NERSA welcomes comments on Guideline for Electricity Reseller Tariffs

Submitted by: Nadia Shah, Monday, February 23, 2015

<p>Stakeholders are invited to comment on the consultation paper in writing, the deadline for comments is the 9th of March 2015. (Image source: NERSA)</p>

Stakeholders are invited to comment on the consultation paper in writing, the deadline for comments is the 9th of March 2015. (Image source: NERSA)

The National Energy Regulator of South Africa (NERSA) has released a Consultation Paper on the Guidelines for Electricity Reseller Tariffs. Stakeholders and members of the public are invited to comment on the consultation paper in writing, the deadline for comments is the 9th of March 2015.

According to the guideline document, the purpose of the Consultation Paper on the Guidelines of Electricity Reseller Tariffs is to:

  • Solicit comments from stakeholders on the existing tariff structures
  • Explore various options available in promoting the orderly functioning of the Electricity Supply Industry (ESI) in the country
  • Comprehensively seek stakeholder input on the roles, responsibilities and obligations of all interested and affected parties within the electricity resale value chain

“The Electricity Reseller Tariffs are meant to protect customers from the high prices currently charged by resellers as well as ensuring that resellers run economically viable businesses as they operate in a space where municipalities do not have sufficient capacity to provide services,” explained Charles Hlebela, Head of Communications at NERSA.

Stakeholder questions

The guideline document outlines the tariff structures to be applied by licensed authorities when designing reseller tariffs, the criteria to qualify as a reseller (non-licensed trader) and general conditions applicable to licensed authorities. In the document, NERSA poses a number of specific questions to stakeholders related to these topics. Below is a list of the stakeholder questions raised in the document:

  1. Should the tariff structure implemented by the licensed authority to its customers be the same or aligned to the same tariff structure that the licensed authority designs for its reseller to ensure that the tariff structure applied to the reseller’s customer is similar to the structure the licensee implements to its customers? Kindly elaborate.
  2. Should the resellers and customers of resellers be consulted by the licensed authority designing reseller tariffs? And how should this process be conducted?
  3. Do you agree with the assertion that if the reseller tariff is designed in such a way that the various input costs are taken into account, only those costs are supposed to be passed through to the end user?
  4. Municipalities and Eskom have a liberty to cross subsidise within their customer classes, in the case of non-recovery of costs. However, in the case of a reseller’s under recovering costs when providing a service to end users, what do you suggest should be done to address this issue without distorting the price the end user pays for electricity? 
  5. Should incentives be provided to resellers by licensees for special cost recovery allowances, or how should resellers be compensated for any potential additional costs likely to be incurred in operating and maintaining the network beyond the bulk meter point, without over charging customers?
  6. Should a mark-up of 12% to 18% when licensees are designing reseller tariff be regarded as reasonable, to ensure that end users are charge the same tariff charged to customers directly supplied by a licensee? Kindly elaborate.
  7. How free basic energy should be implemented by resellers to ensure that eligible customers benefit?
  8. In most cases buildings or complexes with low load factors run at a loss, will these ever be profitable? Should resellers operate in such buildings or complexes?
  9. Should resellers be allowed to operate at freehold developments, where a house or building and the land on which it is built is fully owned by an individual?
  10. What conditions are currently in place between resellers and their licensed authorities for supplying electricity to the end user?
  11. How should disputes between customers supplied by resellers and reseller be resolved?
  12. What other information licensee should submit to NERSA pertain to resellers?

According to Hlebela, comments received will be taken into consideration by NERSA during their deliberations. Comments must be submitted in writing to Mrs Nomalungelo Simelane via email, fax or post.

Email: electricityresale@nersa.org.za

Fax:     (012) 401 4700

Post:    Electricity Regulatory Reform Department 

             The National Energy Regulator

             PO Box 40343

             Arcadia

             Pretoria, 0007

To view the latest version of NERSA’s Consultation Paper on the Guidelines of Electricity Reseller Tariffs, please download the attachment.

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