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Expert opinion on bundled tariff proposal

Genesis was commissioned to assist Sasol Oil in assessing and responding to the bundled tariff proposal made to the National Energy Regulator of South Africa (NERSA) by Transnet.

The proposal represented a regulatory shift from disaggregated pipeline tariffs to a single, aggregated tariff across all pipelines and pipeline systems.

The team assisted by providing expert economic analysis and testimony at two public hearings in 2010 and 2011. Our input focused on the impact of a rolled-in tariff on potential investment in pipeline infrastructure.

The team also focused on other aspects of the tariff-setting methodology, such as the proposed revenue allowance estimate involved in calculating the new tariff.

Following economic and legal inputs from a number of interested parties, NERSA ultimately allowed the aggregated tariff approach, reducing the impact of a large investment in a local pipeline.

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