Mayoral letter 6 – April 2021

Die konsep begroting vir die 2021/22 finansiële jaar is verlede week ter tafel gelê en het die nuwe tariewe vir elektrisiteit ingesluit. Ek verduidelik hieronder hoe hierdie tariewe bepaal word.

Nersa (“National Energy Regulator of South Africa”) bepaal die verhoging van elektrisiteitspryse wat Eskom aan verbruikers mag deurgee. Die prys waarteen elektrisiteit aan Munisipaliteite (“Muns”) verkoop styg met 17,8%. ‘n Formule word deur Nersa gebruik om die prysstyging wat Muns aan verbruikers kan deurgee, te bepaal. Bedrae vir onderhoud, salarisse en die netto toelaatbare marges op elektrisiteit word in hierdie jaar se verkoopsprys-styging van 14,59% ingereken.

Eskom verskaf dus elektrisiteit aan Muns teen die grootmaat-prys. Muns is dan verantwoordelik om hul eie verspreidingsnetwerk en substasies in stand te hou om hulle huishoudelike- en besigheids- verbruikers van krag te verskaf. Die kostes om elektrisiteit te versprei sluit onder andere die volgende in: onderhoud op kraglyne, transformators, substasies, onderhoudspanne, waardevermindering op toerusting, asook die interne gebruik van krag (vir pompstasies, straatligte, geboue) en behels ongeveer 30% van die totale aankope.

Daar is verskillende tariewe waarteen Eskom krag aan Muns verkoop afhangende van “piek” of “nie-piek” tye vir “winter” en “somer”. Die totale bedrag vir aankope vir die jaar is dus die kilowatt-ure teen die verskillende tariewe. Die Muns moet gevolglik daagliks statistiek hou van hulle aankope en verkope teenoor die verskillende tariewe en wie die verbruikers is.
Om die verkoopspryse te bepaal moet elke Mun die verbruikspatroon ontleed. Nywerhede word teen “time of use” tariewe gehef; “piek”-tariewe is dus baie duurder as ander tye. Die tarief vir verkope aan huishoudings word teen ‘n gemiddelde prys vir die jaar bepaal wat laer is as die hoë “winter-piek” pryse (maw die Mun verkoop teen ‘n verlies) maar wat ook die laer “somer”- en “nie-piek” tye in ag neem.

Ons Mun gebruik tans (2020/21) nog ‘n eenmalige tarief van 206,4 sent per kilowatt-uur sonder BTW (237,3 sent BTW ingesluit) vir alle verkope aan huishoudelike verbruikers (deernis-gevalle betaal minder vir ‘n getal eenhede). Sommige van ons naburige Muns het alreeds ‘n basiese beskikbaarheids-heffing begin toepas waar huishoudings ‘n bedrag van byvoorbeeld R50 (of R100) per maand betaal voordat hulle kilowatt-uur eenhede aankoop. Die aanvanklike blok eenhede wat aangekoop word sal dan goedkoper wees as die eenmalige tarief wat George hef maar daarna styg die tarief soos addisionele blokke aangekoop word. Hierdie stelsel word ook die “inclining block tariff” stelsel genoem. George moet nog die besluit neem of die laasgenoemde stelsel in die toekoms ingestel gaan word.

Die verkope van elektrisitiet vir 2021/22 word op R875m beraam (teenoor aankope van R616m) wat 54% van George se inkomste uit kerndienste en belasting verteenwoordig. Hierdie inkomstebron is dus uiters belangrik vir ons hele samelewing.

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The draft budget for the 2021/22 financial year was tabled last week and included the new tariffs for electricity. The Executive Mayor Leon Van Wyk, explains below how these rates are determined.

Nersa (National Energy Regulator of South Africa) stipulates the increase in electricity prices that Eskom may pass on to consumers. The price at which electricity is sold to Municipalities (“Muns”) increases by 17.8%. A formula is used by Nersa to determine the price increase that Muns can pass on to consumers. Amounts for maintenance, salaries and the net allowable margins on electricity are included in this year’s sales price increase of 14.59%.

Eskom therefore supplies electricity to Muns at the bulk price. Muns is then responsible for maintaining their own distribution network and substations to power their domestic and business consumers. The costs of distributing electricity include the following: maintenance on power lines, transformers, substations, maintenance teams, depreciation on equipment, as well as the internal use of power (for pump stations, street lights, buildings) and comprises approximately 30% of total purchases .

There are different rates at which Eskom sells power to Muns depending on “peak” or “non-peak” times for “winter” and “summer”. The total amount for purchases for the year is therefore the kilowatt hours at the different rates. The Muns must therefore keep daily statistics of their purchases and sales against the different tariffs and who the consumers are.

To determine the selling prices, each Mun must analyse the consumption pattern. Industries are charged at time of use rates; “Peak” rates are therefore much more expensive than other times. The tariff for sales to households is determined at an average price for the year which is lower than the high “winter-peak” prices (ie the Mun sells at a loss) but which also includes the lower “summer” – and “not peak ”times.

Our Mun currently uses (2020/21) another one-off rate of 206.4 cents per kilowatt hour without VAT (237.3 cents VAT included) for all sales to domestic consumers (indigent consumers pay less for a number of units). Some of our neighbouring Muns have already started applying a basic availability levy where households pay an amount of, for example, R50 (or R100) per month before purchasing kilowatt-hour units. The initial block of units purchased will then be cheaper than the one-time rate charged by George but thereafter the rate will increase as additional blocks are purchased. This system is also called the “inclining block tariff” system. George has yet to decide whether the latter system will be introduced in the future.

Sales of electricity for 2021/22 are estimated at R875m (compared to purchases of R616m) which represents 54% of George’s revenue from core services and taxes. This source of income is therefore extremely important for our entire society.