The South African electricity utility, Eskom, have submitted 2023 Tariff application to NERSA, the National Energy Regulator of South Africa. In this 120 page document, Eskom outline how they want to change Tariff Structures in order to charge their small users up to 4 times more than current rates.

1. Eskom Retail Tariff Application
For 2023 onwards
Mind map by
David Lipschitz
11 August 2022
Assumptions
by Eskom
Out of date
SSEG customers use
the grid as a battery
Exporting at mid day and
importing at night
Questionnaire
Mostly Eskom employees
Do they
represent
everyone?
Will they answer to save their
jobs or as they really feel?
Poor
questionnaire
design
2 choices in one answer
in questionnaire Gives the questionnaire designer
the answer they want!
Pages
10
11
IBT Inclining Block Tariffs with only 2 sets of
prices are difficult to explain?
Compare this with the new
pricing with 4 fixed charges and
6 sets of usage Tariffs?
See page 23
“Homepower”
39
IBT “not liked”.
TOU Tariff with “offset
billing” not explained
107
Wrong
questionnaire
design
Leading to bad analysis
and conclusions
Average
Averages for Eskom are completely
different for their customers
Eskom has a different risk profile to their customers.
Customers outsource their risks to their
suppliers. This is normal economics.
Pg 41
The major changes
Giving homeowners
and small users
the same benefits as big users
Charging capacity kVa fees
and usage kWh fees
But big users can minimize
their peak demand
Can small users minimize
their peak demand?
Charging multiple (4)
connection fees
To small users
Problems / questions
Why are Eskom’s clients
installing systems?
Lack of supply?
Load shedding?
Eskom providing less and less of their
product at higher and higher rates
It’s cheaper to do
own supply?
Why is Eskom pushing customers away
instead of working with customers?
Graph (figure 4) on page 16 is not well
explained or defined
Page 18 “suck changes do not
propose to increase the tariffs”
But the less someone users the
more they are penalized
Users are constantly told to use less, spending fortunes on
efficient appliances, moving to gas, installing solar water
heaters and heat pumps, obeying Eskom’s demands to use
less, but the more private people pay to use less the more
they are penalized
Meanwhile according to x a user
spending more than R2500 per month on
electricity will now spend less
Page 19. A person with 3 phase spending R844 per month
will now be expected to pay R3408 per month, and Eskom
will push this to R3956 in 2024
A person spending R7500 per month or
more will now pay less per month!
Page 43. Some prices will double.
People with multiple meters on a single account are
going to see huge increases in fees as Service fees
per account change to service fees per meter (POD
Point of Delivery)
We have lived in our house for 26 years. Zero
work has been done on our grid. What
additional fixed costs are required?
How come Eskom was ok from
1923 until 2022? What has
suddenly changed?
Eskom were already 3 separate
businesses in the 1970s and didn’t need
to change their rates structure
Page 33: why does Eskom think they can
push their risk onto their clients?
The transmission losses
numbers are wrong. Pg 38 etc
Why doesn’t Eskom Incentivise people to
remove their loads at peak time, this releasing
Eskom from building more power stations and
peaking power plants?
Eg Pg 97 E8
disincentivises this
Undefined
Offset rates
Payments to EGs for
electricity supplied to the grid
The fact that battery prices have declined 95%
since 2008 and EGs can either remove
themselves from the grid at peak times or
supply the grid at peak times
Tarries and TOU Tariffs for compensation for energy supplied to the grid
Pg 10
See graph page 28
for percentages
Note that the decreases are for existing (big) customers with
TOU Tariffs spending more than R1million a month on electricity.
Meaning that Eskom wants to reduce these prices and increase
homeowner and EG prices!
Lack of Tariff
Design Knowledge
The designer of this document
doesn’t understand how power
stations are financed
There are
major off takers
These are called
Base Load
The Base Load gives the utility the ability to finance the
power station, because the offtaker signs very long term
agreements with the utility, Eg a mine or smelter or
shopping center, for 25 to 40 years
Eskom say that 76% of their cost
structure is fixed costs. Page 18
How does this benchmark with other utilities
excluding the Italian Utilities?
Again the designers of this Tariff
application don’t understand how
power stations are financed
End users are the cream!
Not meant to be milked?
The elephant
in the room
Page 20 “most customers do
not register and are therefore
on the wrong Tariffs”
Eskom blame users for choosing other suppliers
“resulting in major sales, revenue and net
contribution losses for Eskom”
Why doesn’t Eskom own
up to its mistakes?
Eskom says that the changes are
required to “protect the electricity
industry” on page 52
But the Electricity
Industry is Undefined
And the document says that “the grid
provides backup and storage for DG”.
This is an out of
date concept
Eg the Duck Curve on page 71 is out
of date and Eskom have been on
about this since 2004!
It says “unchanged by PV”, but
that was a reference to Grid Tie
PV without batteries
Battery costs have decrease 95% in real terms since 2008
and capability has dramatically increased meaning that
smaller batteries can be installed with larger arrays and the
arrays can face all directions instead of only North this
flatttening the Curve
Eg pg 96
“Batteries have
higher losses”
True for Lead Acid with 60% round trip
efficiency and 5 hour charging time
Not true for LiOn with almost less than
4% losses and 1 hour or even
quicker charge time
Page 95 “Protecting
future revenue”
Eskom are pushing the customers away instead of
working with their customers to solve South
Africa’s huge electricity shortfall
Eskom 28 GW
Eskom should be 60 GW by now
South Africa needs 200 GW now and 300 GW by 2030
Good points
Page 21
“Promote Net
Billing”
Which will give Eskom indirect
access to embedded batteries
Eskom doesn’t want it’s
customers to defect from its grid
But it’s Tariffs tell a
different story