ELECTRICITY REGULATION BILL PRESENTATION TO THE MINERALS AND ENERGY PORTFOLIO COMMITTEE ESKOM HOLDIN

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ELECTRICITY REGULATION BILLPRESENTATION TO THE
MINERALS AND ENERGY PORTFOLIO COMMITTEEESKOM
HOLDINGS LIMITED1 NOVEMBER 2005
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Electricity Regulation Bill

• Content
• Introduction
• Objectives of regulation
• Role clarity
• Allocation of powers
• Transparent criteria
• Impact on EDI restructuring

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Introduction

• Critical legislation for the Electricity Supply
  Industry
• An imperative to get it right as electricity
  underpins the economy as, among others, it seeks
  to stimulate growth and development
• Bill is not only about electricity but
• Delivery of service
• Security of supply
• Economic growth
• The Purpose of presentation is to enrich the
  process of formulating the new Bill as well as
  highlight key industry issues.

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Objective of Regulation

• A regulatory framework should create
• Stability and predictability
• Efficiency
• Transparency
• Fairness
• Effective and balanced oversight
• The Bill should therefore be assessed against
  these criteria

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Role clarity

• One of the cornerstones of an effective
  regulatory framework is the clarity of roles of
  institutions
• For the above reasons it is important that the
  roles of the Minister and Regulator are further
  clarified through redrafting. The roles are not
  clear in many instances, such as
• Allocation of powers
• Energy/Electricity planning
• New capacity
• Use of fuel types

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Allocation of powers

• The Minister is granted powers that should be
  that of the Regulator
• Prescribing requirements for licensing (47(4))
• Form and manner of licences (11(3))
• The Regulator, on the other hand, is granted
  powers that go beyond that which is necessary for
  effective regulation
• Format and contents of agreement (15(1)(f))
• Health and safety (15(1)(s))
• Business practice and ethics
• Planning and emergency plans (15(1)(h))

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Transparent criteria

• There is no obligation on the Regulator to
  develop and publish criteria as to how it would
  consider certain matters
• Application for licences
• Pricing (including the process to consider
  pricing adjustments)
• Other matters

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Impact on EDI Restructuring

• Although chapter IV has been removed, section 7
  states that chapter III does not apply to
  reticulation
• This is premature and we therefore suggest that
  it be removed
• Critical issue Can an effective framework be
  created without-
• regulatory oversight over local authorities
• a mechanism to facilitate EDI restructuring
• This is a huge gap in the proposed legislation

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• Thank you