THE 2010/11 TARIFF ADJUSTMENT. Standard schedule of Tariffs

Transcription

1 THE TARIFF ADJUSTMENT Standard schedule of Tariffs

2 Scenario Modelling Tool (SMT) Tariff options Only change is to the residential Standard ' options - Urban Rural Residential Megaflex Ruraflex Inclining block tariff Miniflex Businessrate Nightsave rural Landrate Public lighting Nightsave Urban (Large) Nightsave Urban (Small)

3 Scenario Modelling Tool (SMT) Tariff options Tariff options for different electricity usage needs

4 Scenario Modelling Tool (SMT) The NERSA MYPD 2 Decision The NERSA approved a R billion Eskom revenue requirement to be recovered from standard during that is: A 24% annual average increase on both Local Authority and Non-Local Authority. Local Authority and Non-Local Authority have the same structure but different prices due to different implementation dates; 1 April Non-Local Authority and 1 July for Local Authority. Tariffs ensure that Eskom recovers the allowed revenues by Nersa. Standard Total standard Local Authority Non-Local Authority Annual electriicty sales (GWh) 204,551 92, ,680 Annual average c/kwh price for Annual average c/kwh price in Annual average increase 23.9% 24.0% 23.8% Annual revenues (Rmillion) 85,180 36,632 48,548

5 Scenario Modelling Tool (SMT) The Tariff charges to recover the approved revenue requirement The allowed recovery R billion from standard includes R4.569 billion for the environmental levy on non-renewable generation. R4.084 billion of the levy is recovered as an explicit 2c/kWh environmental levy charge. Standard tariff revenues (Rm.) Total standard Local Authority Non-Local Authority Total average c/kwh price during Total electricty sales (GWh) 204,551 92, ,680 Total 85,180 36,632 48,548 Explicit 2/kWh environ. levy charge 4,084 1,850 2,234 Other charges 81,096 34,782 46,314 Energy, network and retail charges 80,521 34,467 46,053 Embedded environmental levy

6 Lower price increases on the tariff book charges The increase to the customers rates in the tariff book is lower than 23.9%. This is because the tariff book that is to be adjusted for is at a higher price level than the annual average price (starting point) as approved by the NERSA. Including total levy Excluding 2c/kWh levy charge

7 Scenario Modelling Tool (SMT) Implementation of the NERSA Decision Lower increase on the prevailing tariff book as its rates (starting point) are higher than the NERSA approved annual average c/kWh 23.9% year-on-year change 35.09c/kWh 19.8% Tariff book adjustment FY 41.6c/kWh average on 204,551GWh Norminal price level c/kWh April to June Increase for +31.3% effective 1 July 2009 July to March FY 33.6c/kWh average on 193,100GWh Prevailing Tariff book on 204,551GWh April to March

8 Lower price increases on the tariff book charges Non-Local Authority 23.9% annual average Non-Local Authority increase. 17.9% on the prevailing (including the levy charge). Including the 2c/kWh levy charge Non-Local Authority (including environmental levy charge) c/kWh 23.9% year-on-year change 36.9c/kWh 17.9% Tariff book adjustment FY 43.5c/kWh average on 111,680GWh Norminal price level c/kWh FY 35.1c/kWh average on 105,636GWh Prevailing Tariff book on 111,680GWh April to June Increase for July to March April to March

9 Lower price increases on the tariff book charges Non-Local Authority Excluding the 2c/kWh levy charge Non-Local Authority ( Excluding environmental levy charge) FY 41.5c/kWh average on 111,680GWh Norminal price level c/kWh 35.03c/kWh 23.4% year-on-year change FY 33.6c/kWh average on 105,636GWh 34.9c/kWh 18.7% Tariff book adjustment Prevailing Tariff book on 111,680GWh 20 April to June July to March April to March 23.4% annual average Non-Local Authority increase (excluding the levy charge). 18.7% on the prevailing (excluding the levy charge).

10 Implementation of the inclining block The inclining block tariff replaces the previous Non-Local Authority Homelight and Homepower. The impact of the inclining block tariff are lower electricity prices than in for residential consumption below 350kWh per month. Due to the reduction there is an increase in subsidies to the residential i.e. 4.8% increase on the more intensive electricity users. Lower prices for the first 50kWh and the next 300kWh.

11 Increases on Non-Local Authority with the implementation of the inclining block tariff Excluding the 2c/kWh levy charge Urban 23.5% Tariff book charges increase Rural 18.7% Residential -5.1% Megaflex Ruraflex Inclining block tariff Miniflex Businessrate Nightsave rural Landrate Public lighting Nightsave Urban (Large) Nightsave Urban (Small)

12 Increases on Non-Local Authority with the implementation of the inclining block tariff Price increase % 25% 20% 15% 10% 5% 0% -5% 36.8c/kWh 69.3c/kWh 59.2c/kWh 41.5c/kWh -10% Urban Tariffs Rural Tariffs Residential Tariffs Non-Local Authority Excluding the 2c/kWh environmental levy charge Including the 2c/kWh environmental levy charge 23.5% 18.7% -5.1% 18.7% 22.0% 18.1% -4.9% 17.7% Note: See slide 18 for details

13 Lower price increases on the tariff book charges Local Authority 24% annual average Local Authority increase. 19.8% on the prevailing (including the levy charge). Municipal total Including the 2c/kWh levy charge Local Authority (including environmental levy charge) 40 FY 39.4c/kWh average on 92,871GWh Norminal price level c/kWh 33.8c/kWh 24% year-on-year change FY 31.8c/kWh average on 87,464GWh 32.9c/kWh Prevailing Tariff book on 192,871GWh 19.8% Annual tariff book adjustment 20 April to June Increase for July to March April to March

14 Lower price increases on the tariff book charges Local Authority 23.8% annual average Local Authority increase (excluding the levy charge). 21.3% on the prevailing (excluding the levy charge). Municipal total Excluding the 2c/kWh levy charge Local Authority ( Excluding environmental levy charge) 40 FY 37.5c/kWh average on 92,871GWh Norm inal price level c/kWh 31.1c/kWh 23.8% year-on-year change FY 30.3c/kWh average on 105,636GWh 32.9c/kWh 21.3% Annual tariff book adjustment Prevailing Tariff book on 92,871GWh 20 Increase for April to June July to March April to March

15 Higher price increases on the Local Authority tariff book charges over 9 months 28.9% annual average Non-Local Authority increase (excluding the levy charge). Higher increase due to lower 30.5c/kWh price and need to recover R6.106 billion over 9 months instead of 12 months. The price increase on the other tariff book charges (energy, networks and retail) Local Authority ' adjustment excluding 2c/kWh levy 8.8 Average nominal price c/kwh R7.569billion 0% 31.9 R7.569billion 23.7% % % 21.3% R21.107billion R27.212billion +8.8c/kWh (+R6.106billion) 37.5c/kWh annual average price R34.782billion April to June July to March Annual 87,464GWh on prevailing 92,871GWh on prevailing 92,871GWh on effective

16 Scenario Modelling Tool (SMT) Conclusions Recovery of the NERSA approved revenue requirement and implementation of the inclining block tariff relief for residential to be achieved during. Projected revenue recovery to be affected by change in customer demand for electricity. Anticipate customer demand changes due to: The inclining block tariff implementation with lower than price levels. Higher price increase on the more electricity intensive users. 2011/12 and 2012/13 tariff adjustments to be informed by the aforementioned to mitigate potential issues in actual revenue recovery.

17 Additional detailed slide

18 Details: implementation of the inclining block Non-Local Authority Urban Tariffs Megaflex, Miniflex, Nightsave Large, Public lighting and Businessrate Rural Tariffs Ruraflex, Nightsave Rural and Landrate Residential Tariffs Homelight & Homepower Non-Local Authority Total Electricity sales (GWh) 92,382 10,384 8, ,680 Excluding the 2c/kWh environmental levy charge on prevailing (Rm) 27,541 6,061 5,560 39,162 on prevailing +18.7% increase (Rm) 32,687 7,194 6,599 46,479 after inclining block rates (Rm) 34,007 7,194 5,279 46,479 inclining block rate subsidy (Rm) 1, ,320 0 on prevailing (c/kwh) after inclining block rates (c/kwh) Annual average price increase with inclining block tariff 23.5% 18.7% -5.1% 18.7% Including the 2c/kWh environmental levy charge on prevailing (Rm) 29,388 6,269 5,738 41,396 on prevailing +18.7% increase (Rm) 34,534 7,402 6,777 48,713 after inclining block rates (Rm) 35,854 7,402 5,457 48,713 inclining block rate subsidy (Rm) 1, ,320 0 on prevailing (c/kwh) after inclining block rates (c/kwh) Annual average price increase with inclining block tariff 22.0% 18.1% -4.9% 17.7% Annual average price (c/kwh) - levy at 1.5c/kWh* Annual average price (c/kwh) - levy at 2c/kWh with inclining block rates Annual average price increase 28.8% 26.5% 3.3% 29.7% Note: The environmental levy is at a lower 1.5c/kWh during as there was no levy charge during April to June

19 Increases applied on the tariff book charges Total standard Standard ' adjustment Local Authority Non-Local Authority Electricity sales (GWh) 204,551 92, ,680 Annual revenues after increase (Rm) 85,180 36,632 48,548 2c/kWh levy charge 4,084 1,850 2,234 Other charges (Energy, networks and retail) 81,096 34,782 46,314 Other charges [Energy, networks and retail] average price (c/kwh) Before increase on tariff April to June c/kwh July to March c/kwh After increase i.e. tariff April to June c/kwh July to March c/kwh Average increases applied on the other charges i.e. excluding 2c/kWh levy charge 1 April increase N/A 18.7% 1 July increase 28.9% N/A