High cost of electricity straining households: Ramokgopa

Electricity Minister Dr Kgosientsho Ramokgopa says the high cost of electricity is undermining the competitiveness of industries and eroding the disposable income of households.

Ramokgopa says he is convinced that the revised electricity pricing policy will help address the hidden costs associated with electricity prices and reduce the burden on consumers.

The minister was addressing the media in Pretoria on the new measures that will be published for public comment on Friday.

Ramokgopa says the current electricity policy introduced 17 years ago has become outdated because household consumption has changed dramatically.

The minister says since 2007 when the policy was first introduced, electricity prices have jumped by 907% while in the same period inflation increased by 150%.

He says with this revised policy they want to create certainty on the future price of electricity for the next 10 years.

“So, we want to establish what we call the tariff path.

So, we want everyone to have some degree of certainty on what the cost of electricity will be, not just today, tomorrow, not only in three years’ time or five years’ time.

We want to create a 10-year horizon.

And it is for this reason that as part of this electricity pricing policy, NERSA will be required to publish a 10-year price forecast,” says Ramokgopa.

The ministers update comes as households grapple with the latest electricity tariff increase implemented in July.

Energy expert Chris Yelland says there is too much being promised to too many people.

“So, for example, another area that the minister focused on was expanding the special pricing agreements with the entire smelting industry.

At the moment, this special load tariff of 62 cents per kilowatt hour, which is well below cost, is only being offered to two companies, two smelting companies.