On 24 Feb 2010, NERSA approved Eskom’s MYPD2 (Multi-Year Price Determination 2) with increases in Eskom’s nominal tariffs of 24.8% for the 2010/2011 year, 25.8% for the 2011/2012 year and 25.9% for the 2012/2013 year.
NERSA also issued guidelines to prevent municipalities from passing on the full nominal amount of the increase as buying the electricity from Eskom only represents approximately 67% of the cost of providing electricity by the municipalities. The three years of municipal increases were approved at 15.33% effective July 1, 20l10, 16.03% effective July 1, 2011 and 16.16% effective July 1, 2012. The result of this will be to level out what end user customers pay for electricity as many current municipality tariffs are significantly higher than Eskom’s direct to the customer tariffs.
Finally, in a real blow to the domestic segment, NERSA announced the long awaited “residential inclining block tariff structure.” In simple terms, the more you use the higher your tariff.
Very small household users, less than 50 kwh/mo, will see a 10.59% reduction in 2010 followed by increases of 5.4% and 5.5% in the succeeding 2 years.
The next level up, households using 51 – 250 kwh/mo will see a reduction of 5.2% in 2010 followed by increases of 13.23% and 13.5% in years 2 and 3.
Households using 351 – 600 kwh/mo will face a much larger increase of 21.95% in 2010 followed by increases of 25.8% and 25.9% in years 2 and 3.
Finally, larger households using 601 or more kwh/mo face a punitive tariff increase of 35.82% in 2010, followed by increases of 25.8% in 011 and 25.9% in 2012 which ultimately brings this tariff to R1.32/kwh in 2013. This is in stark contrast to the average domestic tariff of R0.7862/kwh in 2013.
These residential block tariffs will be carried over to the municipalities so all residential customers will be subject to these tariffs. The average consumption of all households in South Africa is 1100 kwh/mo according to Eskom. This means that hundreds of thousands, if not millions of individual homeowners will see their electricity bill more than double over the next three years.
With rising energy costs and a volatile energy future in South Africa we all need to find ways of cutting down on electricity consumption which ultimately affects our finances. Eskom is building new power plants, but these are years away as it takes 5 – 6 years minimum from the time construction is started until a new power plant comes online.
For the individual homeowner there are a number of things you can do to reduce your electricity usage immediately and at very low cost.
Geysers are the number one consumer of electricity in the home and can use up to 50% of all the electricity you consume.
The second area to look at is HVAC (Heating, Ventilation and Air Conditioning).
There are many options to reduce your home energy consumption. The capital costs and running costs vary from solution to solution. How much you can save, how much will it cost you and what is the optimum solution for your home will vary.
The very next best thing to do is to start saving on your water account too. When you install Water Rhapsody’s rainwater harvesting system you get off the grid and can save up to 90% on your water account. Apart from the savings you conserve water, which is really each and everyone’s responsibility.