Parliament, Friday, 15 March 2024 – The Chairperson of the Portfolio Committee on Mineral Resources and Energy, Mr Sahlulele Luzipo, has welcomed the passing of the Electricity Regulations and Amendment (ERA) Bill yesterday by the National Assembly (NA).
Mr Luzipo said that the Bill is a product of the collective wisdom of everyone who participated in the process, including the public hearings held in all nine provinces and those who made written submissions. The provincial public hearings were held from 26 September 2023 to 29 January 2024 and the majority of those who participated supported the Bill.
The Bill seeks to amend the Electricity Regulation Act of 2006 and once enacted into law, it will enable the transformation of the country’s electricity sector to ensure electricity sustainability, supply and affordability. It proposes an end to the monopoly-driven market and allows competition through key legislative reforms. This move is underscored in the Department of Public Enterprises’ 2019 Roadmap for Eskom in a Reformed Electricity Supply Industry. The Bill, however, does not propose the privatisation of Eskom, which the majority of participants in the public hearings said they opposed.
Furthermore, the Bill proposes the establishment, within five years, of a state-owned Transmission System Operator (TSO) that is legally distinct from Eskom; the expansion and alignment of the powers of the National Energy Regulator of South Africa (NERSA) to regulate the competitive market and the empowerment of NERSA to set and approve tariffs and prices, as well as regulate the participation of independent power producers (IPPs); among other things.
In the interim, it authorises a ring-fenced subsidiary of Eskom Holdings in the form of the National Transmission Company of South Africa, or NTCSA, to fulfil the functions of the TSO. The TSO is an enabler of the competitive market. Therefore, the functions of the TSO are grid ownership and operation, system operation, market operation, and the creation of a Central Purchasing Agency that will take care of the legacy and vesting contracts.
Mr Luzipo said: “I am happy that the NA has passed the Bill that is responding to the people’s concerns about the need for setting parameters on the competitive behaviour of IPPs, as this will ensure that the sector delivers sustainable electricity at competitive prices.”
According to Mr Luzipo, this is important, not only for competition but also because it addresses global commitments around climate change issues with regards to the country’s transition within the context of the Just Energy Transition framework. This is because the participation of multiple players will result in diverse electricity generation technologies, such as renewable energy.
“It is anticipated that, in the long term, the Bill will drive down the cost of electricity generation, which will be passed on to consumers in the form of lower electricity bills. Further, new investment in the industry will bring new technologies and multi-year capital programmes that will enable new local industries and local businesses to empower youth and create new-age skills and digital capabilities because individuals who generate electricity for their use will be allowed to sell surplus to the government,” said Mr Luzipo.
The ERA Bill criminalises the unlawful destruction and damage of electricity infrastructure inclusive of transmission, distribution or generation equipment or infrastructure. This provision ensures that cable theft and unlawful electricity damage, amongst other things, are decisively addressed. The Bill states that if a person is convicted of these offences, a fine not exceeding R1 million will be imposed. If a person is found guilty of unlawful trading of the electricity infrastructure as listed above, a fine not exceeding R5 million will be charged, or imprisonment not exceeding 10 years, or both such a fine and imprisonment.
Lastly, Mr Luzipo said that the committee intended for the Bill to not only address the immediate electricity challenges and load-shedding but also to enable long-term electricity supply for businesses and the broader society. He thanked all political parties that supported the Bill in the NA and for putting the interest of the country and its citizens ahead of their political interests in the forthcoming elections. He also thanked members of the committee and the staff for their dedication.
ISSUED BY THE PARLIAMENTARY COMMUNICATION SERVICES ON BEHALF OF THE CHAIRPERSON OF THE PORTFOLIO COMMITTEE ON MINERAL RESOURCES AND ENERGY, MR SAHLULELE LUZIPO.
For media enquiries or interviews with the Chairperson, please contact the committee’s Media Officer:
Name: Mr Justice Molafo
Tel: 021 403 8444
Cell: 081 424 748
Email: jmolafo@parliament.gov.za
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