Agri SA comments: Methodology for determining electricity tariffs and prices
[{“type”:”text”,”content”:”#### IntroductionnnAgri SA would like to thank you for the opportunity to comment on the consultation paper on the methodology for the determination of tariffs and prices in the electricity as released by Nersa in June. nnWe set out herein Agri SAu2019s comments to the methodology as well as our recommendations in respect thereof (where relevant). You are reminded that Agri SA is the largest federation of agricultural organisations. Our mission is to promote agriculture in South Africa to encourage its development and to make it more profitable, stable and sustainable. Agriculture is the cornerstone of the South African economy. nnThe agricultural sector is highly reliant on electricity as an energy source, particularly when you consider the irrigation-orientated nature of production practices. Given the perishable nature of a variety of products, our interest in electricity includes upstream activities and, more specifically, the proper operation of the cold chain. nnIncorporated in the agricultural sector is a prominent focus on the livelihood of approximately 21% of the national agrarian labour force.nFor at least 25% of the total agricultural production, electricity is a dominant input u2013 about 10%-20% of variable costs u2013 thus a prominent determinant of profitability in the sector. nnAgri SA submits this commentary given that the exercise has a significant impact, subsequently, on the financial well-being of the local agricultural sector. nnOur following commentary on the proposed methodology aims to secure the financial survival of inter alia Eskom on the one hand and promote a sustainable and financially sound agricultural sector. We wish to also note that we align our commentary to that of our affiliates, particularly those of Agri Eastern Cape, Agri Western Cape and Agri Mpumalanga, who all have made submissions in detail, respectively.”,”position”:0,”id”:”xKmcFif5eqI9RCjO”}]