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Dr Miriam Altman, Executive Director of the Centre for Poverty, Employment and Growth at the HSRC, welcomes the decision made by the National Energy Regulator of South Africa (Nersa) on electricity pricing. The ruling is consistent with the findings in the HSRC modelling work that was done on electricity pricing. It is seen to be the right step in moving towards cost recovery from industry and high income households, at a pace that will not excessively damage either Eskom nor the economy. Dr Altman delivered a presentation, compiled with support from energy management experts WSP Consulting Engineers, at the recent public hearings regarding Eskom's proposed 53% tariff increase. The HSRC study looked at the potential impact that different pricing approaches might have on Eskom and the economy. It recommended that the electricity price be raised by 100%, phase in over four years. It was further recommended that DSM be managed outside of Eskom, ideally through the introduction of tax and cash incentives for energy efficiency. It was further recommended that the National Treasury spread its R 60 billion loan to Eskom so that at least R 3 to 4 billion more is allocated in 2008/9. The submissions made to Nersa are attached here. Nersa's final determination was announced on 18 June 2008 and entails a 13.3% price increase from 1 July 2008, in addition to the 14.2% increase granted from 1 April 2008. This amounts to an overall average tariff increase of 27.5% in 2008/09. It is now urgent that attention be devoted to the impact of this ruling on poor households, to ensure they are not adversely affected. Herewith a copy of the HSRC study, as well as a summary drawn from the presentation made by Dr Altman during the hearing: Please direct enquiries to Miriam Altman on cel 082 856 4001, or e-mail, altmanm@mweb.co.za
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