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Apart from providing for a new transmission system operator and competitive multi-market structure in the electricity supply industry, the newly published Electricity Regulation Amendment Bill also gives more clarity about energy regulator Nersa’s role and expands its mandate and some of its powers.
During his State of the Nation address on Thursday (February 10), President Cyril Ramaphosa described the current electricity supply crisis as "one of the greatest threats to economic and social progress."
He said there is a shortfall of around 4 000 megawatts (MW), even though Eskom has repeatedly put it at as much as 6 000 MW.
It was published in the Government Gazette on the same day, kicking off a 30-day comment period.
The bill provides for the establishment of a transmission system operator and describes its functions while also describing the new market structure.
In addition, it makes several changes to the way Nersa operates.
This includes giving it powers to not only mediate but to also provide binding decisions in disputes among licencees and between licencees and customers or end-users through arbitration.
Over and above issuing licences for generation, transmission, distribution, import, export, and trading of electricity, it will also license system operator/s and reticulation.
If the bill is adopted as is, the minister of mineral resources and energy may ask Nersa to determine a tariff for the contemplated energy - or to set a maximum or guideline price - before issuing a determination for additional generation capacity, or thereafter but before procuring it.
The high level of tariffs agreed upon in the first number of bid rounds has been widely criticised, but Eskom is saddled with those tariffs for the duration of the 20-year power purchase agreement (PPA).
The bill further states that in determining tariffs, Nersa must take into account all planned projects in the Integrated Resource Plan and Transmission Development Plan insofar as it will impact the licensee’s cost during the tariff period.
In the case of direct supply agreements between a licensed generator and its customer, there is no need to get Nersa’s approval for the tariffs the parties have agreed upon.
For more on this story: https://www.moneyweb.co.za/news/south-africa/electricity-amendment-bill-gives-nersa-more-powers/
