Ramaphosa Signs Electricity Regulation Amendment Act into Law

by Selinda Phenyo
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By Phenyo Selinda

President Cyril Ramaphosa has signed the Electricity Regulation Amendment Act into law, a move that signals a significant overhaul of South Africa’s electricity sector. This legislation, which amends the 2006 Electricity Regulation Act, lays the foundation for establishing a competitive electricity market and sets the stage for substantial reforms aimed at addressing the country’s ongoing energy challenges.

According to the Presidency, the newly enacted law introduces several key changes. It opens the door to greater competition within the electricity sector, aiming to reduce energy costs and attract increased investment in new generation capacity. This is expected to enhance energy security across the nation.

One of the major reforms brought about by this Act is the unbundling of Eskom’s transmission functions. The law mandates the creation of the Transmission System Operator SOC Ltd (TSO), an independent entity responsible for overseeing the national grid. Until the TSO is fully established within the next five years, the National Transmission Company of South Africa will serve in this capacity.

The Act also establishes a market platform that facilitates competitive wholesale and retail trading of electricity, a significant shift from the previous system dominated by Eskom. This move towards a more open and competitive market is seen as essential for modernising South Africa’s electricity infrastructure and ending the persistent load shedding that has plagued the country.

The new legislation clarifies the principles for setting or approving prices, charges, and tariffs, ensuring that licensees can recover the full costs of their activities while allowing for reasonable returns. The National Energy Regulator of South Africa (NERSA) will oversee these processes, ensuring that the pricing structures support efficiency and fairness.

Moreover, the Act imposes stringent penalties for damage to electricity infrastructure. Individuals found guilty of damaging, removing, or destroying transmission, distribution, or reticulation equipment could face fines of up to R1 million or five years in prison. Those caught unlawfully receiving such infrastructure could be fined up to R5 million or face a decade behind bars.

This legislation is seen as a critical component of the broader Energy Action Plan and the Eskom Roadmap, which collectively aim to transform South Africa’s electricity sector, end load shedding, and ensure long-term energy security. The reforms are also expected to stimulate innovation, create jobs, and reduce unemployment by encouraging the adoption of renewable energy sources

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Ramaphosa Signs

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