Detail on MES electricity tariffs for residential consumers for

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					Detail on MES electricity tariffs for residential consumers for 2010/11

Changes to MES rates and tariffs for electricity:

The unit rate: The rate to be charged in cents per kWh (kilo Watt used in an hour) will in future be to the “in-
clining block tariff” structure (IBTs) announced by the National Energy Regulator in its press release on 24 Feb.
‘10. The rate starts at 54,70c/kWh (VAT excluded) for the first 50kWh consumed per month and increases gradu-
ally to reach 83,74c/kWh for every kWh consumed above 600kWh for the month. The average rate will depend
on the usage and thus change every month for each consumer.

The seasonal rates introduced by MES end 2009 will be replaced by the IBTs with the same IBT-structure to be
applied during winter and summer.

Metering period: MES varied the number of days in the monthly metering periods in the past to provide con-
sumers some relieve in their cash flow management during the winter. The metering period was as short as 21
days during winter (a 30% benefit) and then lengthened during summer. With the newly introduced IBTs being
determined by consumption per month, this will no longer be possible. MES will apply 28 day metering periods
during winter and slightly longer during summer to end with 12 metering periods in a 365 day cycle;

Environmental Levy: The environmental levy was introduced by government on 1 July 09 at 2c/kWh (VAT
excluded). Where ESKOM previously charged MES 2,25c/kWh (VAT included) the amount has now been adjusted
to 2,28c/kWh (VAT included). MES will thus implement a marginal increase from 2,25c/kWh to 2,28c/kWh.
Network Charge: The previous “fixed levy” will be re-
placed by a “network charge”. The network charge will
compensate for public (street) lighting, account administra-
tion costs, demand side management and a smart metering
system. The change in the amount payable being as follows:
Date of implementation: The date of implementation
coincides with the date upon which ESKOM raised their tariffs to MES – being 1 April 10 and will continue up to
30 March 11.

What is the expected nett effect? The newly introduced IBTs will lead to a higher unit for above average con-
sumers and lower increase for below average consumers – as per the table below:

                                                                            Note: Average consumption in Mid-
                                                                            rand Estates for the consumer
   How are MES’s rates and tariffs controlled? The latest in-               categories are as follows:
   creases by MES should be weighted up against the approved income
   of 24,8% for ESKOM for 2010/11 as announced on 24 Feb 2010 by
   the National Energy Regulator of South Africa (NERSA). As a re-seller
   of electricity MES has to conform to the Electricity Supply Act. The
   introduction of the IBTs placed a strong emphasis on the determina-
   tion of the fixed monthly levy – now called the “network charge”. As
   such, MES has submitted the above mentioned rate and tariff struc-
   ture to the NERSA for their scrutiny.
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