Department of Energy
The energy department has briefed the national assembly’s energy committee on the proposed amendments to the National Energy Regulator Act and the Electricity Regulation Act.
The National Energy Regulator Amendment Bill and the Electricity Regulation Second Amendment Bill were approved by cabinet towards the end of last year and published for comment in December 2011.
The National Energy Regulator Amendment Bill aims to:
• Approve the regulator’s decision-making process by establishing an appeal board
• Improve the governance and accountability of the regulator
• Improve the structure and working relations of the regulator
In essence, the proposed legislation seeks to set up a single regulator to regulate the electricity, piped-gas and petroleum pipeline industries.
The proposed legislation intends repealing or amending sections of the:
• Electricity Act of 1987
• Gas Act of 2001
• Gas Regulator Levies Act of 2002
• Petroleum Pipelines Act of 2003
In terms of the proposed appeal board, the department stressed that the regulator should not sit as a tribunal over its own decisions.
The existence of the appeal board would also help to attract private sector investment into the sector.
The Electricity Regulation Second Amendment Bill aims to:
• Ensure alignment between the different laws in place relating to the electricity industry
• Provide for efficient regulation of the different licensees
• Ensure speedy implementation of electricity infrastructure projects
• Provide for the efficient procurement of power from independent power producers
• Enhance regulation within the electricity industry
The proposed legislation aims to further strengthen the national regulatory framework for the local electricity supply industry.
The bill seeks to introduce the concept of “dispatch” into the scope of the act.
According to the bill, dispatching means the “scheduling, coordination and management of the flow of electricity produced by generation facilities into and out of the national transmission power system, including the start-up and shut-down of those facilities”.
The proposed legislation also aims to acknowledge the existence of independent power producers in the energy sector.
The bill will also seek to empower the minister to expropriate land for electricity infrastructure on behalf of a licence holder.
During the briefing, the department’s director general, Neliswe Magubane, pointed out that regulation in the energy sector was important to ensure “proper service delivery in a monopoly environment”.
Consumers also needed to be protected from high tariffs.
A key motivation for the proposed amendments was to ensure security of energy supply.
The department indicated that both bills will be sent to Nedlac for consultation after the public comment period has ended.
The director-general also declared that the Independent System and Market Operator (ISMO) Bill would now be certified by the state law advisor.
The state law advisor had advised the department earlier that the certification could not proceed until a report on the bill had been forwarded to the department from Nedlac.
The director-general informed members that she received the report on Monday this week.
It is anticipated that the ISMO bill will be tabled in Parliament within a month.
She also added that proposed legislation designed to ensure that the entire energy sector was regulated by NERSA would be tabled in Parliament this year.
Sabinet Cape Town Office
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