The cabinet approved a draft policy to reform the pricing of electricity at its latest meeting this week, as well as another to further South Africa’s electricity system from a state-controlled system to a competitive market.Minister in the Presidency Khumbudzo Ntshavheni said the cabinet approved the publication of the Revised Electricity Pricing Policy and the draft electricity sector market transformation position paper for public comment. “The policy updates the 2008 Electricity Pricing Policy to reflect developments in the electricity supply industry, including market reforms arising from the unbundling of Eskom and the implementation of the Electricity Regulation Amendment Act,” she said.“The policy strengthens the regulatory framework governing electricity prices, tariffs and charges, and provides tariff transparency through the unbundling of tariffs across generation, transmission, distribution and retail activities, thus consolidating regulatory arrangements for electricity pricing across the various pricing interfaces between generators, traders, the National Transmission Company South Africa (NTCSA) and distributors.” The announcement comes at a time when electricity tariffs as a driver of household and business energy costs have come to a head, with the National Energy Regulator of South Africa (Nersa) approving an 8.76% tariff increase for direct Eskom customers and 9.01% for municipal distributors.Ntshavheni said the policy establishes the framework through which these interfaces will be enabled and regulated by Nersa. The policy supports the introduction of cost-reflective tariffs while protecting vulnerable users and strategic economic sectors, she said.She said the draft position paper proposed reforms to improve energy security and reliability by reducing reliance on a single electricity supplier and enabling greater participation in electricity generation and trading. “The position paper provides a framework to guide South Africa’s transition from a predominantly state-controlled electricity system to a more competitive electricity market, in line with the Electricity Regulation Amendment Act and the Energy Action Plan.“The reforms are also aimed at attracting investment in electricity generation, transmission and distribution infrastructure, supporting job creation and economic growth, and reducing electricity costs over the long term.”Business Times