How much Eskom wants to charge for using 0kWh — up to R3,474 for home users

Eskom’s proposed electricity tariff restructuring will see many residential electricity users paying between three and six times more for a grid connection if they don’t use electricity during the month.

The power utility submitted the tariff plan to the National Energy Regulator of South Africa (Nersa) in August 2022 and gave three primary reasons for the revision.

Firstly, Eskom said tariffs were not aligned with energy, network, and retail costs because of the practice of implementing average price increases each year as part of the Multi-Year Price Determination methodology.

Secondly, the unbundling of Eskom’s various divisions required that the charges become more reflective of the costs per division. This would ensure each entity collects appropriate revenue to account for its operational expenses.

The utility said there was currently no link between the charges raised and the Nersa-approved cost per division.

Finally, it maintained the evolving electricity industry would mean more self-generation comes into play, which meant tariff structures had to be adjusted to protect all customer interests and ensure adequate recovery of Nersa-approved revenue.

Bad news for grid-tied solar users

As part of the new plan, Eskom wants to add a generation capacity charge and increase the network capacity charge of connections, irrespective of how often that connection is used.

While this will have a minimal impact on average electricity users, smaller households with lower monthly consumption and those who self-generate with solar will pay more.

That could become a deterrent for South Africans looking to invest in solar power while staying on Eskom’s grid for backup.

One of the benefits of a solar and battery system is that you have power during load-shedding and can keep your grid usage low, saving on your electricity bill.

Another key change in Eskom’s revised tariff plan is the scrapping of the Incline Block Tariff (IBT).

Eskom would no longer penalise customers for using high amounts of electricity by charging more if they exceed certain thresholds.

Instead, the average tariff charged per kWh will be lower, incentivising increased electricity use.

Eskom is also proposing a new time-of-use (TOU) tariff called Homeflex, which will have cheaper tariffs for electricity consumed during periods of low demand and expensive rates during peak demand.

That could be a boon to solar power users that use their backup power during peak demand and Eskom’s grid in low-demand periods.

That’s provided the higher network capacity charges don’t erode their savings.

Should Eskom’s proposed tariff plan be approved, its impact on prices will vary greatly depending on the type of tariff plan a consumer is on and how much electricity they consume.

We used Eskom’s online modelling tools to calculate how much more or less Eskom will be charging customers who have an Eskom connection but don’t use any electricity from the grid.

Regarding Eskom Direct customers, we found that Homepower users who used 0kWh will be paying between 269% and 330% more simply for having a grid connection, or about four times more than they currently do.

For example, a Homepower 1 customer who previously paid between R208 and R222 for their connection will now be paying between R895 to R956 per month.

Homelight customers will not see any change in their grid connection fees, which currently cost nothing if they don’t use electricity and will continue to remain the case.

The results for Landrate and Businessrate customers who purchase electricity directly from Eskom are a bit more of a mixed bag.

The table below summarises the charges Eskom Direct customers currently pay and could pay under Eskom’s revised tariff plan should they use no electricity from Eskom’s grid.

Now read: Eskom launches online database for skilled experts who can help fight load-shedding