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City of Cape Town – Service Authority Role

City of Cape Town – Service Authority Role. Comments on the Electricity Regulation Amendment Bill [B20-2006]. Parliamentary Hearings Portfolio Committee on Minerals and Energy 10 & 11October 2006. Contents of Submission. Constitutional Obligations of Local Government

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City of Cape Town – Service Authority Role

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  1. City of Cape Town – Service Authority Role Comments on the Electricity Regulation Amendment Bill [B20-2006] Parliamentary Hearings Portfolio Committee on Minerals and Energy 10 & 11October 2006

  2. Contents of Submission • Constitutional Obligations of Local Government • Constitutional Obligations of National & Provincial Government • Developmental Role of Local Government • Service Authority Role of Local Government

  3. Constitutional Obligation on Local Government A municipality has executive authority in respect of, and has the right to administer- • The local government matters listed in Part B of Schedule 4 and Part B of Schedule 5[1] • Schedule 4, Part B refers to “Electricity and Gas Reticulation” What is meant by “Electricity & Gas Reticulation”? The Constitution does not explain, but the Structures Act does: A municipality has the powers and functions assigned to it in terms … of the Constitution[2]; When split between a district and a local municipality, the district has the following functions and powers … Bulk Supply of electricity, which includes for the purposes of such supply, the transmission, distribution and, where applicable, the generation of electricity.[3] [1] Section 156 (1) (a) of the Constitution of the Republic of South Africa, Act 108 of 1996 [2] Section 83 (1) of the Municipal Structures Act, Act 117 of 1998 [3] Section 84 (1) (c) of the Municipal Structures Act, Act 117 of 1998

  4. Constitutional Obligation on LG (cont.) What happens if there is an “external service provider”? … the municipality remains responsible for ensuring that that service is provided to the local community … [1] Where “local community” or “community” is defined as follows: In relation to a municipality, means that body of persons comprising - • The residents of the municipality; • The ratepayers of the municipality; • Any civic organisations and non-governmental, private sector or labour organisations or bodies which are involved in local affairs within the municipality; and • Visitors and other people residing outside the municipality who, because of their presence in the municipality, make use of services or facilities provided by the municipality, And includes, more specifically, the poor and other disadvantaged sections of such body of persons[2]. [1] Section 81 (1) of the Municipal Systems Act, Act 32 of 2000 [2] Section 1 of the Municipal Systems Act, Act 32 of 2000

  5. What is “Electricity Reticulation”? … Supply of electricity, which includes for the purposes of such supply, the transmission, distribution and, where applicable, the generation of electricity to residents of the municipality; ratepayers of the municipality; any civic organisations and non-governmental, private sector or labour organisations or bodies involved in local affairs; and visitors and other people residing outside the municipality who, because of their presence in the municipality, make use of services or facilities provided by the municipality, with special emphasis on the poor and other disadvantaged sections …

  6. Constitutional Obligation on National & Provincial Government • The national government and provincial governments, by legislative and other measures, must support and strengthen the capacity of municipalities to manage their own affairs, to exercise their powers and to perform their functions[1] White Paper on Local Governmentanticipated that, in most instances: • the regulation of municipal executive authority (S155 (7) of the Constitution) would be sufficient to ensure that municipal functions are effectively performed. • Where intervention is required, the level of intervention needs to be appropriate to context, ranging from support and advice through issuing directive for specific actions. • These procedures would precede any assumption of executive authority for a municipal function by another sphere of government, and • obviously this kind of intervention/stripping of powers and functions allocated in terms of the Constitution would only be applicable as a measure of last resort, where the problem cannot be resolved through ordinary intergovernmental processes. [2] [1] Section 154 (1) of the Constitution of the Republic of South Africa, Act 108 of 1996 [2] Various extracts from page 45 of White Paper on Local Government, Part C: Co-operative Government

  7. Developmental Role of Local Government A municipality must structure and manage its administration and budgeting and planning processes to give priority to the basic needs of the community, and to promote the social and economic development of the community. [1] • There are usually better prospects for development in all areas if certain national norms & standards are introduced – possibly regulated through licensing • Fine act of balancing social services funded out of limited economic services; • Funding regulation tightened through Municipal Fiscal; Powers and Functions Bill – which covers • Municipal Surcharge; • Municipal base tariff for electricity Clear synergies (and possible overlaps) between Electricity Regulation Amendment Bill and Municipal Fiscal Powers and Functions Bill ALIGNMENT? [1] Section 153 (a) of the Constitution of the Republic of South Africa, Act 108 of 1996

  8. Service Authority Role of Local Government The responsibilities of the Service Authority are outlined as follows: • regulating the provision of the service in terms of agreed performance indicators and an approved performance management system; • management of the contract for the delivery of the service (Service Delivery Agreement); • performing its functions and exercising its powers in terms of Ch 5 of the Municipal Systems Act (chapter dealing with IDP); • controlling the setting and adjustment of tariffs within a tariff policy determined by the municipal council; • exercise service authority (executive authority, per the Constitution) so as to ensure uninterrupted delivery of the service in the best interest of the local community.[1] [1] Section 81 (1) (a) – (e) of the Municipal Systems Act, Act 32 of 2000

  9. Recommendation & Proposed Way Forward In light of the Constitutional roles and responsibilities All spheres of government and all organs of state within each sphere must: • respect the constitutional status, institutions, powers and functions of government in the other spheres[1] • not assume any power or function except those conferred on them in terms of the Constitution[2]; • must exercise their powers and perform their functions in a manner that does not encroach on the geographical, functional or institutional integrity of government in another sphere[3]; • must co-operate with one another in mutual trust and good faith by, inter alia, assisting and supporting one another[4]. our proposed way forward is as follows: [1] Section 41 (1) (e) of the Constitution of the Republic of South Africa, Act 108 of 1996 [2] Section 41 (1) (f) of the Constitution of the Republic of South Africa, Act 108 of 1996 [3] Section 41 (1) (g) of the Constitution of the Republic of South Africa, Act 108 of 1996 [4] Section 41 (1) (h) (ii) of the Constitution of the Republic of South Africa, Act 108 of 1996

  10. Recommendation & Proposed Way Forward (cont.) When considering Section 155 of the Constitution National government … and the provincial governments have the legislative and executive authority to see to the effective performance by municipalities of their functions … by regulating the exercise by municipalities of their executive authority …[1] • The objective of this Bill be clearly articulated to determine: • exactly what issues related to electricity service will be regulated; • whether both the Service Authority and the Service Provider are to be regulated; • the role of the South African National Energy Regulator in setting national service standards; • the purpose and extent of licensing ; and • the extent of compliance and synergy with other legislation, particularly local government legislation. [1] Section 155 (7) of the Constitution of the Republic of South Africa, Act 108 of 1996

  11. Recommendation & Proposed Way Forward (cont.) • It is further proposed that: • a joint working group of officials from the Departments of Minerals and Energy (DME), Provincial and Local Government (dplg), National Treasury and local government, as well as any other interested stakeholders, redraft the Bill within a given timeframe; • this redrafted Amendment Bill must be submitted to a combined sitting of the Minerals and Energy, Finance and Local Government Parliamentary Committees for consideration.

  12. Presentation prepared by: Louise Muller Conclusion Let us work togetherfor a better city EnkosiThank youDankie

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