# Interest group forums > Electrical Contracting Industry Forum > Electrical Load Shedding Forum >  New electricity pricing policy will target the wealthy

## Dave A

South African consumers are in for a new electricity shock when the government implements its plans from May 1 to penalise wealthier and heavier domestic users of power who fail to heed energy savings warnings.

Eskom will target its customers in the upper-income bracket - people living in wealthier suburbs with homes that have good lighting, a geyser, underfloor heating, electrical gadgets and a swimming pool. 

Domestic dwellers in better-off suburbs will be asked to slash their energy consumption by 10 percent - or pay a penalty measured on a daily basis. At present, customers pay 40 cents a kilowatt hour (kWh) for energy but when the new tariff structure comes into effect, heavy users would pay as much as R1,50 per kWh during peak periods.

While the tariff structure in terms of penalties to be imposed was being finalised, heavy users could expect to pay more for electricity unless they started reducing consumption, said Aphane. "Domestic surveys have shown that some people get by on 200kWh a month while others are using up to 5 000kWh a month.

"Many customers are paying R2 000 a month on their electricity bills, while at the lower end people are spending R20 a month only for lighting and electrical items, like a radio," he said. 

In terms of the law, customers paying R2 000 would have to cut down by at least 500kWh a month, and failure to do so, although this would depend on consumption measured on a daily basis, could add as much as R750 to their monthly bills.

Aphane said that during peak times energy suppliers used diesel to maintain their supplies and this cost R2 a unit, so there was no way that consumers could continue to pay 40c for a unit when it cost more to supply the power. "It does not make sense that consumers are getting it cheaper," he said.
full story from IOL here

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## Chatmaster

I have a feeling Eskom and government are heading for some confrontation here. They messed up and we need to pay for it, I say they are heading for major opposition here, I for one will not stand for their idiotic reasoning around this issue. Eskom has been making a big profit in the past and increasing the cost with about 4c makes sense but increasing the costs to about R1,50 is plain and simple a way of increasing their profits even further. The game is so clear it is scary! These thieves in Eskom will get even better and more bonuses because their profits will leap even higher. This is not about saving energy, it is about making more money and stealing more money from us. Anyone care to point me into the direction of the closest looney bin to look for a better top management for Eskom and government?  :Boxing:

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## IanF

Roelof
You are right, but speaking to some guys they say why should they turn off their geyser they will rather pay.  :Rant1: 
So the only way they will co operate is if they are hit in the pocket. But the excess should not go to Eskom rather some thing else.

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## Chatmaster

Well I have cut my electricity usage with almost half but it still means I will pay the higher rate, I have definitely contributed as far as I could, does that mean that I must be categorized with those that do not care? Besides, I doubt most of us feel that we don't care, it is a small minority imo that feels they can carry on as normal, nah I think there is more to this than just making people pay to ensure that they do their part.

Besides, they actually have a point. Eskom is making their problem ours to ensure that they can still honor the contracts they signed despite knowing very well they couldn't deliver. Ian, honestly I cannot get to a point where I feel that they have good intentions simply because the same "criminals" are still making decisions around this issue.

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## IanF

Eskom are to blame and probably the government as well. But there is a crisis not of our making which effects all of us. So break this in to 2 parts we all need to do our bit to save electricity to help us RSA through this. 
We also have to make the idiots who got us into this pay, the president is showing no leadership, the ministers are showing no leadership, Eskom is showng no leadership. So no one is inspired to help. :Rant1:

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## murdock

bend over and keep holding those ankles fellas i am sure the chimps arent finished shafting you yet...there will stil be a lot more surprises...wait till zuma and cosatu take over and really gets things going...there is nothing you can do about it except run to another country or make a stand and get a thousand signed emails...yeah right like will solve the problems.

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## Moneymaker

I've decided to implement the following after watching our politicians do the same...

"SELF first, country second......."   :Wink:   :Stick Out Tongue:

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## Dave A

I've got to say I thought that pricing to diesel generator running costs seemed like a convenient leap in logic.

Now if that extra money goes back to folks who are having to use generators to fill Eskom's lapses, I might just say that's fair enough. But somehow I don't see that happening  :Whistling:

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## Bantsijang

I dont beleive that the new electrcity pricicng policy will target the rich, let just see it posetively that it will help the poor. The Electricity Supply Industry is governed by the Electricity Regulation Act and guided by the Energy White Paper of 1998. The energy White Paper speaks broadly about electricity pricing principles without expatiation and does allude to the development of the Electricity Pricing Policy. The Electricity Pricing Policy seeks to fulfill this role by providing clear principles to be followed when electricity prices (tariff) are determined thus forming a basis for the forthcoming multi year price determination. In the absence of the Electricity Pricing Policy equitable tariffs can not be realized and therefore the industry may not achieve the sustainability it requires. This policy was approved by the Cabinet on the 20th November 2008.

Matthews Bantsijang: Director of Electricity Policy and Regulation, Dept of Minerals and Energy.

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Chatmaster (26-Nov-08), Dave A (26-Nov-08), duncan drennan (26-Nov-08)

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## Dave A

Thank you Matthews for adding your view to this discussion. It is very refreshing to get input from the regulator's side which I think helps everyone's understanding.

I suspect there is a sympathy for subsidising the poor. Something like electricity supply is a key component to getting them out of the poverty trap one day. 

However, the special rates being given to some of the biggest consumers is a little more difficult to swallow. Why should the middle class and above be subsidising electricty supplies to aluminium smelters, for example?

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## Graeme

How on earth will Escom measure daily usage - "slash their energy consumption by 10 percent - or pay a penalty measured on a daily basis". Does this mean that Escom will be installing a daily measuring device next to the millions of electricity meters in SA.  Where will they find the resources to do that?

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