Eskom offers useful modelling tools on its website that let customers see how their monthly bill will change should Nersa approve its revised tariff structure.
Under its revised Homepower price plan, Eskom’s grid connection fee will increase from R218 to R938.
Residential customers on this tariff would pay R938 per month before using a single kilowatt-hour of electricity.
That will result in Homepower users with low monthly usage, such as those with solar power systems who only rely on Eskom for backup, paying substantially more per month.
Eskom believes the current practice of applying average increases to electricity tariffs creates problems for the industry.
For this reason, it submitted a new tariff plan to the National Energy Regulator of South Africa (Nersa).
Currently, Eskom collects revenue from electricity tariffs based on the multi-year price determination (MYPD) methodology.
The power utility argues that there is currently no link between the charges raised and the Nersa-approved cost per division.
“Tariffs need to be updated to accurately reflect current Eskom divisional costs to avoid volume and trading risk, to reflect cost drivers more accurately, to avoid unintended and unwarranted cross-subsidies, and to ensure that tariff charges cater for the unbundling of Eskom,”
The power utility is busy unbundling its operations into separate entities, namely Eskom Holdings, Distribution, Transmission and Generation.
Eskom maintains that even with the increased grid connection fee charge, the average Homepower customer will pay the same or less on their monthly electricity bill.
The graph below shows the impact of the proposed tariff changes for those on the Homepower 4 plan.
It shows a breakeven point around the 800kWh mark where an electricity bill will be cheaper under the new tariff plan.
Eskom also says that those on its Homelight plan, which includes less affluent customers, will be paying less.
The power utility also wants to eliminate incline block tariffs, which effectively means it will charge consumers less for higher usage, instead of more.
After querying Eskom for more specific details about why the plan was necessary, the utility directed us to an information portal which explains some of its arguments in favour of the revised calculations.
The page provided three links to modelling tools for calculating your monthly bill based on usage. The following tariffs are modelled:
- Homepower and proposed Homeflex
- Landrate, Businessrate, Homepower, and Homelight
- Large power user tariffs, Megaflex; Nightsave Urban Large; Nightsave Urban Small; Miniflex; Ruraflex and Nightsave Rural
The tools come as downloadable Excel worksheets with formulas that do all the calculations for you.
Although the pages contain an overwhelming number of data points and amounts, the tools are quite useful once you understand them.
On the first page, titled “Instructions”, Eskom provides the steps for using the tool, including where on your Eskom bill you can find some of the details you need to input for the calculations.
The second page of the worksheet has a section at the top where you can input variables from your bill, like your notified maximum demand (NMD).
There is also an orange row which contains entries for your usage in kWhs in each month of the year.
By default, Eskom has pre-populated this to 1,000kWh for each month.
Once you’ve changed these variables to your own, the calculations will adapt to show you intricate details about how much you currently pay and will pay for various charges.
That includes cost elements such as the generation capacity charge, energy charges, network capacity charge, network demand charge, ancillary service charge, and service and administration charges.
There are also graphs comparing your monthly bill under the current pricing plan with the proposed tariffs.
In addition, the other pages of the worksheet show precise breakdowns of the tariff charges under the current tariff plan and the revised plan for every month.
The image below shows some of the data displayed using Eskom’s default pre-populated 1,000kWh usage.