ELECTRICITY REGULATION AMENDMENT ACT JOINS STATUTE BOOKS

ELECTRICITY REGULATION AMENDMENT ACT JOINS STATUTE BOOKS

• 17 August 2024
• New Legislation
• SA Legal Academy

Please note: On 20 August 2024, the Act was gazetted. It is not yet in force.

The Presidency issued a media statement well after close of business on 16 August 2024 announcing that the Electricity Regulation Amendment Bill’s ‘B’ version has been signed into law. At the time of writing, it had yet to be gazetted. However, since the Bill’s clause 33 provides that the new Act will come into operation on ‘a date determined by the President’, it seems unlikely that it is already in force. As soon as there is more clarity, this report will be updated.

Meanwhile, among other things the media statement notes that, once in force, the new piece of legislation will:

• establish the Transmission System Operator SOC Ltd as an independent company and ‘custodian of the national grid’ (this should take place ‘within five years’ of the Act’s commencement)
• enable the National Transmission Company of South Africa to serve as an ‘interim’ transmission system operator
• provide for ‘an open market platform’ that facilitates the ‘competitive, wholesale or retail buying and selling of electricity’
• make ‘market operation … a new activity … licensed by the National Energy Regulator of South Africa (NERSA)’
• require the development of a ‘market code’ establishing rules to govern the competitive market envisaged
• prescribe ‘the process through which the code will be approved’
• set out principles underpinning ‘the setting or approval of prices, charges and tariffs’
• require NERSA to consider ‘factors such as security of supply, the diversity of supply and the promotion of renewable energy’ when making interventions intended to:
  • ‘enable an efficient licensee to recover the full cost of the licensed activity’
  • ‘allow for a reasonable return proportionate to the risk of the licensed activity’, and
  • ‘provide for incentives for (the) continued improvement of technical and economic efficiency’, and
• ‘impose severe penalties for damage to and (the) sabotage of infrastructure’, namely:
  • ‘fines of up to R1m or five years in prison or both for persons who, among other offences, damage, remove or destroy any transmission, distribution or reticulation cable, equipment or infrastructure, and.
  • fines of up to R5m or 10 years in prison or both for ‘persons who unlawfully receive such cables, equipment or infrastructure’.

Overall, the Act is expected to:

• ‘respond to current realities in the electricity sector’
• ‘open up pathways to greater competition and reduced energy costs’,
• facilitate the ‘more rapid uptake of renewable energy sources’, and
• ‘increase investment in new generation capacity to achieve energy security’.

Noting that ‘access to the transmission and distribution power system must be objective, transparent and non-discriminatory’, the statement refers to provisions:

• ‘distinguish(ing) between tariffs … (to) be set or approved by the regulator, such as network charges’, and those ‘subject to a direct supply agreement’ or arising ‘as an outcome of a competitive market’, and
• prohibiting the system operator from ‘discriminat(ing) between different generators or customers in relation to dispatching or balancing the system, except for objectively justifiable and identifiable reasons approved by the regulator’.

Please click the links below for more information:

• media statement
• Bill’s ‘B’ version

Published by SA Legal Academy Policy Watch

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