Wednesday, March 04, 2015

NERSA Consultation Paper: Eskom’s 2015/16 Time-of-Use (TOU) Structural Adjustment

It is reported that the NERSA public hearing held on 5 February 2015 to receive oral submissions on its consultation paper, published on 9 December 2014, on `Eskom’s 2015/16 Time-of-Use Structural Adjustment’ was poorly attended. The paper had been issued in response to an Eskom request that NERSA approve structural adjustments to its 2015/16 retail tariffs.

The NERSA decision on the application was due to be announced on 12 March 2015 but a copy of the letter dated 27 February 2015 from NERSA to Eskom, is now available. Questions have however been raised on whether the structural changes can be implemented for municipal tariffs in the 2015/16 financial year, as they were not included in the discussion and decision on the municipal tariff guidelines and benchmarks for this year.

Municipal tariff experts have indicated that the impact of the proposed structural adjustments will vary according to the load profile and customer mix of the municipality. The lack of adequate data and modelling capacity by municipalities may have contributed to the minimal response to the proposals. It is reported however that Eskom is developing a model that will assist in predicting the impact on the bulk purchase costs of municipalities.

There is little certainty however, in how customers will react to the price signals of the adjustments, which behaviour will be complicated by the incidence of load shedding. Questions have also been raised on the possible challenges that may be experienced by some municipalities in reprogramming some of their (older) metering equipment to incorporate the changes should they restructure their own TOU tariffs.

Copies of consultation paper and the NERSA approval letter to Eskom are available at http://www.ameu.co.za/LibraryReports/IndustryDocuments.aspx#5258211-nersa.
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