Municipal Tariff Study
description
Transcript of Municipal Tariff Study
Municipal Tariff Study
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Contents
1. Scope of Study2. Issues Raised3. Methodology4. NERSA vs. Municipal Tariffs5. Municipal margins6. Conclusions
Scope of Study
• The study is not to show cheapest or most expensive tariff.• The work to date has been to develop an agreed upon
methodology to compare dissimilar tariffs with a minimum of bias.
• The current work has focused on establishing the current state of affairs and highlighting trends.
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Issues Raised
1. Municipal tariffs are not sustainable.i. Municipal tariffs are increasing at greater rates than
Eskom.ii. Municipal tariffs are being changed to focus on fixed
charges.iii. Municipalities are padding tariffs with non standard
charges.2. Municipal tariffs are out of kilter with NERSA approval
tariffs.
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Methodology
• Data was collected from NERSA and published municipality tariff booklets.
• Anonymous sample data was collected from various contributors to provide user profiles.
Tariff Universe
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2746 Tariffs 187 Licensees
Tariffs
Load Heavy Tariff (kWh & kVA)
TOU
Energy ChargeWinter PSOSummer PSO
Demand ChargeWinter MDSummer MD
Fixed ChargeNACFixed
Licensees
2012/132011/122010/11
• There are certain tariff elements that are common
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NERSA vs. Municipal Tariffs
UNITS
Energy Component Peak 12 300 000
Standard 30 000 000
Off-Peak 37 800 000
Demand Component 121 000
Network Access Charge 165 000
Total 80 386 000
11kV User Profile for full 2011/12 year
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NERSA vs. Municipal Tariffs
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NERSA vs. Municipal Tariffs
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NERSA vs. Municipal Tariffs
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NERSA vs. Municipal Tariffs
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NERSA vs. Municipal Tariffs
NERSA vs. Municipal Tariffs
• The published tariff booklets for municipalities are inline with NERSA approved tariffs. The true reflection of what is actually being charged is however often understated due to non-standard charges.
• NERSA account for the categories of an energy charge, an energy demand charge and a fixed charge. They do not take into account any additional levies or surcharges that municipalities charge.
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Municipal margins
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Margin change YoYBu
ffalo
City
City
of C
ape
Tow
n
City
of T
shw
ane
City
Of U
mhl
athu
ze
City
Pow
er
Ekur
hule
ni
Emfu
leni
eThe
kwin
i
Nel
son
Man
dela
Bay
Tlok
we
3% 2%
4%
9%
5%4%
5%6%
7%
0%
11 kV, 22kV, 33kV, 44kV, 66kV ≤ 300km Time of UseYoY % change Aggregate municipal published active energy charge
above / below Eskom Megaflex
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Municipal margins
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Margin change YoYB
uff
alo
Cit
y
Cit
y o
f C
ap
e T
ow
n
Cit
y o
f T
shw
an
e
Cit
y O
f U
mh
lath
uze
Cit
y P
ow
er
Ek
urh
ule
ni
Em
fule
ni
eT
he
kw
ini
Ne
lso
n M
an
de
la B
ay
Tlo
kw
e
-20%
-25%
-11%
0%
14%
-10%
8%
-40%
6%
0%
11 kV, 22kV, 33kV, 44kV, 66kV ≤ 300km Time of UseYoY % change Aggregate municipal published energy demand charge
above / below Eskom Megaflex
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Sustainability
• Municipalities tariffs are not conducive to the competitiveness of industrial customers.
• While margins are highest for demand charges and are still considered the driver of consumer behaviour, some municipalities are realising that their current margins on energy demand is not sustainable.
• The YoY percentage change indicates for the period July 2011 till June 2012, in terms of percentage increases/decreases, the energy purchase cost actually increased while demand costs declined in relative terms.
• There is thus clear indication that a trend exists towards pacing a higher emphasis on energy cost.
Conclusions
1. Municipal tariffs are not sustainable. i. There is an indication that there is a shift towards
placing a stronger weight on energy for electricity purchased going forwards.
ii. Municipal tariffs are still increasing above that of Eskom but the rate of the increases is slowing. Consensus must be achieved on determining a fair mark-up between municipalities and their customers.
iii. Municipalities are padding tariffs with non standard charges.
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Conclusions
• There are differences in accounting calculations between NERSA and the municipalities. The regulation of the catch all categories of energy, demand and fixed charges is insufficient and does not provide a true reflection of the supplementary charges being imposed by the municipalities.