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Portfolio Committee on Minerals and Energy

Portfolio Committee on Minerals and Energy. Electricity Regulation Amendment Bill B020 -2006 11 October 2006. OVERVIEW. BACKGROUND OF AMEU ISSUES ON THE ERA BILL DISTRIBUTION & RETICULATION CONCLUSIONS RECOMMENDATION. AMEU. Established 1915 Municipality is member

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Portfolio Committee on Minerals and Energy

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  1. Portfolio Committee on Minerals and Energy Electricity Regulation Amendment Bill B020 -2006 11 October 2006

  2. OVERVIEW • BACKGROUND OF AMEU • ISSUES ON THE ERA BILL • DISTRIBUTION & RETICULATION • CONCLUSIONS • RECOMMENDATION

  3. AMEU • Established 1915 • Municipality is member • Councillor and Engineer representatives • Technical support to SALGA • Involved in EDI restructuring since 1992 • Support for May 2001 `6 REDs’ model in national interest

  4. ISSUES ON ERA BILL • Definition of Reticulation • Effectively means `domestic end user’ • Consumes less than 5 GWh per annum • Raises the questions: • Who is the service authority for customers > 5 GWh per annum? • Will they pay different tariffs in the same area whilst fed from the same distribution network? • Who will own and maintain these networks that supply customers > 5 GWh per annum?

  5. ISSUES ON ERA BILL • Conclusion • the definition limiting reticulation to a class of consumers is impractical to implement

  6. DISTRIBUTION & RETICULATION • Distribution is synonymous with Reticulation as per Schedule 4 Part B of the constitution. • Refers to wires and other related services downstream from Transmission i.e. equal to and below 132 kV • Although the Bill should recognise the distinction between wires and retail, it should not attempt to separate the two in the absence of a competitive environment e.g. introduction of WEPS. • AMEU acknowledges that Municipalities are service authorities. • Munics may opt to use REDs in the future as service providers as per MSA. In that case it must enter into SDA with the RED & should have the first option to intervene in the case of non-compliance by the RED.

  7. CONCLUSIONS • The AMEU does not believe that it was Government’s intention to reduce the effectiveness and efficiency of NERSA in regulating the whole electricity supply industry. • Difficult to see how NERSA will perform the task of monitoring and regulating the performance of municipalities in complying with the proposed Act. • The definition of “reticulation” as per the Bill removes the benefits of economic regulation & cross subsidy from a considerable number of electricity distribution customers in South Africa. • The proliferation of tariffs will continue.

  8. RECOMMENDATION • Recommend that the Bill in its current form be re-visited to take into account the following issues: • Definition of reticulation • Regulation

  9. Thank you

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