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An electricity consulting firm is piloting a project in Graaff Reinet that aims to help municipalities increase their margins without charging residents more. The CEO of Utility Consulting Solutions, Christo Nicholls, told Cape Talk that residents' electricity prices depend on how much the municipality pays to buy it in bulk from Eskom. He gave the example of the Dr Beyers Naude municipality, where Graaff Reinet is located, which spends an average of between R2.
10 and R2.15 per kilowatt of electricity purchased from Eskom annually. The municipality then adds a tariff to this cost, determining the price residents will pay for electricity.
Nicholls says this often brings the price close to R3 per kW. However, he argues that if the price of electricity increases above the Consumer Price Index plus two, it becomes unaffordable for residents. Nicholls suggests using a battery and the principle of arbitrage to solve this issue while allowing municipalities to generate more revenue from electricity distribution.
"Eskom sells electricity to municipalities in what they call time-of-use tariffs. So, they have a rate for all the electricity the municipality buys during peak times, Nicholls said. He added that there are peak periods in the morning and evening, a standard time in between, and off-peak after 10 in the evening.
So, the principle is simple. You charge a big..
. Daniel Puchert.
