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Bulk energy tariff in spotlight

It appears as if the Drakenstein Municipality is forcing local businesses either to shut down or relocate their businesses to a more user-friendly municipal area according to Johan Buys, director of the Berg River Business Park, where the Bulk User tariff was introduced last year.

Previously industrial users in Drakenstein were on a time-of-use (ToU) tariff, in line with the Energy Pricing Policy.

However, a new tariff category called Bulk User Tariff was introduced with a rule that moves users to Bulk if their “load factor”, in council’s definition, is less than 50%.

Although Buys says he is sympathetic to the municipality which will generate revenue from the new tariff, he believes it discriminates against one class of users and places existing businesses at risk of financial ruin.

“The tariff is an attempt to penalize users that adopt renewable energy by implementing a massive increase in kVA fees and reducing kWh fees below the licensee’s Eskom cost,” said Buys.

According to Marius Wüst, Director of Engineering Services at the Drakenstein Municipality, the ToU tariff was previously aimed at electricity consumers who could shift their consumption, to assist in the distribution of energy consumption to a more even pattern in order to control the maximum demand.

“However, there was a huge gap in tariffs, and the only way to solve this was to also - like most other municipalities - set a bulk tariff for consumers who cannot shift their energy consumption,” says Wüst.

Wüst explains that consumers have three choices if their energy consumption pattern does not allow them to move enough energy time: Manage your maximum demand better, improve the ratio (energy to maximum demand); or consider the options to make use of other rates.

“For some consumers it is advantageous, and for some it is not, because the maximum demand does not make sense in relation to energy consumption.

“However, we want to help our consumers to be at the correct rate for their type of consumption, and secondly to encourage the consumer to manage the maximum demand.”

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