it like they do the petrol prices: "we need to bring the electricity up from the coast"

 

[Sinbad]

BHP's a special case, which obviously needs fixing, but in general industry buying power is around 1/2 that of residential users, which is illustrated by that table of yours - it's what's done globally, but it usually works like cellphone contracts - you specify how much you want to buy bulk monthly, and if you use more you pay out-of-band rates which will probably be the same or more as residential use.

Oh, and I pay R1.02 Jhb's ripping you off. I wonder if they justify it like they do the petrol prices: "we need to bring the electricity up from the coast"

The payers in joburg have to subsidize hordes of non-payers.
That said I also pay in the region of R1 per kwh.

 

[HavocXphere]

And how does that factor to their average income vs/ our average income?

ooohh Socratic style - I like it.

Yeah purchase price parity. I suppose it should be taken into account, though I don't think a full adjustment is appropriate given that the main input cost is coal...which has a roughly similar price everywhere. i.e. Its not like a big mac which has 50 ppl involved in the process & each of those salaries @ local PPP needs to be factored in.

Fair point though - a straight up FX conversion isn't appropriate.

 

[Yotch]

On the other hand - using 501kWh/month average price in 2012:

• CoJ/CityPower - R1.22/kWh
• USA - R1.02/kWh
• Canada - R1.05/kWh
• Hong Kong - R1.03/kWh
• Bulgeria (Europe) - R0.95/kWh
• Romania (Europe) - R1.22/kWh

I just looked at my latest power bill from CoJ. I paid R893-05 for 495kWh or approximately R1-80 per kWh. Officially I pay 91c per kWh but this does not include a Demand Side Management Levy Charge, a Service Charge and a Network Charge which make up nearly 50% of the total electricity costs. These additional charges can be increased at any time by the CoJ so the kWh figure has little influence on my total electricity costs.

 

[Tick]

Except no.

Germany is paying ~R2.7 right now already, which is still easily 2x as much as we will be paying in 2018

"Except" yes, actually. Lying about something doesn't make it true.

I would love to see how you get to R0.67 for a typical middle-class household in South Africa. We have a small house with only two people, use relatively conservatively (don't have aircon, run heaters as little as possible) and we're already paying far far more than what you claim. Absolutely dishonest of you to take the lowest-tier price.

Germany is also much more expensive than London.

Do the math folks, we're already as expensive as some EU members. That "we're still much cheaper" meme just isn't really true anymore ... and within five years we'll really be more expensive than most EU countries. (See, part of the problem is Eskom wants to fund capital expenditures but with our ever-weakening debt ratings they are struggling to find anyone willing to lend it the money.)

For those who want to confirm HavocXSphere is not really being entirely honest, just calculate what you are actually paying on average and then check here: http://en.wikipedia.org/wiki/Electricity_pricing

UK 17.85 (this is just *slightly* higher than what a middle class South African home is paying now)
Germany 31.41
France 19.39
Canada 10.78
Spain 22.73
Ukraine 3.05 to 3.95
United States 8 to 17
New Zealand 19.15
Iceland 9 to 10
(US cents/kWh)

In five years time the typical South African household will pay basically more than any of the above.

 

[FlatspinZA]

"Except" yes, actually. Lying about something doesn't make it true.

I would love to see how you get to R0.67 for a typical middle-class household in South Africa. We have a small house with only two people, use relatively conservatively (don't have aircon, run heaters as little as possible) and we're already paying easily double what you claim. Absolutely dishonest of you to take the lowest-tier price.

Germany is also much more expensive than London.

Do the math folks, we're already as expensive as some EU members. That "we're still much cheaper" meme just isn't really true anymore ... and within five years we'll really be more expensive than most EU countries. (See, part of the problem is Eskom wants to fund capital expenditures but with our ever-weakening debt ratings etc., is struggling to find anyone willing to lend it the money.)

I used to brag how cheap SA was when I last lived in the UK ('92-'95). When I got back everything was 4 times more expensive. Something happened while I was gone, buggered if I can remember what it was?

 

[elvis_presley]

I just looked at my latest power bill from CoJ. I paid R893-05 for 495kWh or approximately R1-80 per kWh. Officially I pay 91c per kWh but this does not include a Demand Side Management Levy Charge, a Service Charge and a Network Charge which make up nearly 50% of the total electricity costs. These additional charges can be increased at any time by the CoJ so the kWh figure has little influence on my total electricity costs.

Holy crap, that's ridiculous. We know that Eskom bulk sells power at around 60c/kwh ... so this means CoJ marks that up to 91c and THEN adds all its charges on top of it? At least in Durban, metro electricity marks the raw juice up by 42c, and for that they maintain the whole electricity infrastructure and manage the power.

 

[FlatspinZA]

Holy crap, that's ridiculous. We know that Eskom bulk sells power at around 60c/kwh ... so this means CoJ marks that up to 91c and THEN adds all its charges on top of it? At least in Durban, metro electricity marks the raw juice up by 42c, and for that they maintain the whole electricity infrastructure and manage the power.

You forget that Eskom bulk sells it, AND they collect their payment from one source. In turn, municipalities sell it to hundreds of thousands/millions of customers, from whom revenue needs to be collected. Automatically the cost increases exponentially.

I am not saying that municipalities are charging accordingly, but it is easy to forget that costs aren't so easily quantifiable.

 

[system32]

BHP's a special case, which obviously needs fixing, but in general industry buying power is around 1/2 that of residential users, which is illustrated by that table of yours - it's what's done globally, but it usually works like cellphone contracts - you specify how much you want to buy bulk monthly, and if you use more you pay out-of-band rates which will probably be the same or more as residential use.

BHP may be a special case, but how much of Eskom's capacity do the smelters use - 10%, 20%?
How many other special cases exist?
Looking at the Europe table, large consumers also pay less, but not 8.8 vs 122 less?

Oh, and I pay R1.02 Jhb's ripping you off. I wonder if they justify it like they do the petrol prices: "we need to bring the electricity up from the coast"

Q. Does R1.02/kWh include VAT, Connection Fees, DSM, Network Charge, etc?
Q. Is R1.02/kWh for pre-paid, for how many kWh/month?

R1.22 is for 501kWh/month on pre-paid, and includes VAT (I can't claim VAT back)

But you are correct - CoJ is ripping pre-paid customers off - it's called not-telescopic IBT - in contravention of NERSA guidelines.
See "The Star" http://www.iol.co.za/the-star/city-power-will-not-switch-off-system-1.1386140#.ULL6soYRoWE

CoJ PostPaid customers pay even more.

 

[Sinbad]

Joburg postpaid:

Stepped billing ranging from 89.52c to 92.65c per kwh, ex vat. So R1.02 to R1.055 per kwh.

As mentioned though, the killer is the service charge of R288 and the network charge of R78 pm

 

[system32]

I just looked at my latest power bill from CoJ. I paid R893-05 for 495kWh or approximately R1-80 per kWh. Officially I pay 91c per kWh but this does not include a Demand Side Management Levy Charge, a Service Charge and a Network Charge which make up nearly 50% of the total electricity costs. These additional charges can be increased at any time by the CoJ so the kWh figure has little influence on my total electricity costs.

CoJ Post Paid is more expensive than pre-paid.
Once you add the Network Charge, DSM, Service Charge, it is more expensive below 2,000kWh/month.
For 501kWh post-paid is R233/month more expensive.
CoJ Post Paid - including Service Charge, Network Charge, DSM:

0kWh/Month -> R367.52/month (Service Charge, Network Charge, VAT)
100 kWh/month -> R471.97/month -> R4.72/kWh
200 kWh/month -> R576.42/month -> R2.88/kWh
300 kWh/month -> R680.87/month -> R2.27/kWh
400 kWh/month -> R785.31/month -> R1.96/kWh
500 kWh/month -> R889.76/month -> R1.78/kWh
600 kWh/month -> R995.93/month -> R1.66/kWh
700 kWh/month -> R1,102.10/month -> R1.57/kWh
800 kWh/month -> R1,208.26/month -> R1.51/kWh
900 kWh/month -> R1,314.43/month -> R1.46/kWh
1000 kWh/month -> R1420.60/month -> R1.42/kWh
​

CoJ Pre Paid (Inc VAT):

0kWh/Month -> R0.00/month -> R0.00
100 kWh/month -> R89.24/month -> R0.892/kWh
200 kWh/month -> R178.48/month -> R0.892/kWh
300 kWh/month -> R267.72/month -> R0.892/kWh
400 kWh/month -> R356.96/month -> R0.892/kWh
500 kWh/month -> R446.20/month -> R0.892/kWh
501 kWh/month -> [-]R447.42/month -> R0.893/kWh[/-] R611.98/month -> R1.22/kWh (R164.56 for 1kWh more)
600 kWh/month -> [-]R568.35/month -> R0.947/kWh[/-] R732.91/month -> R1.22/kWh
700 kWh/month -> [-]R690.50/month -> R0.986/kWh[/-] R885.06/month -> R1.22/kWh
800 kWh/month -> [-]R812.65/month -> R1.016/kWh[/-] R977.21/month -> R1.22/kWh
900 kWh/month -> [-]R934.80/month -> R1.038/kWh[/-] R1,099.36/month -> R1.22/kWh
1000 kWh/month -> [-]R1,056.96/month -> R1.057/kWh[/-] R1,221.51/month -> R1.22/kWh
1001 kWh/month -> [-]R1.057/kWh[/-] R1,246.36/month -> R1.25/kWh
​

CoJ are not using IBT as recommended by NERSA - hence the second rate.
PrePaid is cheaper up to about 2000kWh/month.

PostPaid at R4.72-R2.27 is more expensive than most of Europe:
Denmark - R2.94/kWh
Germany - R2.76/kWh
UK - R1.45/kWh

 

[Sinbad]

It's joburg's stated intention to make prepaid cheaper than postpaid. Because they can't manage a debtors ledger properly.