Tag: electricity

By Jamie McKane for MyBroadband

Eskom’s proposed electricity tariff changes could see the electricity bill of average South Africans skyrocket, according to energy expert Ted Blom.

Eskom itself has rebutted these projections, however, stating that while certain customers may pay more and others less, the change will not lead to an increase in its revenue.

The power utility plans to reduce the electricity tariff for the peak winter months and hike tariffs for electricity usage during its summer period.

It has also said it wants to replace the inclining block rate tariff system with a new system that charges fixed network costs regardless of usage and separate electricity usage costs.

The inclining block rate system currently means that South African households that use more electricity pay more per kWh than those which use a lower amount of electricity every month.

Removing this would mean that all households would pay the same per kWh of electricity usage, regardless of how much they use each month.

Potential for massive bill shock – Ted Blom
Eskom has said these proposed tariff changes are being implemented to bring the prices consumers pay for electricity in line with the efficient cost of producing power.

Blom, however, has warned that those who do not use much electricity every month may see a significant increase in their monthly electricity bill.

This is because while Eskom has said it will reduce winter tariffs, it only charges these tariffs for three months of the year. During the rest of the year, it charges summer season tariffs, which it has said it plans to hike.

Blom says that depending on how much these tariffs are altered, this may result in a net increase in consumer electricity bills per year.

Additionally, the introduction of a fixed network cost could see those who use relatively little electricity paying much more than they currently do, Blom said.

This is because they will be required to pay fixed monthly costs for being connected to the electricity grid, and this charge will be incurred no matter how much they try to save on electricity usage.

These changes will be most felt by households that use electricity sparingly, Blom said.

Speaking to eNCA, Blom said households that cannot afford to buy a lot of electricity will face a heavy burden if Eskom goes through with these changes.

“Eskom hasn’t provided the exact breakdown, but as an example – on the first 300kWh of electricity, where you used to pay R1.29 you could now pay closer to R2, and that will double the average person’s electricity bill,” he said.

Some customers might pay more or less – Eskom
Speaking to eNCA following Blom’s statements, Eskom electricity pricing specialist Shirley Salvodi said that the changes to the summer and winter tariffs would be revenue-neutral for Eskom.

“The sum of all the changes we are making equals the Nersa-approved revenue requirements,” Salvodi said. “So by slightly reducing the winter rates and increasing the rates for the nine months in the summer, the sum of the two changes is revenue-neutral for Eskom.”

“But some customers might pay more or less, depending on their profile.”

Regarding the inclining block rate tariff changes, Salvodi argued that the projection that some customers will pay double is not strictly correct.

“The statement made that some customers are going to pay double is a bit misleading,” she said. “There are many customers that are actually going to see benefits from the changes we are proposing.”

In response to questions from MyBroadband, Eskom spokesperson Sikonathi Mantshantsha elaborated on Salvodi’s previous statements.

“The proposed change to our tariffs structure, reducing the three winter months and increasing the nine summer months, is calculated in such a way that the same amount of revenue will be received by Eskom,” he said.

“Eskom will not be earning any additional revenue from this change, and all of the changes must be approved by regulator NERSA.”

Removing the inclining block tariffs and the reasons are clearly spelt out in the power utility’s submission, Mantshantsha said.

“I encourage customers and Mr Ted Blom to read the document, understand the numbers and use the models Eskom has provided on our website.”

Mantshantsha added that customers who do not use a lot of electricity will not be required to pay these fixed charges.

“A point to note is that Eskom is not proposing to introduce fixed charges for low consumption customers, so there is always this tariff option available for these customers,” he said.

Soweto blames non-payment on 1992 accord

Source: 702

Soweto residents have embarked on a protest over electricity cuts by Eskom. The residents blockaded roads and set fire to tyres on Monday morning, causing traffic delays in the area.

The power utility cut off power in Soweto after the municipalities failed to settle their debts. Eskom says it is owed more than R18-billion by the residents.

Soweto residents’ representative King Sibiya says they need a breakdown of the debt from Eskom.

“This is the question we are asking Eskom – if they say we are owing R18-billion, can they Eskom break it down for us?” he said on Twitter.
“Firstly in Soweto, we have plus-minus six malls which are using electricity more than anything, we also have Baragwanath Hospital which is a national hospital, police stations etc.”

Sibiya says they requested a meeting with Eskom but the power utility told them they need the debts to be paid.

Later Eskom conducted an audit on certain parts of the area.

“What we are being charged are estimations, Eskom doesn’t come to our houses and conduct meter readings,” says Sibiya. “In 1992 we signed an accord that the people of Soweto will pay a flat rate of R33.80.”

Meanwhile, Eskom senior manager of customer services in Gauteng Daphne Mokwena says they are not targetting Soweto in particular, but rather residents that are not paying for electricity.

“We are not privy to the 1992 document they are talking about. We have requested via our legal representatives to see the documents but we are still waiting for it. If I haven’t seen it, it does not exist,” she stated.

Responding to meter reading statement, Mokwena says they have been chased out of Soweto when their technicians go there.

She adds when that happens they use the previous meter reading to estimate the following bill.

Source: Fin24

Following the breakdown of some of its power generation units over the weekend, the electricity system will remain “severely constrained” until at least Thursday, Eskom said.

In an update after at midday on Tuesday, Eskom said that these unplanned breakdowns, along with planned maintenance, meant that more than 12 500MW in power generation was offline by Monday evening.

Anything above 9 500MW means that Eskom has to resort to emergency power generation: open cycle gas turbines and pumped storage hydro electrical plants. These are very expensive ways of generating power, particularly gas turbines as they require large quantities of diesel. They can only be used for short periods before diesel and water reserves run out.

By Tuesday morning, the situation had improved to 11 500MW of capacity being offline.

“With the expected return to service of several units today and tomorrow, and with current diesel reserves, the probability of load shedding remain low for the week, but the system remains constraint until at least Thursday,” Eskom said in a statement.

It said that any additional unplanned breakdowns, or shortage of diesel and pumped storage, could result in load shedding at short notice.

Last month, South Africans suffered five days of load shedding after outages at five units. Eskom also resorted to emergency power generation, but then its diesel stocks started running low, which forced it to shed power.

Now Eskom is selling electricity to Zambia

By David McKay for Mining Mx

Zambia is to import 300MW of electricity from Eskom, the South African power utility, for six months in order to ease shortages, said Reuters.

Citing Webster Musonda, MD of Zambia’s electricity company, Zesco, Reuters said imports would begin on 1 October and would cost about $22m per month. “The negotiations have been concluded and we have an offer on the table. We will spread the cost of importing this power to our customers,” says Musonda.

Africa’s second largest copper producer, Zambia has a power deficit of more than 750MW because of low water levels at hydropower dams, said Reuters. Zambia last week announced it would increase the hours for power rationing as water levels continued to fall.

Zambia has historically priced electricity below the cost of production through subsidies. Only in recent years has the country started to gradually raise prices.

In 2017, the country’s energy regulator approved a 75% price hike for electricity retail consumers and introduced a flat 9.30 US cents per kilowatt hour tariff for mining companies, said Reuters.

Zambia’s president, Edgar Lungu, said in June the country was not slipping into a sovereign debt crisis. “Zambia is not in a position of a crisis,” he told Bloomberg News. “When you find that you are being strangled by debt, you hold back and see how you can realign your position so that in the end you continue being alive, you don’t suffocate.

“That’s where we are now,” he said.

According to the International Monetary Fund, Zambia is growing at the slowest pace in two decades. A drought has lowered water levels at hydroelectric dams whilst earnings from copper – its main export – have slumped following a decline in metal pricing.

City Power hit by virus

Johannesburg residents using pre-paid electricity have been left in the dark after a computer virus hit City Power, rendering users unable to purchase electricity.

The utility’s spokesperson, Isaac Mangena, was cited on News24 as saying “the virus had attacked its database and other software, impacting on most of its applications and networks”.

This resulted in City Power customers being unable to upload pre-paid electricity to their meter boxes.

The City Power website is also affected by the virus.

Mangena also stated that City Power hoped to have resolved the problem by midday on Thursday.

By Jenni Evans for News24

Johannesburg mayor Herman Mashaba is seeking an urgent meeting with the Eskom board over the power utility’s declaration that it will no longer do repairs in places illegally connected to the power grid.

This follows a meeting between Mashaba and Eskom officials on Monday to deal with complaints by Soweto residents about illegal electricity connections, vandalised infrastructure and extended blackouts.

“Due to the complex nature of the issues discussed between myself and the Eskom team, during a meeting at Megawatt Park, it was decided that it would be prudent to include the Eskom board in our deliberations,” said Mashaba in a statement.

“I have therefore requested an urgent meeting with the board of Eskom and its shareholder within the next 24 hours. The team at Eskom has indeed committed to ensuring this does take place.”

Mashaba felt it was important for the city and Eskom to work together to find solutions to issues faced by Sowetans and other residents affected by ongoing blackouts arising from Eksom’s credit management processes.

Last week Eskom threatened that it will not repair infrastructure in areas where there are illegal connections or the safety of staff cannot be guaranteed.

“Eskom will only restore supply to legal and paying customers in the areas, on condition that the community allows safe access to Eskom staff to conduct audits and remove illegal connections,” the statement said.

It was previously reported that Soweto has been ranked as one of the top defaulters in the country, where residents owe Eskom more than R17bn.

Mashaba said last week after Eskom’s warning that he felt compelled to intervene on behalf of residents who will be affected by the actions of a few.

South African consumers will experience their first price drop at the pumps in six months as the price of fuel decreases by nearly a rand today.

Petrol 95 will fall by 95 cents a litre and 93 octane by 96 cents, while diesel (0.05% sulphur) will decrease by 74 cents and diesel (0.005% sulphur) by 75 c/l.

However, analysts are pointing out that consumers will have little to celebrate as electricity tariffs hikes kicked in on 1 July.

Despite the fact that the average car will cos R30 to R40 less to fill, consumers are unlikely to achieve much relief.

  • Bus and taxi fares are unlikely to go down
  • Electricity tariffs are increasing
  • The petrol price decrease only accounts for about R2.50 for every R1 000 people have

Source: eNCA

In February, the Soweto debt was sitting at R17-billion in unpaid electricity bills.

Eskom spokesperson, Dikatso Mothae said the power utility “continues with initiatives to improve revenue recovery from residential customers”.

These include removing illegal connections, conducting meter audits, repairing faulty or tampered meters and limiting ghost vending of prepaid electricity, installing smart and/or prepaid meters within protective enclosures to prevent tampering, converting customers from post-paid to prepaid and stepping up disconnection of customers not honouring their current accounts

In his State of the Nation Address last week, President Cyril Ramaphosa announced that the ailing Eskom will continue to received further bailouts.

He said the government has a strategy to deal with Eskom defaulting on its loans.

“We will, therefore, table a Special Appropriation Bill on an urgent basis to allocate a significant portion of the R230-billion fiscal support that Eskom will require over the next 10 years in the early years,” Ramaphosa said.

The president also said that Eskom is working hard to recover money owed by municipalities and customers.

Additionally, he said that “the days of boycotting electricity payments are over”.

Meanwhile, according to Mothae, municipal debt is sitting at R20-billion as at the end of March 2019.

“We continue to have discussions with Municipalities, Provincial Government and National Government and the Inter-Ministerial Task Team to find a resolution. We are continuously reviewing Payment Arrangements with municipalities, issuing default letters and then as a last resort we start a PAJA [Promotion of Administrative Justice Act] process when they default which leads to planned power interruptions,” she said.

“However, we normally get interdicted by customers or customer groupings preventing us from interrupting electricity supply and Municipalities typically take payment holiday during these interdicts. Eskom has now started to issue summons to municipalities for the amount in the Acknowledgement of Debt,” Mothae added.

Earlier this year, the Orlando Action Committee said it was willing to negotiate with the President Cyril Ramaphosa on electricity payment.

The Sunday World reported that Gauteng townships have become “a nightmare” for Eskom employees, who are often “intimidated and assaulted when working in these areas”.

By Sifiso Zulu for EWN

South Africans are looking to President Cyril Ramaphosa for answers after the latest round of load shedding; the most severe to hit the country.

Eskom says it had no choice but to implement stage 4 load shedding on Monday after an urgent need to shed 4,000 megawatts off the grid.

Stage 4 load shedding has never been implemented before, and this drastic measure by Eskom took the country by surprise.

But it appears that even President Ramaphosa was not expecting the latest development, saying it came as a shock and was most worrying.

Energy expert Chris Yelland agrees that this move was unprecedented and speaks to how dire the situation is at the debt-ridden power utility.

“This is uncharted territory. So, it’s much deeper than it’s ever been before, and it did come as a surprise because it was announced that six generation units shut down as a result of unplanned outages.”

Ramaphosa recently announced plans to unbundle Eskom into three entities to deal with generation, transmission and distribution.

Labour unions have vowed to fight the plan, arguing that it’s the onset of privatising Eskom.

Eskom expects to report record R15bn loss

By Paul Burkhardt, Bloomberg/Fin24

Eskom, South Africa’s struggling power utility, expects to report a loss of more than R15 billion in the year to March 31, a record for any state company.

The anticipated loss, revealed by Chief Financial Officer Calib Cassim at a tariff application hearing in Cape Town on Monday, will exacerbate Eskom’s already dire financial position – it is saddled with R419 billion of debt – and increase pressure on the government to help bail it out.

The utility has said its situation is unsustainable and suggested the state take some of its debt onto its own balance sheet, an option not favored by President Cyril Ramaphosa.

Eskom’s loss estimate may be on the conservative side, according to Peter Attard Montalto, the London-based head of capital markets research at Intellidex, a research company.

“We are now expecting a loss closer to R20 billion for the year, despite a reduction in the investment pace,” he said.

The loss of about R15 billion was targeted notwithstanding that Eskom may need to spend more on capital expenditure and maintenance, the utility’s media desk said in an emailed reply to questions.

A turnaround plan is currently being discussed with the government, and will be made public once the process has been concluded, while talks are being held with a number of lenders to secure required funding, it said.

The Department of Public Enterprises, which oversees the utility, didn’t immediately respond to messages seeking comment.

Eskom has proposed that it be allowed to raise tariffs by 15% annually for three years to help it bring its debt under control, but Attard Montalto sees it as unlikely that South Africa’s power regulator will grant its request because it abides by a strict formula when determining how costs should be allowed to feed into prices.

“With Eskom likely to get a lower award than asked for, it is likely to run a significant loss in the next fiscal year as well,” he said.

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