Eskom Price Hikes : Consumers using less to see lower increases

Cape Town - Though electricity tariffs will increase by almost 25 percent from 1 April, those who use less power can expect to experience lower increases in their electricity rates, says Minister of Energy Dipuo Peters.

"The more you use the more you pay, that's why we call on people to become more energy efficient," said Peters.

The National Energy Regulator of South Africa's (Nersa) declining block tariff for residential users, which was released on Wednesday, provides a sliding scale for homeowners that procure their electricity directly from Eskom, rather than via their municipality.

Homeowners who use between 351kWh and 600kWh of electricity a month would see an effective increase of 21.95 percent from 1 April, while those who use over 600kWh a month would have to pay 35.82 percent more.

Those who use less electricity procured directly from Eskom, could expect to pay less from 1 July, with those that use 50kWh or less in a month set to pay 10.59 percent less for their electricity and those who use between 51kWh and 350kWh of electricity a month would pay 5.20 percent less.

Consumers who buy their electricity from municipalities will have to wait until Eskom announces how much it will increase its rates to municipalities.

Peters said the guideline for municipal distributors outlined by Nersa, called for a 15.3 percent increase from 1 July 2010, a 16.06 percent increase from 1 July 2011 and a 16.16 percent increase from 1 July 2012.

"We implore municipalities to keep the increases for the domestic sector in alignment with the Nersa determination," said Peters.

She said her department had made an appeal to Eskom that they look at increasing the amount of free electricity for those registered as indigent, which is currently set at 50KW hours a month.

The government had not concluded its process of a funding model for Eskom and a working group was looking at how to fund Eskom through public sources and Independent Power Producers (IPPs), while ensuring the country had security of supply, she said.

Peters said the outcome of a request put out by the Department of Public Enterprises requesting interest from the private sector in a 30 percent stake in the Kusile Power Station would be announced soon.

The department was investigating sectors such as the sugar-producing industry and the petro-chemical industries for their potential to assist Eskom with co-generation of electricity.

Another working group was looking at how to cushion the poor from rising tariffs.

"So long as we invest in infrastructure to support electricity generation and transmission we would definitely need quite substantial amounts of capital, to be able to invest as government.

"So we are looking at alternative sources, but are also saying how do we as government keep ensuring that the poorest of the poor and household consumers are not going to be burdened by the rising tariffs," said Peters.

Government was also driving a solar water heating project which would help to cut down on power usage. Peters said the department would soon be advertising for suppliers and wanted to connect 50 000 solar water heaters by the end of this year.

Her department was also working with the SA Bureau of Standards (SABS) to ensure that the quality of the units was sufficient and that these carried at least a 10-year guarantee.

She said early next year the Department of Trade and Industry would be releasing regulations for the hospitality industry to retrofit solar power.

Also briefing the media, the Minister in the Presidency for Performance Monitoring and Evaluation Collins Chabane said Nersa's decision to increase electricity rates by 25 percent followed a protracted public participation stage where business, labour and civil society all had a chance to give their views.

Nersa said in a statement on Wednesday that it had received 427 written statements and 85 oral presentations at its public hearings, from various stakeholders including private individuals and intensive and small users.

"If we accept that Eskom is a state utility and the state gets its revenue from the public then whichever way you go, one way or another you will have to find that money from the public, either through taxes or increases in tariffs," said Chabane. - BuaNews