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Eskom tariffs to take in SA economic needs

Mar 08 2012 15:23 Sapa

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Parliament - Eskom's future "price path" will take the economy's competitiveness into account, Deputy President Kgalema Motlanthe said on Thursday.

This would be based on economically sustainable electricity tariffs that balance macroeconomic and sociopolitical impacts, he told the National Council of Provinces.

Replying to questions, he 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."

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 socioeconomic 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.
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