This application provides an interactive guide to the National Energy Regulator of South Africa (NERSA) Cost of Supply (CoS) framework, designed to help municipal officials develop fair, transparent, and cost-reflective electricity tariffs.
★Economic Efficiency
Promotes tariffs that signal the true economic cost of providing electricity.
✎Equity and Fairness
Ensures customers pay their fair share, preventing cross-subsidies.
💰Financial Sustainability
Allows municipalities to recover costs and ensure long-term network viability.
The 5-Step Framework
Click on each step below to explore its objectives. This interactive diagram simplifies the process from raw financial data to final, cost-reflective tariffs.
Step 1: Unbundling of Costs
Separate total costs into core electricity value chain functions.
Step 2: Functionalisation of Costs
Break down distribution costs into network and retail activities.
Step 3: Classification of Costs
Categorise costs by their primary driver (Energy, Demand, or Customer).
Step 4: Allocation of Costs
Assign the classified costs to specific customer categories.
Step 5: Tariff Design
Use the allocated costs to structure and set final tariffs.
Interactive Cost Allocation Model
Adjust the sliders to see how classifying costs impacts the final allocation to different customer classes, making the "cause and effect" of the framework clear.
Resources & Next Steps
Here is a simplified checklist of essential items and links to official resources to help your municipality get started on a Cost of Supply study.
Data Requirements Checklist
- ✓Audited Financial Statements
- ✓Fixed Asset Register (updated)
- ✓Bulk purchase invoices
- ✓Billed energy (kWh) and demand (kVA) data
- ✓Customer numbers per tariff category
Official Documentation
For a complete understanding, refer to the official framework document provided by NERSA.
Download NERSA CoS Framework PDFWelcome to Your Dashboard!
This is your personalized workspace for managing CoS studies and reports.
National Electricity Distribution Overview
High-level overview of electricity distribution metrics. Click to expand.