How Ekurhuleni under-charged Tembisa for electricity
Ekurhuleni mayor Nkosindiphile Xhakaza is expected to present a report to council on Thursday about the suspension of certain fixed charges for electricity. But the mess might be bigger than the city's communications indicate.
Xhakaza recently suspended the fixed charge of R109.78 (excluding Vat) for specifically single-phase non-indigent households (A2 tariffs) following violent protest in Tembisa, where residents were furious about the charge.
This was already an 54% increase compared with the previous year.
The suspension was meant to:
Enable comprehensive, inclusive and orderly engagement with affected communities.
Ensure that legitimate concerns raised by residents were systematically and effectively addressed.
Mitigate the risk of recurrence of destructive and violent events such as those experienced in Tembisa during 2022.
In a press release issued on 22 July, Xhakaza explains at great length that Ekurhuleni is compelled by the energy regulator Nersa to levy fixed charges 'aimed at ensuring adequate investment in infrastructure maintenance, long-term sustainability of electricity supply and equitable distribution of operational costs across all communities.'
He further emphasises that the charges are informed by a cost-of-supply (CoS) study.
ALSO READ: Traffic delays after residents shut down Thembisa over electricity tariff hike [VIDEO]
What Xhakaza failed to admit, is that the only fixed charge Ekurhuleni could lawfully have implemented is much higher, at R142.51 and that these consumers are not the only ones who are lawfully required to pay considerably more than the amount implemented.
To complicate matters further, on 1 July Ekurhuleni implemented the higher tariffs Nersa approved. After a storm of protest from councillors who relied on the numbers they approved with the budget, the city 'corrected its mistake' and reverted to the lower council-approved tariffs a day later.
The amounts in the budget, which are currently implemented, and those Ekurhuleni asked Nersa to approve, differ substantially regarding residential customers in terms of fixed charges as well as the unit cost.
ALSO READ: Ekurhuleni mayor to suspend electricity tariff hike after protests in Thembisa
Nersa approved exactly what Ekurhuleni applied for.
Schedule F – approved by council
A2 Residential – non-indigent
Nersa approved:
Source: Nersa.org.za
A resident of Ekurhuleni with a single-phase connection that is on this tariff, currently pays R627 (excluding Vat) if he uses 200 kWh/m according to the council-approved tariffs, while the tariffs approved by Nersa would have resulted in a bill of R708.25 for the same amount of electricity.
The difference is more than 12% for single-phase customers. Those with a three-phase connection using the same amount of electricity would see an even bigger difference of 15%.
That means Ekurhuleni added a considerable mark-up to the tariffs it consulted the public on and approved in council. Whether it was a mistake or a deliberate effort to mislead council and consumers about the extent of the increase, is not clear.
ALSO READ: Experts warn of unintended consequences of giving in to Thembisa demands
Moneyweb tried to engage the city about the matter, but was told by a spokesperson that the electricity tariffs are expected to be discussed in council on Thursday.
Following Xhakaza's statement that the tariffs are based on a CoS study, the question arises how the city then arrived at two different sets of tariffs and if the council-approved tariffs that he quoted are indeed cost-based, why it would submit higher tariffs to Nersa that would result in an over-recovery. Further, did Nersa interrogate how the city arrived at the numbers?
Electricity pricing expert Deon Conradie confirms that Ekurhuleni is not permitted to implement a different charge than was approved by Nersa, unless it goes back and applies for a change in the approved rates.
He is of the opinion that the council as implementor can decide not to implement the tariff charge and take the loss of income on the chin, or stop the implementation temporarily until they have received approval from Nersa to change the tariff.
How big that loss will be, is not clear at this stage. In the statement announcing the suspension, the city however states that the decision was taken after 'assessment of potential risks.'
Several sources told Moneyweb they are trying to engage Nersa on the matter. Moneyweb sent questions to Nersa on 8 July, but has not received a response, despite several efforts to follow up on the enquiry.
Nersa for the first time this year published both the tariff applications it received from municipalities as well as the approved tariffs. Conradie advises consumers in all municipalities to check these tariffs against those approved by council to make sure there are no discrepancies.
This article was republished from Moneyweb. Read the original here.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
IOL News
2 days ago
- IOL News
Court ruling sinks South Africa's R200 billion Karpowership deal
The Pretoria High Court has set aside three electricity generation licences issued to Karpowership Image: Supplied The Pretoria High Court has set aside three electricity generation licences issued to Karpowership by the National Energy Regulator of South Africa (Nersa). The decision follows a legal challenge by the Organisation Undoing Tax Abuse (OUTA), which questioned the lawfulness and transparency of the licensing process. "The licences were issued by the National Energy Regulator of South Africa (Nersa), and were a crucial step in the government's plan to sign 20-year deals with the floating power stations as 'emergency' electricity,". OUTA said. "The deals were expected to have cost about R200 billion over the 20 years, an amount that would have been added to the price of electricity". The court order said 'decision of the first respondent [Nersa] to award a generation licence to the second respondent [Karpowership]' was 'reviewed and set aside', for each of the three generation licences. The generation licences were issued in 2021 under the Risk Mitigation Independent Power Producer Procurement Programme (RMIPPPP), aimed at urgently addressing South Africa's electricity shortfall. According to OUTA, the court case played a major role in unravelling the Karpowership deals, particularly after Eskom eventually declined to grant grid access to the project. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Next Stay Close ✕ Last year, Minister of Electricity Kgosientsho Ramokgopa had also confirmed the Karpowership projects missed important deadlines and would not go ahead as planned. However, despite this, the organisation continued to call for unequivocal confirmation that the deal had been permanently shelved. In a statement issued to the media on Thursday, OUTA said that the victory represents a significant win for the public. 'The Karpowership deals are now absolutely dead. It will never be loaded onto your electricity bill,' Advocate Stefanie Fick, Executive Director of OUTA, said. 'This ruling is a powerful affirmation that decisions involving billions in public funds must comply with the law. We challenged this process because the public deserves transparency, proper oversight, and value for money, none of which were present in this licensing saga.' IOL News Get your news on the go, click here to join the IOL News WhatsApp channel.
The Citizen
2 days ago
- The Citizen
Homeowners caught in solar registration grey zone
While City Power encourages voluntary solar registration, homeowners remain confused as Eskom and municipalities apply different rules. There is still uncertainty surrounding registration of home solar systems, with either Eskom or municipalities, as Johannesburg's City Power confirms its meter readers are scouting for the locations of such systems. Randpark residents said this week that meter readers had been asking about solar power systems and had been seen photographing rooftop solar panels on houses. City Power begins checking solar systems City Power spokesperson Isaac Mangena said City Power was in the process of registering small-scale embedded generation systems such as rooftop solar photo-voltaic installations. 'While registration is not yet being enforced, customers are strongly encouraged to begin the process voluntarily to ensure compliance with National Energy Regulator of SA (Nersa) regulations,' he said. Mangena said meter readers visiting households were conducting standard meter audits that may include noting the presence of rooftop solar panels or related infrastructure. 'This is part of routine data collection,' he said. Mangena said City Power was developing measures to identify unregistered systems in the future, including the possible use of satellite and drone-based detection, he said. 'There is currently no official or forced registration drive underway,' he said. An off-grid does not have a connection that ties the generator to the Eskom electricity distribution network. This type of configuration does not need authorisation from Eskom or Nersa registration. Information and graphics: Eskom 'Grid safety' Mangena said Nersa's licensing threshold was 100kVA, which means systems below this capacity are exempt from requiring a generation licence. However, this does not exempt them from the obligation to register with the distributor, in this case, City Power. 'The focus on smaller suburban setups is aligned with national guidelines and City Power's obligation to maintain grid safety, stability and visibility of all systems connected to its network. ALSO READ: South Africa gets R8.4 billion loan to help fix and improve its energy sector 'Even small systems can pose risks such as back feeding, phase imbalances or grid disturbances if not registered and properly integrated,' he said. Mangena said about 1 100 systems have been voluntarily registered. 'City Power is working to simplify the process. Registration requires customers to submit documentation, including a certificate of compliance, single-line diagram and a completed electricity supply application form. 'Once the installation is inspected and approved, the customer may qualify for a smart bi-directional meter, which will allow for both consumption and feedback tracking,' he said. Generation systems already connected to the grid can take advantage of battery storage. This means being able to store solar energy generated during the day and using it at night. Information and graphics: Eskom Eskom and City Power have different registration routes Eskom launched a campaign in April to help residential owners of small-scale embedded generation systems, including photovoltaic installation systems, comply with the National Energy Regulator of South Africa (Nersa) regulations. These regulations require all owners in Eskom-supplied areas to register with Eskom. Eskom has, however, referred owners of solar systems in non-Eskom-supplied areas to their local municipality. Eskom's registration demands rejected While Organisation Undoing Tax Abuse (Outa) CEO Wayne Duvenhage said Outa would challenge Eskom's decision, AfriForum has added fuel to the fire and maintained that Eskom's registration requirements for grid-tied solar power systems have no legal basis. AfriForum local government affairs manager Morné Mostert said Eskom could not threaten or force people to register their systems through statutory requirements, nor fine them. Mostert added that Eskom wants its hands on people's data – potentially for solar tariffs in the future. AfriForum advisor for local government affairs Deidrè Steffens said what frustrates people is that Eskom's underperformance over the past few years has forced people to install solar panels, especially industries and farmers, who had to do it for survival. ALSO READ: Are municipalities failing — or are residents just unable to pay? Why many are turning to off-grid living In this generator network configuration, any surplus generated energy may be exported into the type of grid-tied generator connection requires Eskom authorisation and registration with Eskom or Nersa. Information and graphics: Eskom Concerns over high costs and engineer bottlenecks 'It has already cost them a lot of money. Now they will have to pay an extra R20 000 to R50 000 for the engineer's certificate,' she said. Steffens said it didn't make sense for an engineer to inspect a small solar system, adding that Eskom's requirement that small-scale embedded generation systems customers get an electrical engineer registered with the Engineering Council of SA to sign off on the system was not a prescribed requirement. 'The enforceable National Rational Standards say nothing about the requirement for engineer sign-off; it primarily speaks of an accredited technician who must sign off on the system.' Steffens warned that it could create a bottleneck because only a handful of electrical engineers are available across the country to inspect installations. She said the requirement would cause a big bottleneck in registrations. More confusion as municipalities apply own rules Association for Renewable Energy Practitioners president Carel Ballack said each municipality has its own rules. 'There are 177 municipalities that can sell power. Eskom is just one of the utilities that have its own rules for connection,' he said. Ballack said it depended on the municipality and on how thoroughly an installation has been done. 'If you were to register through Eskom, that will be about R2 500 for the administration fee and then Eskom will send someone to look at the infrastructure. They'll probably change the meter. That's R6 000 and upwards. 'Then you must have other compliances in place. If you don't have an engineer sign-off, that can set you back R4 500 for the line diagrams and sign-off.' NOW READ: Identifying the bugs in SA's long-promised infrastructure boom
The Citizen
2 days ago
- The Citizen
What Eskom's solar registration campaign means
Eskom and City Power insist solar registration is vital for protecting infrastructure and planning the country's future energy mix. In its campaign to get households to register their solar systems, Eskom emphasises that 'unauthorised grid-tied generators can endanger the lives of operating staff, the environment, equipment and the quality of electricity supply'. Association for Renewable Energy Practitioners president Carel Ballack said the registration was a safety function. 'If the municipality shuts down power in the area to maintain the electrical infrastructure, they needed to know whether there was a chance that a generator [tied to the grid] would start up somewhere and the changeover switch wouldn't function and the generator would push power back to the municipal supply line,' he said. Ballack said regulator Nersa utilised generation capacity to determine the energy mix for the power supply going forward. 'They use the growth of solar to determine how the mix is going to affect all the other sources they have,' he said. Nersa's data supports energy planning, not taxation – yet 'We would be able to argue that we could use that data to apply taxes,' Ballack said. 'But to understand that, you would have to look at different municipalities and that each municipal region had its own rates and those rates had to be approved by Nersa. Nersa is not necessarily the entity that would be taxing users for using the electrical infrastructure,' he said. ALSO READ: South Africa gets R8.4 billion loan to help fix and improve its energy sector Ballack said the issue was that electricity has become a human right. 'You have at the bottom of the income chain those who are getting electricity for free because it is a human right, while Eskom has to maintain the infrastructure for the portion,' he said. 'There's a percentage of the population that doesn't pay for electricity at all and the issue is that those who can pay are being burdened to pay for those who can't.' Proper registration stressed City Power spokesperson Isaac Mangena said the organisation had an 'obligation to maintain grid safety, stability and visibility of all systems connected to its network'. 'Even small systems can pose risks such as back feeding, phase imbalances, or grid disturbances if not registered and properly integrated,' he said. Mangena said registration ensured technical compliance and protects both customers and infrastructure. He said everyone with solar – regardless of size – had to register. 'All customers with solar PV systems connected to City Power's grid are required to register their systems, regardless of the size or capacity,' he said. ALSO READ: City Power denies claims its headquarters raided by Hawks 'This applies to grid-tied and hybrid systems. The registration process allows City Power to assess technical specifications, ensure the installation meets safety and regulatory standards and avoid potential risks to the grid. 'Even if a system does not export energy back to the grid, registration is still required to ensure full visibility of energy generation within the network.' Mangena said City Power will not provide bi-directional meters at no charge and customers will be responsible for the cost of the meter and its installation. These would enable customers who had spare generation capacity to feed back into the grid – and be paid for it. Implementation timelines Mangena said the procurement of a service provider to implement the feed-in tariff incentive is still underway, and would take four to six months once the service provider is appointed, after which further implementation timelines will be communicated. City of Tshwane spokesperson Selby Bokaba said: 'Customers who are not interested in back-feeding energy into the grid are still required to register their systems with the municipality by completing the relevant application forms. 'Although the city encourages customers to feed excess energy into the grid, only customers with installed bi-directional meters can export excess energy into the city's grid.' NOW READ: Ekurhuleni mayor to suspend electricity tariff hike after protests in Thembisa
