Eskom is applying for a 16% increase for each of the next three years. The Chamber says in its submission to the National Energy Regulator of South Africa (NERSA) on Eskom’s Multi-Year Price Determination 3 proposal that there have been “no attempts by Eskom to be the driver for growth in this country and to keep energy costs competitive”.
Stating that it believes Eskom’s sales estimates are “optimistic, given a doubling of electricity prices over the period,” the Chamber says rather than an increase, it is forecasting a reduction in the use of electricity over the MYPD3 period. It cites the example of Nelson Mandela Bay where approximately 100MW of electrical boilers are currently being converted to coal.
“Energy intensive users are looking for alternatives or closing down as they are no longer competitive.”
The Chamber states that while the rules creating the tariff structure are “sound and fair,” these rules need to be extended to the tariffs that municipalities charge their customers. “The hidden taxation which is part of the municipalities’ tariffs must be looked at in the wider perspective of all the tariffs in the country,” adding that this is “one of the biggest issues with electricity tariffs in the country”.
Noting that taxes should be non-discriminatory for all electricity consumers, the Chamber asks how NERSA can keep a system in place “which is so fundamentally discriminatory as the tariff differences between municipal and Eskom customers”. The Chamber says it wishes to propose the introduction of a time-of-use tariff to the small consumer – domestic, commercial and agricultural.
“If the time-of-use tariff is introduced as an alternative on a voluntary basis for commercial and domestic consumers, these customers may shift their load profile, reducing the evening peak in an effort to save money.
“This is a win-win situation, where ex-pensive peaking generation demand is reduced and the customer has the opportunity to save money.”
