Feb 24, 2010
Regulator sets much-vaunted block tariff structure in motionBack
Eskom|Africa|South Africa|Free Basic Electricity Allowance
© Reuse this
The tariff structure, which is viewed as a key tool in providing a cross-subsidy for low-income domestic consumers and which is also a requirement of the relatively new Electricity Pricing Policy, would be implemented during the period from April 1, 2010, through to March 31, 2013.
In 2010/11, the new mechanism will translate, owing mainly to implementation issues, into a 10,59% reduction in the tariff, to 54,7c/kWh, for households consuming less than 50 kWhs of power monthly, and a reduction of 5,2%, to 58,48c/kWh, for those consuming between 51 kWhs and 350 kWhs monthly.
The tariff would increase by 5,4% and 5,5% in the 2011/12 and 2012/13 years respectively (rising eventually to 60,83c/kWh) for those in the sub-50-kWh band, and by 13,23% and 13,5% respectively for those consuming between 51 kWhs and 350 kWhs, with the price rising to 75,09c/kWh by the end of the MYPD2 period.
By contrast, households consuming between 351 kWhs and 600 kWhs monthly will face immediate increases of 21,95%, raising the price to 72,35c/kWh in 2010/11, with subsequent yearly increases of 25,8% and 25,9% planned, which would raise the price to 120c/kWh in 2012/13.
Those households consuming more than 601 kWhs monthly would face relatively punitive tariff increases of 35,82% to 83,74c/kWh in 2010/11, followed by increases of 25,8% and 25,9% in 2011/12 and 2012/13, which would raise the price to 132c/kWh by the end of the MYPD2 period.
Nersa calculates that the average residential tariff across all four blocks would be 60,6c/kWh in 2010/11, rising to 68,83c/kWh next year, and to 78,62c/kWh by 2012/13.
Nersa's Thembani Bukula said that the block tariffs would be carried over to the block tariffs of the municipalities, which distribute power, mostly generated by Eskom, to the majority of residential consumers in South Africa.
Earthlife Africa, which has been a strong advocate of block tariffs, welcomed Nersa's decision "to implement a rising residential step block tariff".
However, it implored the regulator to revise the 50 kWh of free basic electricity allowance and to consider increasing it to 200 kWhs per household a month.
"There needs to be mechanisms to safeguard the millions of poor people in SA from these tariff increases," it said, noting that Nersa had approved increases of 24,8% in 2010/2011, 25,8% in 2011/2012 and an increase of 25,4% in 2012/2013.
Edited by: Creamer Media Reporter© Reuse this Comment Guidelines
Other Electricity News
Recent Research Reports
Automotive 2014: A review of South Africa's automotive sector (PDF Report)
The report provides insight into the business environment, the key participants in the sector, local construction demand, geographic diversification, competition within the sector, corporate activity, skills, safety, environmental considerations and the challenges...
Construction 2014: A review of South Africa's construction sector (PDF Report)
Construction data released during 2013 hints at a halt to the decline in the industry during the last few years, with some commentators averring that the industry could be poised for recovery. However, others have urged caution, noting that the prospects for a...
Electricity 2014: A Review of South Africa's Electricity Sector (PDF Report)
This report provides an overview of the state of electricity generation and transmission in South Africa and examines electricity planning, investment in generation capacity, electricity tariffs, the role of independent power producers and demand-focused initiatives,...
Defence 2013: A review of South Africa's defence industry (PDF Report)
Creamer Media’s 2013 Defence Report examines South Africa’s defence industry, with particular focus on the key players in the sector, the innovations that have come out of the defence sector, local and export demand, South Africa’s controversial...
Road and Rail 2013: A review of South Africa's road and rail infrastructure (PDF Report)
Creamer Media’s Road and Rail 2013 Report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail network, the funding and maintenance of these respective networks, and the push to move...
Liquid Fuels 2013 (PDF Report)
Creamer Media’s 2013 Liquid Fuels report examines South Africa’s liquid fuels market, focusing on the business environment, oil and gas exploration, the country’s feedstock supplies, the development of South Africa’s biofuels industry, fuel pricing,...
This Week's Magazine
A structured approach, wherein managers personally engage at each level of the project, is necessary to mitigate delays to the workflow on mega construction projects, says State-owned Eskom Kusile power station projects GM Abram Masango. The 4 800 MW Kusile power...
Construction of transmission lines to evacuate power from a regional hydroelectric project in East Africa, which was hanging on the balance following the withdrawal of financing by key partners, is now back on track. After six months of uncertainty, the African...
Three Memorandums of Understanding (MoUs) were signed between South African and Malaysian companies at the Malaysian High Commission in Pretoria on Friday. These MoUs are part of the indirect offsets programme South Africa is providing in return for Malaysia’s...
The South African new vehicle market may well dip to 640 000 units in 2014, says Toyota South Africa Motors (TSAM) sales and marketing senior VP Calvyn Hamman. This is the first prediction that anticipates a drop in the market. To date economists and industry bodies...
Nissan will re-enter the South African minibus taxi industry in March, when the new NV350 Impendulo goes on sale. The 16-seater has been specifically tailored to meet the terms of government’s Taxi Recapitalisation Programme, which aims to replace South Africa’s...