Dr. Beyers Naudé Local Municipality
rising together for development
NERSA Tariff Compliance Analysis
This dashboard illustrates the critical disconnect between the Bulk Supply Cost from Eskom and the NERSA-approved Distribution Tariffs. As per NERSA regulations, municipalities should generate a 60% gross profit margin on electricity distribution to fund infrastructure maintenance and service delivery obligations.
The DBNLM Bulk Account Status Quo
Dr. Beyers Naudé Local Municipality faces a systemic institutional challenge that threatens its ability to fulfill constitutional service delivery mandates — not due to administrative failure, but due to structural tariff misalignment beyond municipal control.
NERSA-approved Distribution Tariffs are designed to generate a 60% gross profit margin on electricity trading — a margin essential for municipalities to fund infrastructure maintenance, operational costs, and cross-subsidize other essential services.
Constitutional Mandate at Risk
- Service Delivery: Electricity collections cannot cover electricity expenditure, let alone support other services
- Inter-Service Cross-Subsidization: Monthly shortfall of R33.6M across Water, Refuse, Sewerage and Other services historically dependent on electricity surplus
- Credit Control Paralysis: Eskom distribution areas prevent DBNLM from implementing credit control via prepaid electricity blocking
The My SSEG DBNLM initiative proposes a sustainable, technology-driven intervention that addresses the root cause of the tariff disconnect through strategic energy asset deployment:
- • Tariff arbitrage: Charge off-peak, discharge peak
- • Virtual Wheeling: Eskom credits against debt
- • First national debt-recovery-by-energy model
- • Across 6 towns in DBNLM
- • Reduce Eskom bulk dependency by 60%
- • Generate new gross profit to cover asset costs
- • Achieve NERSA-compliant 60% gross margin
- • Optimal BESS:PV ratio of 1.13:1
Target Outcome
Transform current bulk supply cost from R10.1M/month to a blended cost of R4.0M/month — achieving the 60% gross profit margin prescribed by NERSA for sustainable municipal electricity trading.
Debt Suspense Account Concession
Authorization for DBNLM to place historical Eskom debt in a Suspense Account, enabling debt reduction through proceeds generated from the municipality's sale of stored BESS energy under the Eskom Virtual Wheeling program.
9-Month Grace Window
A 9-month implementation window for DBNLM to complete deployment of all planned PV Distributed Energy Resources, allowing the municipality to achieve the required bulk supply cost reduction.
Expected Outcome Upon Approval
- Bulk supply cost reduced from R10M to R4M/month (60% reduction)
- Gross profit margin aligned with NERSA 60% target
- Historical debt systematically reduced through energy credits
- Constitutional service delivery mandate restored
- First replicable national model for municipal financial recovery
Explore the detailed analysis in the following tabs to understand the full scope of the challenge and proposed solution.