Why Eskom’s tariffs need to be raised as high as they do

Business Day Live 7 December 2012.

THE tariff application which Eskom has submitted to the National Energy Regulator of SA (Nersa) is the product of a careful balancing act and it touches on some choices that are for SA to make, rather than for Eskom alone.

A secure supply of electricity is essential if SA’s economy is to grow and develop, and that can be assured only if Eskom and the electricity industry are financially sustainable, which means tariffs must reach a level where they cover the full cost of supplying electricity. At the same time, however, our application has had to take cognisance of the effects of tariff increases on the economy and particularly on poor households…

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