Eskom Tariff Hike Earthlife Africa Jhb

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Eskom Tariff Hike - Earthlife Africa Jhb
Here we go... ...again.
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Eskom Tariff Hike - Earthlife Africa Jhb

• Critical Assumptions
• Due to the lack of data in Eskom's submission
  (data some of which Earthlife has made PAIA
  requests for), we've had to make some
  assumptions.
• The 34 nominal increase will not affect Eskom's
  contestable customers, whose tariffs are set
  under separate long-term contracts.
• The 34 nominal increase will be spread equally
  across all other users, including poor users.
• Some energy-intensive users are receiving power
  at or below the cost of generation and/or
  distribution.

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Eskom Tariff Hike - Earthlife Africa Jhb

• Eight Recommendations to NERSA
• 1) That Eskom's long-term funding plan be
  presented to NERSA and the public before tariff
  increases are granted.
• We need to be sure Eskom is making the correct
  financial decisions
• Including correct CAPEX decisions
• Why hasn't Eskom presented MYPD 2 in time for
  the MFMA deadline?

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Eskom Tariff Hike - Earthlife Africa Jhb
Eight Recommendations to NERSA 2) Eskom must
clearly demonstrate increases by tariff type. 3)
That Eskom fully disclose its long-term supply
contracts with energy-intensive users. These
users must bear their fair share (in terms of
cross-subsidisation and revenue) for the
country's electricity supply problems.
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Eskom Tariff Hike - Earthlife Africa Jhb
Note on Following Table It is recognised that
Eskom's costs will differ between categories of
users. However, this information is not in
Eskom's 2008 Annual Report, only the figure of
R0.189/kWh is stated (pg. 4 of Eskom's Annual
Report 2008). If we take the 2008 operating costs
(Rm60 209) outlined on page 11 of Eskom's 2009
Application for an Interim Price increase and use
that as a basis for calculation, we arrive at a
operating cost of R0.268/kWh. If this is used,
losses from all categories except residential and
agriculture worsen.
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Eskom Tariff Hike - Earthlife Africa Jhb
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Eskom Tariff Hike - Earthlife Africa Jhb
Eight Recommendations to NERSA 4) That Eskom and
its owner (the state) provide a meaningful and
decent free basic allocation of electricity
before seeking increases in tariffs. As Eskom
submission stands at the moment, it will result
in significant hardship for poor users. This is a
matter of extreme urgency.
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Eskom Tariff Hike - Earthlife Africa Jhb
About 12 million South Africans live on social
grants (i.e. they have annual incomes approx.
R29,000.00 or less). Will social grants go up by
34 from the 1st of April 2009? BHP Billiton's
Profit for 2008 was US6.1 billion.
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Eskom Tariff Hike - Earthlife Africa Jhb
Eight Recommendations to NERSA 5) That NERSA
fully examine Eskom's CAPEX plans for granting
increases. By following a generation plan based
on coal and nuclear technology, Eskom is setting
the nation up for increasing tariffs over the
long-term. NERSA aims for a sustainable utility
in the public interest the choices Eskom makes
today will affect these in the long-term.
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Eskom Tariff Hike - Earthlife Africa Jhb
Estimated Capital Cost of New Nuclear Power
Plant R1.82/kWh Estimated Total Cost per kWh
for New Nuclear Power Plant R2.46/kWh Current
Renewable Energy Feed-in Tariffs (which include
profit for companies and capital costs) as
Approved by NERSA Wind R1.25/kWh
Landfill Gas R0.90/kWh Small Hydro
R0.94/kWh Concentrated Solar R2.10/kWh
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Eskom Tariff Hike - Earthlife Africa Jhb
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Eskom Tariff Hike - Earthlife Africa Jhb
Eight Recommendations to NERSA 6) That Eskom
follow the White Paper on Energy and include
quantifiable externalised costs in its cost
calculations. This includes road
repair. energy prices to be as cost-reflective
as possible. To this end prices will increasingly
include quantifiable externalities. (1998 White
Paper on Energy (5.2.3))?
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Eskom Tariff Hike - Earthlife Africa Jhb
Eight Recommendations to NERSA 7) That OCGT not
be excluded from cost calculations. Eskom should
include its most expensive form of generation in
its cost accounting. 8) DSM should be considered
a savings and not a cost. Every MW saved is a MW
that doesn't have to be built
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Eskom Tariff Hike - Earthlife Africa Jhb
Thank You
www.earthlife.org.za