What the goverment plans to do

[duncan drennan]

500 kWh per month is a pretty low threshold, even for an average domestic household.

Yes, it is particularly low. It will be interesting to see the split across provinces for the survey - come on people, answer that survey!

[Sefton]

I don't know exactly what thresholds and billing models that Eskom is planning to use, so I am basing my comments on the information that you have provided.

I assume by "time sensitive electricity metering" you mean time-of-use billing.

In my opinion 500 KWh is far too high, in fact I believe that time-of-use billing should start from zero.

Let me explain. The problem that Eskom has is that demand is exceeding supply DURING PEAK HOURS. Time-of-use billing is the same model that Telkom and the cell phone companies use. They charge more during peak and less during off-peak.

Lets say that the cost per unit(KWh) is 40c. If Eskom charged 30c during off peak and 60c during peak, then a lot of homes and businesses would make an effort to cut down on usage during peak. This could result in a saving for the user. The net result is that the usage of electricity would be "smoothed out". The average use of electricity would remain the same, but the peak demand would be reduced. This would solve the problem of demand exceeding supply.

You will have the option of fitting a time switch to switch off your geyser during peak, or not to tumble dry or not have your pool filter running or have lights off in empty rooms during peak. For a small amount of effort you will save money and also solve the country's electricity problems. Lets face it, most people aren't going to make the effort if there is no monetary incentive.

Other countries such as Canada are using this billing model for electricity.

To sum up, I believe that time-of-use billing will solve our short term problems. I say it should start at zero.

[Dave A]

Essentially I agree with Sefton. Starting from zero makes sense and would be fair. However, government plainly does not want to start at zero - the question is why?

And of course, once we get to the bottom of that, the next questions are - are the reasons fair and has the line been drawn at a fair level?

The irony is that up until now, if you were a heavy user of electricity, you could negotiate a discounted rate!

[Sefton]

Dave, that last sentence of yours is interesting. Assuming Eskom and the government did not mess up, then, purely from a business point of view, Eskom should be encouraging us to use more electricity, rather than less. However, the other side of the coin is that more natural resources would be consumed and more pollution would be created, so maybe the fact that they messed up is a blessing in disguise.

[duncan drennan]

However, government plainly does not want to start at zero - the question is why?

I reckon they don't want to penalise low income households. If that is the reason it is a pretty bad one.

In Brazil, when they had to ration electricity (another form of price signalling), their biggest contributors were low income households. This makes quite a bit of sense as they have the most to lose (cost per household income).

It would make more sense to have it start from zero, and look for ways to incentivise businesses to reduce electricity (e.g. discount if you reduce electricity consumption to below 80% of previous year's).

[Dave A]

I reckon they don't want to penalise low income households.

Implementation challenges and popularity considerations are other possiblities.

Any others?

[Dave A]

A little feedback on the results so far:

45% of respondents from Gauteng
90% of respondents are business owners or managers (No suprise given where I've punted this survey so far)
73% of respondents are in a "work from home" business

Highlight numbers for electrical consumption at home:
18% use less than 500kWh per month
27% use 501-750kWh per month

Highlight numbers for electrical consumption at work (where this is at a seperate premises from home):
0% uses less than 500kWh per month
33% uses 501-750kWh per month

I think it just goes to show that "relief" (if that is the goal of having a threshold in the first place) could be extended to small business and many more smaller households by shifting the threshold to 750kWh.

I would prefer a much bigger sample though before I'd consider attempting raising the point in any serious way. For those who have not taken the survey yet, please think about doing it soon.

[duncan drennan]

I think it just goes to show that "relief" (if that is the goal of having a threshold in the first place) could be extended to small business and many more smaller households by shifting the threshold to 750kWh.

Maybe it shouldn't be seen that way? If you view it the other way around, as an "incentive" then a lower threshold achieves more in terms of providing the country more leeway to grow.

Just a thought - still deciding how I feel about this.

[Chatmaster]

I think it just goes to show that "relief" (if that is the goal of having a threshold in the first place) could be extended to small business and many more smaller households by shifting the threshold to 750kWh.

I agree with you here, but I want to ask this simple question. If our shortage is for example 15%, Why not simply require that everyone use 15% less electricity? Everyone have a different setup. Mine is fluctuating according to my business growth so I will have serious problems anyway if my business grow, but 750kWh seems to be waaaaaaaayyyyyy below my current usage. I have been cracking my head and cannot think of ways to get it below 2500, I m seriously worried about the decision they will make at the end of the day. Besides each residential house is unique in its size, layout and occupancy. By simply stating that all houses must have x usage is not practical nor possible imo.

[Dave A]

I basically like Sefton's idea of starting from zero. But if there is going to be a differentiation point - well let's try to find one for the right reasons.

If you take a look at the difference between the first draft and what we got in the end on BEE - a sound argument can make a difference. Especially when it's competing against the first thumb suck.

[duncan drennan]

I agree. The time based tariff should start from zero. It incentivises all users to change their usage habits and to try to shift their usage where they can. This is good for business in that it will help to ensure that they have a steady supply of energy.

Obviously on the other side it is bad for business as their base costs go up, but there is an incentive to try to move your load around (where possible).

I think the off peak tariff should be slightly lower than the current tariff. This means that it may even be possible to save money in some cases.

This does not have to do with the time based tariffs, but I wonder if there is any merit in having different billing packages that users could choose from? e.g. say there were two billing packages, one had a lower rate per unit, but you are billed on a sliding scale (like water is billed), while the other has a higher rate per unit, but did not scale with consumption. Users could choose a package suitable for their usage pattern.

[Dave A]

This does not have to do with the time based tariffs, but I wonder if there is any merit in having different billing packages that users could choose from?

Heck, Duncan. I have a hard enough time with all the cellphone packages out there. Now you want to torture me with choices on electricity billing options

[irneb]

The way it's running now, this is not going to happen soon. I'm talking about time biased billing. How will Eskom know what KWh you've used at what hour of the day?

The current meters only show how much has been used in total since installation - thus reading at the end of the month & deducting the previous month's reading gives the amount of kWh used during the month. This is the best scenario which can happen. Usually Eskom just bills for 3 to 6 months on an average use as experienced previously for that user. Then an update reading is made and the next billing then adjusts for the difference. We've all seen those "strange" bills happen - those that's either too high or too low according to what we usually get.

In order to get time-biased billing working "right now", these readings need to be taken at least twice a day ... yeah sure that's going to happen.

A solution I can think of would be to have 2 meters installed with a timer switching between the 2 at pre-set times (or maybe "remotely"). Extra capital outlay for probably the user. Or most probably a new type of meter needs to be installed. Although both these solutions won't happen soon - similar problem as per the remote shut-off of geysers and HVAC's .... HOW AND WHEN???

[Chatmaster]

I heard over the news this morning that Harmony mines are planning to build their own power station for 5 of their mines. I wouldn't be surprised if others follow soon.

[Dave A]

I think they're planning to replace the meters. Time sensitive metering is simply not possible without the right equipment.

In terms of roll-out, I expect the most effective way to do it is to start with the bigger clients. To this extent setting targets for the installation of new meters prioritised by consumption makes sense.