Parliament’s mineral resources & energy committee is treating the long-awaited Electricity Regulation Amendment Bill as a priority, but it seems unlikely it will finalise its deliberations before the end of this year.
This emerged from a committee meeting on Wednesday after a briefing on the bill by an official of the department of mineral resources & energy, chief director of nuclear, electricity and gas policy Gift Nhlapo.
The delay in the formal submission of the bill to parliament caused an outcry by business as it is vital for the liberalisation of the energy market. The fear was expressed it would not be promulgated under the current government and would have to wait until after next year’s elections.
The bill will establish an independent transmission system operator that will allow for the impartial access of independent power producers on to the grid and for the crucial expansion of the constrained transmission network. It will accelerate the liberalisation of the energy market and provide a national framework for wheeling, which is the distribution of electricity between private players.
A delay in finalising the bill will delay the unbundling of Eskom into a separate transmission company.
Committee chair Sahlulele Luzipo recognised the urgency to process the bill, and said it would be a race against time. This would not be necessary if the bill had been tabled earlier. There was a high level of interest in the bill that added to the pressure, he said.
Adverts will go out shortly requesting public comment on the bill with 30 days being given for these submissions. Oral hearings will follow if they are requested. The committee will also conduct public hearings in four districts in each of the nine provinces. In terms of the committee’s provisional programme these processes will take until December 3, with no provision being given yet for the committee’s deliberations on the bill.
The National Assembly has a recess from September 29 to October 9 and rises for its December-January recess in early December.
Adding to the time pressure is that after adoption by the National Assembly the bill will have to be sent to the National Council of Provinces, which could hold its own public hearings and send the bill to the provincial legislatures.
The bill was published for public comments in February 2022 and approved by the cabinet in March this year.
Dealing with the bill, Nhlapo said it would cover establishment, duties, powers and functions of the transmission system operator and provide for an open market platform that would allow for competitive electricity trading. The period in which the National Energy Regulator of SA (Nersa) has to grant or refuse an application for a licence is reduced to 60 days from 120 days.
The regulator will be permitted in setting and approving tariffs to provide for licence conditions that allow for a reasonable return commensurate with the risk of the licensed activity, and may have regard to the need to ensure security of supply, the diversity of supply and to promote renewable energy.
The bill introduces clauses into the act to ensure that there will be no discrimination between different generators or customers in relation to dispatching or balancing the system except for objectively justifiable and identifiable reasons approved by the regulator.
Third party access to the transmission and distribution power system will be based on published tariffs and will be applicable to all eligible customers and applied objectively, without discrimination between system users. Access to the transmission and distribution system may only be refused where there is a lack of capacity. The operation of the system must be transparent, non-discriminatory and in line with market-based procedures.
Nhlapo stressed that in the move from a monopolistic model of electricity supply to a competitive one, measures are necessary “to ensure that third parties are not discriminated against and that they will be granted access to the transmission system operator’s transmission or distribution power systems”.
Deputy director-general for mining, mineral and energy policy development Ntokozo Ngcwabe said in reply to media questions the long-awaited integrated resource plan would be released in October. The plan projects future energy supply and demand, and allocates energy generation to the different sources of energy.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.