The process to operationalise the National Transmission Company of SA (NTCSA) has crossed one of the final hurdles after Eskom secured bondholder consent from the last of eight affected lenders last week.
This is an important step, said electricity minister Kgosientsho Ramokgopa on Monday, in the restructuring of Eskom’s transmission division into a stand-alone entity and the establishment of the NTCSA, which allows for the liberalisation of the electricity trading market in SA.
The NTCSA has already been granted transmission, trading and export licences by the national energy regulator. Its inaugural board, chaired by Priscillah Mabelane, was appointed in January, which left securing lender consent as the main remaining condition for operationalising.
Eskom has previously said that it expected the NTCSA to begin operating from April 1.
Addressing the media on Monday, Ramokgopa said the separation of transmission into an independent subsidiary of Eskom “will remake the electricity landscape in SA”.
This will primarily be achieved through the implementation of the Electricity Regulation Amendments (ERA) Bill, which was recently approved by the National Assembly.
The amendments to the bill will provide a legal framework for setting up and operationalising the transmission company and later the transmission system operator (TSO).
First, the NTCSA will function as an interim facility taking on the roles of the TSO.
The TSO, which must be set up within five years after the ERA Bill has been signed into law, “will ensure all electricity producers are treated equally and fairly and allowed access to the grid”, said Ramokgopa.
It will enable the setting up of a market platform through which electricity can be bought and sold by multiple buyers and sellers.
The establishment of the TSO will also insulate the trading platform from Eskom’s generation interests, thus removing the conflict of interest where Eskom is both a generator, owner and operator of a monopoly transmission grid.
The benefits to SA consumers, said Ramokgopa, would include lower electricity prices. “Through the introduction of competition, and moving away from Eskom dominance, buyers will be able to procure from the seller offering lowest prices.”
The ERA Bill now sits with the National Council of Provinces (NCOP), which has invited the public to submit written comments before April 29. Time is running out for the bill to be passed by the NCOP and then signed into law by the president before the May general elections.
Because it is a section 76 bill that affects provinces, it must be considered in the NCOP. Before provincial delegations vote on the bill in the NCOP, it must be discussed by each provincial legislature, which may hold public hearings.
However, Ramokgopa said the state and the legislature had agreed to prioritise the ERA Bill as one of the priority pieces of legislation. “We want to see it approved before the end of the sixth parliament in May and we are confident we will see it pass through the NCOP [in time for this],” he said.
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