GENFLEX TARIFF
AND
INCOPORATION OF THE MEC INTO
THE NMD RULES
As approved by NERSA
Contents
Executive summary
Background
What is the Genflex tariff
Criteria for allocation of customers to the Genflex tariff
Tariff charges
NMD rule changes
Contracting
Implementation issues
2
Contents
Executive summary
Background
What is the Genflex tariff
Criteria for allocation of customers to the Genflex tariff
Tariff charges
NMD rule changes
Contracting
Implementation issues
3
Executive summary
In December 2014, NERSA published its approval of the Genflex tariff on the
NERSA website as follows:
• The introduction of a new tariff category (Genflex) for customers consuming
(importing) and generating (exporting) energy at the same point of supply (or
metering point) for urban and rural supplies connected to either the
Distribution or Transmission networks be approved.
• This tariff category is based on Eskom’s existing tariff rates and deals
specifically with the treatment of network-related charges where there is
consumption and generation of energy at the same point of supply to avoid
double-charging of network charges.
• All customers where there is consumption and generation of energy at the
same point of supply are encouraged to convert to the Genflex tariff to avoid
paying for network charges twice.
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Executive summary
• It is proposed that the rules applicable to loads with regards to NMD
are also applicable to generators with regards to MEC with the
exception of the treatment of the excess MEC charges. It is proposed
that the following is applicable to generators with respect to excess
MEC charges:
• The excess MEC charge will be raised with respect to the excess MEC
registered which is above the contractual MEC.
• Depending whether the generator is connected at Transmission or
Distribution level, the charge will be based on network charges applicable
for generators connected at Distribution or Transmission.
• With regards to medium voltage connected generators, the excess MEC
charges will be based on the network charges applicable to Distribution
high voltage connected generators.
• There will be no increasing penalties in accordance with the event
number of the MEC exceedance.
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Contents
Executive summary
Background
What is the Genflex tariff
Criteria for allocation of customers to the Genflex tariff
Tariff charges
NMD rule changes
Contracting
Implementation issues
6
Background
• In March 2012, NERSA published the “Regulatory rules on network
charges for third party transportation of energy”.
• These rules are to be republished
• Provide guidance on the treatment of use of system charges for loads
and generators
• In its MYPD3 determination, NERSA approved the introduction of use
of system charges for generators.
• The above raised the question of how should customers be charged where
there is consumption and generation at the same point of supply?
• There was no tariff category dealing with charges for customers that are both
generators and consumers of energy from the same point of supply.
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Where are we?
Introduction of Genflex
NERSA posted Genflex approval
with comments
Resubmission of Genflex
to NERSA
We are here
Preparation for
implementation
NERSA Public Hearing
scheduled
Eskom governance approvals obtained
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Contents
Executive summary
Background
What is the Genflex tariff
Criteria for allocation of customers to the Genflex tariff
Tariff charges
NMD rule changes
Contracting
Implementation issues
9
What is the Genflex tariff
• Genflex is a tariff category proposed for
scenarios
where
there
is
both
consumption and generation of energy
at the same point of supply (metering
point).
• Es
• Whether a generator requires energy for
auxiliary usage when not generating, or
a customer that is a co-generator
produces more energy than is
consumed (at times) and exports the
excess energy onto the grid, there is a
case for the Genflex tariff.
•
The same network assets are used for
the purposes of generating (delivering
energy into the grid) and for
consumption (importing energy from the
grid).
• The proposed Genflex tariff is developed
for the purpose of ensuring that
customer are not disadvantaged in
terms of payment of the use of system
related charges.
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• Eskom metering is capable of
measuring import and export of energy
from the same point of supply
What is the Genflex tariff (continued)
• There is currently no tariff category dealing with charges for customers
that are both generators and consumers of energy from the same
point of supply.
• There is also a need to review the NMD Rules to accommodate
Maximum Export Capacity rules.
• A separate submission to be made to the Regulator
• This submission suggests some of the principles that could be
incorporated into the Maximum Export Capacity rules.
8 April 2015
11
Comparison of use-of-system charges payable –
loads and generators
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Contents
Executive summary
Background
What is the Genflex tariff
Criteria for allocation of customers to the Genflex tariff
Tariff charges
NMD rule changes
Contracting
Implementation issues
13
Criteria for allocation of customers to the
Genflex tariff
• There must be consumption and generation at same point of supply
(metering point)
• The customer must be synchronised with the Eskom grid (and
supplied MV or HV or Tx connected)
• Where there is synchronisation, CUOSA must be in place (applicable
MEC)
• Generators/ consumers connected behind the Municipality network are
not considered for this tariff as they use the Municipality network
• The customer must have the appropriate metering i.e. 4 quadrant
metering
• Currently LPU customers have this metering
• Where this metering is not available the customer must convert to the
tariff and pay the applicable fees for the metering installed
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Contents
Executive summary
Background
What is the Genflex tariff
What are use-of-system charges
Criteria for allocation of customers to the Genflex tariff
Tariff charges
NMD rule changes
Contracting
Implementation issues
15
Tariff charges
Tariff
• All existing Customers consuming and generating
energy at the same point of supply will be required to
convert to Genflex tariff.
• The tariff will have an urban and rural version
namely:
• Genflex (urban)- This tariff will have the same rates as Megaflex and will
include the generator use of system charges.
• Genflex (rural)- This tariff will have the same rates as Ruraflex and will include
the generator use of system charges.
8 April 2015
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Tariff charges
Energy charges on electricity consumed
• The Customer will pay for all energy consumed at the relevant “Genflex”
energy rates i.e Genflex urban or Genflex rural rates.
Service and administration charges
• A service charge will be payable on the account level and an administration
charge will be payable on each transaction loaded.
• The administration of the account will require that the measurements for both
imports and exports are maintained and recorded for billing purposes.
• Hence two administration charges are payable.
8 April 2015
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Tariff charges
Contribution to subsidies
• The ERS will be payable on all energy consumed
• Affordability subsidy payable on all Eskom energy sales for urban customers
• Urban Low voltage subsidy will be payable where applicable
Network Charge
• The network charges payable will depend on whether the Customer is predominantly a load
or a generator and where the customer is Distribution or Transmission connected
• In each month the customer shall pay the greater of:
• The sum of the Genflex network charges for loads (i.e. the Transmission network charge
+ Distribution network access and demand charge and the urban Low voltage subsidy,
where applicable), or
• the sum of the Genflex network charges for generators
• Network charge applicable to generator ≥66kV
• Subject to NMD (MEC) rules application
8 April 2015
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Tariff charges
Reliability service charges (name changes to
Ancillary service charge in 2015/16)
• The Genflex reliability charge will be raised on the sum of the consumed or generated energy.
• This principle is different from the proposal in the Regulatory rules and it is specific for this
tariff.
• Eskom has no objection to raising the charges in terms of the principles of the Regulatory
rules on network charges for third party transportation of energy.
Reactive energy charge
• The Genflex reactive energy will be charged on all reactive energy supplied by Eskom at point
of connection on energy consumed during the high season months.
8 April 2015
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Proposed charges payable where consumption and generation
of energy occurs at the same point of supply – Transmission
connected and Distribution HV generators (>66kV)
Consumption
Generation
+ Energy chargesenergy generated to be recorded
for purpose of calculating reliability
service charge and losses
+ Energy charges
+ Network charges
+ Excess network charges
(NMD penalties)
+ Losses
+ Reliability services
Greater
of
Review in
NMD rules
Sum of
Sum of
+ Network charges
+ Excess network charges
(MEC excess charges)
+ /- Losses
+ Reliability services
+ NERSA approved subsidy
+ Service and admin charges
+ admin charges
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Proposed charges payable where consumption and generation
of energy occurs at the same point of supply –MV generators
(<66kV)
Consumption
Generation
+ Energy chargesenergy generated to be recorded
for purpose of calculating reliability
service charge and losses
+ Energy charges
+ Network charges
+ Excess network charges
(NMD penalties)
+ Losses
+ Reliability services
No Network charges applicable
Review in
NMD rules
Sum of
Sum of
+ Excess network charges
(MEC excess charges)
+ /- Losses
+ Reliability services
+ NERSA approved subsidy
+ Service and admin charges
+ admin charges
Contents
Executive summary
Background
What is the Genflex tariff
Criteria for allocation of customers to the Genflex tariff
Tariff charges
NMD rule changes
Contracting
Implementation issues
25
NMD rule changes
• The NMD/MEC Rules shall apply to both the NMD and the MEC. An excess
MEC charge will be raised when the MEC is exceeded. The excess MEC
charge will be raised as follows:
• The excess MEC charge will be raised with respect to the excess MEC registered
which is above the contractual MEC.
• Depending whether the generator is connected at Transmission or Distribution
level, the charge will be based on network charges applicable for generators
connected at Distribution or Transmission.
• With regards to medium voltage connected generators, the excess MEC charges
will be based on the network charges applicable to Distribution High voltage
connected generators.
• There will be no increasing penalties in accordance with the event number of the
MEC exceedance.
• Exceedance of MEC constitutes a material breach and consequences of such
exceedance are dealt with the Connection and use of system agreement.
• The excess NMD and MEC charges will be raised for both generation and
consumption.
8 April 2015
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Contents
Executive summary
Background
What is the Genflex tariff
Criteria for allocation of customers to the Genflex tariff
Tariff charges
NMD rule changes
Contracting
Implementation issues
27
Contracting
• A hybrid agreement which merges the current the Electricity Supply
Agreement and Connection and use of system agreement has been
developed for Genflex customers.
Customer scenario
Agreement to be signed
Existing electricity supply agreement and
existing connection and use of system
agreement
Amendment agreement – tariff only
Existing connection and use of system
agreement, no electricity supply agreement
Amendment agreement- incorporating the
supply agreement
Existing electricity supply agreement, no
connection and use of system agreement
New agreement to be signed (hybrid Genflex
agreement)
New electricity supply agreement, new
connection and use of system agreement
New agreement to be signed (hybrid Genflex
agreement)
• Customers are to be converted to the tariff once agreement is signed.
• Once the customer no longer meets the criteria for the Genflex tariff i.e. is no
longer a generator and consumer of energy, then the customer may revert to
other standard tariff options.
8 April 2015
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Contents
Executive summary
Background
What is the Genflex tariff
Criteria for allocation of customers to the Genflex tariff
Tariff charges
NMD rule changes
Contracting
Implementation issues
29
Other implementation issues
• All customers converted to the tariff must comply with the existing
pricing policies.
• Depending on the outcome of the process to be followed in terms of
the Regulatory rules on third party transportation of energy, the
Genflex tariff structure may change.
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Thank you