Historic ERA Bill to Transform South Africa’s Electricity Sector Passes National Assembly
The National Assembly has passed the Electricity Regulation Amendment (ERA) Bill with a clear majority vote on Thursday. This pivotal legislation, according to Mineral Resources and Energy Minister Gwede Mantashe, promises to “radically transform the structure of the electricity sector” for the greater good of South Africa.
The ERA Bill paves the way for significant changes within the power industry. It is set to introduce an open market platform for competitive electricity trading that is expected to have a profound impact on the economy. Additionally, it seeks to establish the Transmission Systems Operator (TSO), a pivotal institution charged with overseeing electricity transactions.
In an effort to bolster the system’s legal framework, the bill will enhance the regulatory powers of the National Energy Regulator of South Africa (NERSA). Accordingly, NERSA will be empowered to license parties involved in the competitive market, providing regulatory oversight throughout the transition towards this new free-market paradigm. To combat the rampant theft and vandalism plaguing electricity infrastructure, the ERA Bill will also introduce tougher offences and penalties.
Minister Mantashe, in his written remarks concerning the adoption of the bill, noted its significance, stating, “Notwithstanding the divergent views raised by the public on the introduction of a competitive market, the establishment of the TSO, and on offences and penalties for those who vandalise electricity infrastructure, we are of a firm view that the changes to the regulatory framework will radically transform the structure of the electricity sector for future generations.”
Mantashe highlighted the extensive democratic process that the bill underwent before reaching this decisive moment, emphasizing adherence to the foundational Batho Pele Principles which promote transparency and responsiveness in governance. “The Bill went through extensive consultations…including periods for public comments initiated by both the DMRE [Department of Mineral Resources and Energy] and Parliament,” Mantashe expounded. He also referenced the physical public hearings conducted by the Portfolio Committee on Mineral Resources and Energy (PCMRE) across all provinces, and the public’s substantial support shown for the bill’s amendments.
Addressing concerns raised by some members of the National Assembly pertaining to NERSA’s role, Mantashe backed the Portfolio Committee’s stance, citing, “Cognisant of the concerns raised by some members of this house regarding NERSA retaining the powers to ‘set and approve prices and tariffs’, we are in full support of the Portfolio Committee’s view that end-users need to be protected from possible price manipulation by market participants and therefore NERSA needs to retain the powers to intervene when necessary.”
The ERA Bill reflects one of the significant milestones achieved under the sixth administration. In Mantashe’s words, “We are, therefore, convinced that the adoption of this Bill will not only give effect to Eskom unbundling reforms but it will also encourage private sector participation in the electricity industry and thus introduce competition in the industry.”