NERSA PUBLIC HEARING

ELECTRICITY TARIFF APPLICATION FOR 2013/2014

MR P WILLIAMSMUNICIPAL MANAGER

LAINGSBURG MUNICIPALITY

CONTENTS1. BACKGROUND

1. WHERE IS LAINGSBURG2. MAPS3. OUR CURRENT SITUATION4. ASSUMPTIONS

2. SCENARIOS3. MOTIVATIONS4. CONCLUSION5. APPENDICES

1. BACKGROUND1.1 WHERE IS LAINGSBURGLAINGSBURG MUNICIPALITY - SMALL TOWN IN CENTRAL KAROO - SOUTH WESTERN CAPE

FALLS WITHIN THE TRANSMISSION ZONE ABOVE 900 KM

THAT MEANS IT IS ON THE HIGHEST TARIFF BRACKET

TARIFF CATEGORY - NIGHTSAVE RURAL KvA

1.2 MAP

• OVER THE LAST 4 FINANCIAL YEARS DEFICIT INCREASED

• DUE TO LEVEL INCREASING OF TARIFFS

1.3 CURRENT SITUATION

YE2006 YE2007 YE2008 YE2009 YE2010 YE2011 YE2012REV -2205 -2372 -2616 -3357 -4486 -5681 -7644EXP 2087 2358 2824 3494 4432 6559 8775SURP/DEF -118 -14 208 137 -54 878 1131

-9000

-7000

-5000

-3000

-1000

1000

3000

5000

7000

9000

REVE

NU

E /

SURP

LUS

R

VAL

UE

EXP

/ D

EFIC

IT

ELECTRICITY ACCOUNT

1.3 CURRENT SITUATION ……….cont

1.3 CURRENT SITUATION ……….cont

PAYMENT RATIO FOR ALL SERVICE DEBTORS CURRENTLY AT 90.3%

PAYMENT RATIO FOR ELECTRICITY CURRENTLY

AT 96.7%

1.4 ASSUMPTIONS FOR 2013/2014

AVERAGE RURAL BULK TARIFF INCREASE – 11.2%AS APPROVED BY NERSA ON 28 FEBRUARY 2013THIS IS HIGHER AS ESKOM IS DOING TARIFF RESTRUCTURING-

2011/2012 2012/2013 2013/2014ESKOM APPROVED 25.5 % 14.4 % 11.2 %ACTUAL 30.01 % 20.69 % 16.41 %

ESTIMATED INCREASE IN CONSUMPTION – 2%

AVERAGE LINE LOSSES LESS THAN 9%

• THERE ARE NO ILLEGAL CONNECTIONS• ALL POINTS ARE METERED AND BILLED

2.1 SCENARIO FOR 2013/2014

The following income statement for the Electricity Department is based on:- Eskom Tariff increase of 11.2% for the Municipal Nightsave Rural- Municipal Tariff increase of 14.4%

INCOME STATEMENT FOR ELECTRICITY DEPARTMENT

ACTUAL FOR2011/12

REVISED BUDGET FOR

2012/13

BUDGETFOR

2013/2014

% INCREASE 2013/14

TOTAL REVENUE 7 644 393 8 069 500 9 288 400 15.11

TOTAL EXPENDITURE 8 774 640 9 280 520 9 626 417 3.73 ESKOM 4 313 107 5 189 711 6 034 834

SURPLUS / (DEFICIT) (1 130 247) (1 211 020) (338 017) (72.09)

2.2 SCENARIO FOR 2013/2014………CONT

The following income statement for the Electricity Department is based on:- Eskom Tariff increase of 8.5% for the Municipal Nightsave Rural- Municipal Tariff increase of 8.5%

INCOME STATEMENT FOR ELECTRICITY DEPARTMENT

ACTUAL FOR2011/12

REVISED BUDGET FOR

2012/13

BUDGETFOR

2013/2014

% INCREASE 2013/14

TOTAL REVENUE 7 644 393 8 069 500 8 913 200 10.46

TOTAL EXPENDITURE 8 774 640 9 280 520 9 441 394 1.73 4 313 107 5 189 711 6 034 834

SURPLUS / (DEFICIT) (1 130 247) (1 211 020) (528 194) (56.38)

2.3 SCENARIO FOR 2013/2014………CONT

The following income statement for the Electricity Department is based on:- Eskom Tariff increase of 6.2% for the Municipal Nightsave Rural- Municipal Tariff increase of 7.0%

INCOME STATEMENT FOR ELECTRICITY DEPARTMENT

ACTUAL FOR2011/12

REVISED BUDGET FOR

2012/13

BUDGETFOR

2013/2014

% INCREASE 2013/14

TOTAL REVENUE 7 644 393 8 069 500 8 818 800 9.29

TOTAL EXPENDITURE 8 774 640 9 280 520 9 285 139 0.05 4 313 107 5 189 711 6 034 834

SURPLUS / (DEFICIT) (1 130 247) (1 211 020) (466 339) (61.49)

3. MOTIVATIONS� SMALL ELECTRICITY REVENUE BASE� ONLY 834 CONSUMERS� 338 CONVENTIONAL METERS� 496 PREPAID METERS

� NO INDUSTRIES � NO STEP TARIFFS� ESKOM SERVICE ABOUT 35% OF URBAN

AREA� 455 PREPAID METERS

� REDUCE DEFICIT OVER A 3 YEAR PERIOD

4. CONCLUSION� NIGHTSAVE RURAL INCREASES MORE

THAN WHAT IS APPROVED –� DEFINITION BETWEEN RURAL & URBAN

MUST BE CHANGED� Eskom must ensure that alternate tariff options (other than

Time-of-Use tariffs) are available to municipalities with a predominantly residential load mix. � Eskom to move Laingsburg’s two metering points to

Nightsave Urban or Miniflex

TOGETHER WE CAN MAKE LAINGSBURG A BETTER PLACETOGETHER WE CAN MAKE LAINGSBURG A BETTER PLACE

Thank youThank you

5. APPENDICES• 5.1 Letter with reference E 1/3

dated 26 April 2013 with Council’s approved tariffs.

5. APPENDICES• 5.2 Eskom’s consumption report : Town Supply Point:2012

Year Month

Monthly Rental(Ledger for Account Level)

Consumption Charged Demand

Actual kVA Maximum Demand

Actual kW Maximum Demand

Revenue Cents/Unit

LOW SEASON

Hhigh season

2012 1 JANUARY 561 366.00 1 162.59 1 162.58 1 028.36 313 724.86 55.89

2 FEBRUARY 570 070.00 1 174.08 1 174.08 1 044.96 317 646.68 55.72

3 MARCH 533 659.00 1 145.30 1 145.29 1 018.60 303 062.92 56.794 APRIL 508 927.00 1 026.79 1 026.79 924.64 282 709.79 55.555 MAY 488 902.00 1 011.43 1 011.42 951.36 274 756.97 56.26 JUNE 569 637.00 1 213.00 1 213.00 1 168.00 410 458.06 72.067 JULY 594 542.00 1 201.55 1 201.55 1 152.36 538 054.78 90.58 AUGUST 620 580.00 1 244.59 1 244.58 1 195.20 588 151.38 94.77

9 SEPTEMBER 565 260.00 1 204.26 1 204.26 1 163.40 458 756.71 81.16

10 OCTOBER 485 021.00 1 043.52 1 043.51 968.32 307 570.44 63.41

11 NOVEMBER 504 147.00 1 043.72 1 043.72 943.12 314 226.40 62.33

12 DECEMBER 514 210.00 1 096.37 1 096.36 969.92 323 929.68 63

2012 6 516 321.00 1 131 1 131 1 044 R4 433 049 68.03 61.12 85.782.52% 3.02% 3.02% 3.48% 20.69% 17.72% 18.45% 17.06%

5. APPENDICES• 5.3 Eskom’s consumption report : Bergsig Supply Point:2012

Year Month

Monthly Rental(Ledger for Account Level)

Consumption Charged Demand

Actual kVA Maximum Demand

Actual kW Maximum Demand

Revenue Cents/Unit

LOW SEASON

Hhigh season

2012 1 JANUARY 91 811.00 250.63 298.89 287.92 47 674.49 51.93

2 FEBRUARY 89 956.00 265.65 309.59 300.48 48 714.03 54.15

3 MARCH 85 312.00 258.02 331.3 321.2 50 045.57 58.66

4 APRIL 88 352.00 270.17 349.04 342.96 54 243.14 61.39

5 MAY 86 148.00 276.08 320.89 314.8 49 368.56 57.31

6 JUNE 91 235.00 305.69 349.75 346 74 981.01 82.18

7 JULY 91 252.00 277.27 366.8 362.8 98 689.09 108.15

8 AUGUST 94 806.00 292.24 360.16 357.44 106 502.58 112.34

9 SEPTEMBER 88 320.00 274.62 335.66 330.8 77 785.73 88.07

10 OCTOBER 85 940.00 275.53 313.5 307.6 50 971.28 59.31

11 NOVEMBER 85 154.00 242.66 295.88 290 49 659.91 58.32

12 DECEMBER 81 531.00 239.6 292.46 281.6 48 027.37 58.91

2012 1 059 817.00 269 327 320 R756 663 71.40 60.89 100.89-1.77% -2.18% 1.08% 0.99% 18.21% 20.34% 20.98% 24.03%

5. APPENDICES• 5.2 Eskom’s consumption report : Town Supply Point:2013

Year Month

Monthly Rental(Ledger for Account Level)

Consumption Charged Demand

Actual kVA Maximum Demand

Actual kW Maximum Demand

Revenue Cents/Unit

LOW SEASON

Hhigh season

2013 1 JANUARY 552 112.00 1 149.86 1 149.85 1 021.30 343 484.67 62.21

2 FEBRUARY 553 683.00 1 166.97 1 166.97 1 028.50 346 121.81 62.51

3 MARCH 491 377.00 1 153.22 1 153.22 1 042.36 322 871.43 65.71

4 APRIL 510 650.00 1 101.67 1 101.66 997.36 323 557.13 63.36

5 MAY 488 902.00 1 011.43 1 011.42 951.36 274 756.97 56.20

6 JUNE 583 991.85 1 213.00 1 213.00 1 168.00 495 381.83 84.83

7 JULY 609 524.46 1 201.55 1 201.55 1 152.36 649 378.31 106.54

8 AUGUST 636 218.62 1 244.59 1 244.58 1 195.20 709 839.90 111.57

9 SEPTEMBER 579 504.55 1 204.26 1 204.26 1 163.40 553 673.47 95.54

10 OCTOBER 497 243.53 1 043.52 1 043.51 968.32 371 206.76 74.65

11 NOVEMBER 516 851.50 1 043.72 1 043.72 943.12 379 239.84 73.38

12 DECEMBER 527 168.09 1 096.37 1 096.36 969.92 390 950.73 74.16

2013 6 547 226.60 1 136 1 136 1 050 R5 160 463 78.82 69.75 100.980.47% 0.46% 0.46% 0.58% 16.41% 15.86% 14.12% 17.72%

5. APPENDICES• 5.3 Eskom’s consumption report : Bergsig Supply Point:2013

Year Month

Monthly Rental(Ledger for Account Level)

Consumption Charged Demand

Actual kVA Maximum Demand

Actual kW Maximum Demand

Revenue Cents/Unit

LOW SEASON

Hhigh season

2013 1 JANUARY 88 733.00 231.96 277.13 264.8 50 787.47 57.24

2 FEBRUARY 88 257.00 251.62 307.56 296.96 51 214.89 58.03

3 MARCH 80 886.00 267.84 293.62 284.96 48 554.53 60.03

4 APRIL 91 971.00 286.75 307.44 298.08 54 741.09 59.52

5 MAY 86 148.00 276.08 320.89 314.8 59 410.13 68.96

6 JUNE 91 235.00 305.69 349.75 346 90 232.15 98.90

7 JULY 91 252.00 277.27 366.80 362.8 118 762.45 130.15

8 AUGUST 94 806.00 292.24 360.16 357.44 128 165.20 135.19

9 SEPTEMBER 88 320.00 274.62 335.66 330.8 93 607.35 105.99

10 OCTOBER 85 940.00 275.53 313.50 307.6 61 338.84 71.37

11 NOVEMBER 85 154.00 242.66 295.88 290 59 760.74 70.18

12 DECEMBER 81 531.00 239.60 292.46 281.6 57 796.14 70.89

2013 1 054 233.00 268 318 311 R874 371 82.94 69.13 121.41-0.53% -0.20% -2.63% -2.80% 15.56% 16.17% 13.53% 20.34%