Does South Africa need a cost reflective tariff?
For years, low electricity costs have been a driver behind South Africa’s economic growth and our competitiveness as a nation. Now, sharply rising electricity tariffs are beginning to have a significant impact on our country’s economic sustainability.
Based on most of the comments on Eskom’s tariff application given at the NERSA public hearings in January 2013, general consensus seems to be that tariff adjustments should be kept to a minimum.
Short term measures to keep tariffs low may however have significant long term implications for sustainable electricity supply. Addressing the risk of long term electricity supply shortfalls is of paramount importance, but the question is whether it can be done in a socially and economically responsible manner.
How do we find a balance between keeping electricity prices to a minimum and simultaneously ensuring continued investment in infrastructure? Are cost reflective tariffs a necessity for security of supply?
Download the article . . . . Demystifying Tariff Setting
If you have any questions or would like to have a more detailed conversation around the tariff conundrum, Shamal Sivasanker (Deloitte Southern Africa Infrastructure and Power Leader) and Daryl Elliott (Executive Lead: Strategy and Innovation at Deloitte Southern Africa) would love to chat with you. You can contact Shamal at email@example.com and Daryl at firstname.lastname@example.org
We welcome you to subscribe to the Deloitte newsletter where we introduce Deloitte thought ware prepared by our industry and subject matter specialists on a weekly basis.