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Electricity Regulation Amendment Bill

ENERGY INTENSIVE USERS GROUP SOUTH AFRICA. Electricity Regulation Amendment Bill Presentation to the Portfolio Committee on Minerals and Energy 10 October 2006 Ian Morison EIUG Chairperson. Membership of the EIUG. Voluntary Association of Large Industrial Electrical Energy Users

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Electricity Regulation Amendment Bill

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  1. ENERGY INTENSIVE USERS GROUP SOUTH AFRICA Electricity Regulation Amendment Bill Presentation to the Portfolio Committee on Minerals and Energy 10 October 2006 Ian Morison EIUG Chairperson

  2. Membership of the EIUG • Voluntary Association of Large Industrial Electrical Energy Users • Membership open to end users who operate sites consuming in excess of 100 GWh/a • Mainly involved in mining, minerals beneficiation and heavy industry • Members consume 40% of electricity sold in South Africa

  3. EIUG Position on REDs • Financially viable and sustainable • Provide excellent service and reliable quality of supply • Undertake electrification roll-out • Public not municipal entities • Regulated by NERSA

  4. Getting to REDs • It is a national imperative to implement REDs urgently • REDs implementation (Blueprint Model) requires a change to the Constitution • If not possible, then a compromise is necessary which will lead to a sub-optimal model • Our comments on the Amendment Bill are made in this context

  5. Electricity Regulation Amendment Bill • Definition of ‘reticulation’ (Section 1) is unworkable • Impracticable for two suppliers to operate over same electrical system • Severe ownership, operational and safety implications • Proposal • Define ‘reticulation’ as ‘retail to community customers’ • Municipalities can either • retail to customers below 5 GWh/annum • enter into Service Delivery Agreement with RED • Wires network under RED ownership and operation

  6. Electricity Regulation Amendment Bill • Dual regulation (Minister and NERSA) is unworkable (Section 31) • Conflicting responsibilities and resultant uncertainty • NERSA has successfully regulated municipalities for more than 10 years • Proposal: • NERSA must regulate entire industry • In line with Constitution • In line with International Practice

  7. Electricity Regulation Amendment Bill • Definition of ‘Domestic End User’ (Section 1(b)) is undesirable • Minister can change customer categories • Proposal • Change of customer category by legislation only

  8. Conclusion • EIUG does not support the Electricity Regulation Amendment Bill in its current form • Our proposed changes allow practical implementation of the Amendment Bill • A practical solution at municipal level is a prerequisite for getting to REDs • NERSA should regulate the entire industry under any model

  9. The EIUG expresses it’s appreciation for being able to make an input to decision making on the Electricity Regulation Amendment Bill Thank You for Your Attention

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