The national transmission company that will enable a competitive electricity market could start trading as an independent subsidiary by November.
Officials from the department of public enterprises told parliament’s select committee on public enterprises & communication, that now that the energy regulator has approved the three licences (transmission, trading and import & export) needed for the transmission company to be operationalised, it could start trading by November.
They were giving an update on progress with the restructuring of Eskom into separate entities for transmission, generation and distribution. The launch date of the transmission company depends on finalising agreements with Eskom’s lenders and the appointment of a board in the next two months.
Public enterprises minister Pravin Gordhan told parliament on Monday the department wants Eskom to speed up its internal processes to get the transmission company up and running.
“When we reviewed the progress, we brought to the attention of the board of Eskom that we believe the timelines their internal teams are working on are far too elongated, and seem too lack urgency and the necessary drive to complete as many processes as possible during this administration,” Gordhan said.
“We are trying to work with the Eskom team to ensure there is [an] appropriate level of urgency,” he added.
Eskom told Business Day earlier this week that formal lender consent has been requested from all lenders. “[There are] ongoing interventions between lenders and Eskom to address lender concerns. It is an ongoing process and depends on the lender’s own internal processes,” it said.
Board appointments
According to the department the lender consent process is at an “advanced stage” and it anticipates conclusion by end-September. The department is also in the final stages of finalising board appointments for the transmission company.
In response to questions from the committee Gordhan said there will be no job losses at Eskom due to the restructuring. He assured the committee the restructuring is not a precursor to privatisations.
“[We] have no intention to privatise Eskom. We do [have] every intention to crowd in private sector investment in different areas of the energy system, but [it] does not mean that Eskom (and by extension government) won’t retain 100% ownership of the transmission, generation and distribution companies,” he said.
Gordhan highlighted the importance of finalising the Electricity Regulation Amendment Bill, which was tabled in parliament in August, almost five months after it was approved by the cabinet. Chief director Donald Nkadimeng said for the transmission company to assume the role of transmission system operator the bill needs to be passed.
The bill will provide transitional measures for the creation of an independent transmission system operator and create a “buying office” that can purchase electricity from the cheapest possible source.
The functions of the operator also include providing access to the transmission network on a nondiscriminatory basis and a national framework for wheeling — the distribution of electricity between private players. The bill needs to be in place for the provision of an electricity trading platform on a multimarket basis.
Business Day previously reported that despite the urgency of getting the bill passed, parliament is unlikely to complete its deliberations before year end. Sahlulele Luzip, chair of the mineral resources & energy committee, said given the high level of interest in the bill, public participation processes will take until December 3, after which the committee would still need to deliberate on it.
With Linda Ensor
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