Cape Town, South Africa — 08 March 2012 – The future price path of South African national power utility Eskom Holdings will take the economy’s future competitiveness into account, according to deputy president Kgalema Motlanthe.
Citing Sapa, Fin24 quotes him as telling the National Council of Provinces that this would be based on economically sustainable electricity tariffs that balance macro-economic and socio-political impacts.
Replying to questions, the deputy president said it was important for the price path to provide regulatory certainty crucial for investment in the power sector.
“Once the price path has been outlined, there will be certainty for the next 20 years regarding future electricity tariffs, as opposed to the current practice where tariffs are determined every three years,” he added.
The government was considering introducing a number of mechanisms that would ensure tariffs did not escalate in a manner that had an adverse impact on economic growth and job creation.
An interdepartmental team had been established to consider the best approach for determining the next round of electricity tariff increases for Eskom, due to take effect from April 2013.
This involved developing a model that sought to balance the socio-economic impact of increasing electricity prices, the country’s competitiveness, Eskom’s financial viability, and the necessary policy considerations for implementing the integrated resource plan, Motlanthe said.
Source: Fin24. For full item, click here.