Electricity Regulation Amendment Act

Link to law: http://www.gov.za/documents/electricity-regulation-amendment-act
Published: 2008-01-21

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Electricity Regulation Amendment Act 28 of 2007


Government Gazette
REPUBLIC OF SOUTH AFRICA

Vol. 511 Cape Town 21 January 2008 No. 30676
THE PRESIDENCY No. 23 21 January 2008
It is hereby notified that the President has assented to the following Act, which is hereby published for general information:–
No. 28 of 2007: Electricity Regulation Amendment Act, 2007.

2 No. 30676 GOVERNMENT GAZETTE, 21 JANUARY 2008
Act No. 28,2007 ELECTRICITY REGULATION AMENDMENT ACT, 2007
GENERAL EXPLANATORY NOTE:
[ ] Words in bold type in square brackets indicate omissions from existing enactments.
Words underlined with a solid line indicate insertions in existing enactments.
(English text signed by the President.) (Assented to 16 January 2008.)
ACT To amend the Electricity Regulation Act, 2006, so as to insert certain definitions; to make certain textual corrections; to insert a new Chapter dealing with electricity reticulation by municipalities; and to extend the Minister's powers to make regulations; and to provide for matters connected therewith.
B E IT ENACTED by the Parliament of the Republic of South Africa, as follows:- Amendment of section 1 of Act 4 of 2006
1. Section 1 of the Electricity Regulation Act, 2006 (hereinafter referred to as the principal Act), is hereby amended by- 5
(a ) the insertion after the definition of "Minister" of the following definitions: " 'Municipal Finance Management Act' means the Local Govern- ment: Municipal Finance Management Act, 2003 (Act No. 56 of 2003); 'Municipal Structures Act' means the Local Government: Municipal Structures Act, 1998 (Act No. 117 of 1998); 10 'Municipal Systems Act' means the Local Government: Municipal Systems Act, 2000 (Act No. 32 of 2000); 'municipality' means a category of municipality that has executive authority over and the right to reticulate electricity within its area of jurisdiction in terms of the Municipal Structures Act;"; and 15
(b) the insertion after the definition of "Regulator" of the following definitions: u - 'reticulation' means trading or distribution of electricity and includes services associated therewith: 'service delivery agreement' means an agreement between a munici- pality and an institution or person providing electricity reticulation, 20 either for its own account or on behalf of the municipality; 'service provider' means a person or institution or any combination of persons and institutions which provide a municipal service in terms of a service delivery agreement;".
Amendment of section 4 of Act 4 of 2006 25
2. Section 4 of the principal Act is hereby amended by the substitution in subparagraph (a)(i) for item (aa) of the following item:
"(aa) the operation of generation, transmission [and] distribution facilities;".
4 No. 30676 GOVERNMENT GAZETTE, 21 JANUARY 2008
Act No. 28,2007 ELECTRICITY REGULATION AMENDMENT ACT. 2007
1 Substitution of section 9 of Act 4 of 2006
3. The following section is hereby substituted for section 9 of the principal Act: "9. The Minister may, after consultation with the Regulator and stakehold-
ers in the advisory forum, determine by notice in the Gazette that any activity contemplated in section [$I I ( ] ) need no longer be a licensed activity from the 5 date set out in such notice.".
Amendment of section 10 of Act 4 of 2006
4. Section 10 of the principal Act is hereby amended by the substitution for subsections (I) and (2) of the following subsections:
"(1) The Minister may, in consultation with the Regulator, determine by notice 10 in the Gazette that any person involved in an activity relating to trading or the generation, transmission or distribution of electricity that does not require licensing in terms of section [$I 2 read with section [9] 8 must register with the Regulator.
"(2) Any person who has to register with the Regulator must do so in the form and in accordance with the prescribed procedure, and an application for registration 15 must be accompanied by the prescribed registration fee: Provided that any person holding a valid license at the date of a determination contemplated in section [9] 8 must be issued with a registration certificate without complying with the prescribed procedure.".
Amendment of section 11 of Act 4 of 2006 20
5. Section 11 of the principal Act is hereby amended by the substitution in subsection (1) for paragraph (a) of the following paragraph:
"(a) A person who has to hold a licence in terms of section [$I 1 must apply to the Regulator for such licence in the form and in accordance with the prescribed procedure.". 25
Amendment of section 14 of Act 4 of 2006
6. Section 14 of the principal Act is hereby amended by the substitution in subsection (1) of paragraphs (a) and (b) for the following paragraphs:
"(a) after the expiration of the period contemplated in section [12] U(2)(d), if no objections have been received; or 30
(b) after receiving the information contemplated in section [13] 11 (b)."
Amendment of section 15 of Act 4 of 2006
7. Section 15 of the principal Act is hereby amended by the substitution in subsection (1) for paragraph (c) of the following paragraph:
"(c) the period of validity of the licence in accordance with section [21] 20 ;". 35
Amendment of section 16 of Act 4 of 2006
8. Section 16 of the principal Act is hereby amended by the substitution in subsection (1) for the words preceding paragraph (a) of the following words:
"(1) A licence condition determined under section [IS]& relating to the setting or approval of prices, charges and tariffs and the regulation of revenues-". 40
Amendment of section 19 of Act 4 of 2006
9. Section 19 of Act 4 of the principal Act is hereby amended by the substitution for subsection (4) of the following subsection:
"(4) If the tribunal finds that the allegation contemplated in subsection (3) is correct i t may impose a penalty of 10 per cent of the annual turnover of the licensee 45 or R2000 000,OO (whichever is the higher amount) per day [conimencing] commencing on the day of receipt of the notice contemplated in subsection (2)."
6 No. 30676 GOVERNMENT GAZETTE, 21 JANUARY 2008
Act No. 28,2007 ELECTRICITY REGULATION AMENDMENT ACT, 2007
Insertion of Chapter IV in Act 4 of 2006
10. The following Chapter is hereby inserted after section 27 and the expression "CHAPTER IV":
"RETICULATION
Duties of municipalities 5
27. Each municipality must exercise its executive authority and perform its duty by-
complying with all the technical and operational requirements for electricity networks determined by the Regulator; integrating its reticulation services with its integrated development plans; preparing, implementing and requiring relevant plans and budgets; progressively ensuring access to at least basic reticulation services through appropriate investments in its electricity infrastructure; providing basic reticulation services free of charge or at a minimum cost to certain classes of end users within its available resources; ensuring sustainable reticulation services through effective and efficient management and adherence to the national norms and standards contemplated in section 35: regularly reporting and providing information to the Department of Provincial and Local Government, the National Treasury, the Regulator and customers; executing its reticulation function in accordance with relevant national energy policies: and keeping separate financial statemcnts, including a halance sheet of the reticulation business.
Selection and appointment of external service providers
Key performance indicators
28. ( 1 ) A municipality must comply with Chapter 8 of the Municipal
29. (1 ) The Regulator must, after consultation with the Minister prescribe general key performance indicators in respect of the technical I
Systems Act and this Act prior to entering into a service delivery agreement with a service provider.
(2) A service delivery agreement entered into by a municipality with an external service provider must comply with the Municipal Systems Act, the Municipal Finance Management Act and this Act.
(3) The Minister may make regulations relating t+ (a) the criteria, in addition to those provided for in the Municipal
Systems Act, against which service delivery mechanisms must be assessed;
(6 ) matters which must be provided for in service delivery agreements; and
(c) compulsory or standard provisions that must be included in the
operational issues pertaining to reticulation systems for municipalities. (2) The key performance indicators prescribed under subsection (1) may
differentiate between categories and types of municipalities. (3) Management key performance indicators set by a municipality in
accordance with Chapter 6 of the Municipal Systems Act must include the
30
35
40 service delivery agreements.
8 No. 30676 GOVERNMENT GAZETTE, 21 JANUARY 2008
Act No. 28,2007 ELECTRICITY REGULATION AMENDMENT ACT. 2007
Amendment of section 44 of Act 4 of 2006
11. Section 44 of the principal Act is hereby amended by the substitution in subsection (5) for paragraph (b ) of the following paragraph:
"(h) if a licensee is involved, act on the matter in accordance with section [19] l8(2) [; or]. -
Amendment of section 47 of Act 4 of 2006
12. Section 47 of the principal Act is hereby amended by- (a ) the insertion in subsection (1) after paragraph (a ) of the following paragraph:
" (b ) municipalities that reticulate clcctricity; and"; and (b) the substitution for subsection (4) of the following subsection:
"(4) The Minister may, by notice in the Gazette, make regulations regarding- (a) activities that must be licensed or registered and the classification of
licences into categories and sub-categories; (b) norms and standards relating to quality of supply; (c) ancillary or administrative matters that are necessary to prescribe
for effective reticulation services: (d) compulsory national norms and standards for reticulation services: (e) general key performance indicators in respect of technical opera-
tional issues pertaining to reticulation; (f) the criteria, in addition to those provided for in the Municipal
Systems Act, against which service mechanisms must be assessed; (g) matters which may be provided for in the service delivery
agreement; ( h ) the compulsory or standard provisions that must be included in the
service delivery agreement; (i) the inspection of and enquiry into the control and operation of any
licensed, registered or reliculation-related activity; ( j ) new generation capacity; ( k ) types of energy sources from which electricity must be generated; (1) the percentages of electricity that must be generated from different
energy sources; (m) the participation of the private sector in new generation activities; (n) the setting of standards relating to health. safety and the environ-
ment and their incorporation into licences or national norms and standards;
(o) the prohibition of certain practices in the electricity supply industry; ) the criteria for or prohibition of cross-ownership or vertical and
horizontal integration by licensees in generation, transmission and distribution assets;
(q) the conditions subject to which the Regulator may issue a licence; (I;) norms and standards for the setting of reticulation tariffs, in
consultation with the Minister of Finance; (s) any other matter that may or must be prescribed in terms of this Act;
and ( 5 ) any other ancillary or administrative matter that it is necessary to
prescribe for thc proper implementation or administration of this &".
Amendment of long title of Act 4 of 2006
13. The following long title is hereby substituted for the long title of the principal Act:
"To establish a national regulatory framework for the electricity supply industry; to make the National Energy Regulator of South Africa the custodian and enforcer of the national electricity regulatory framework; to provide for licences and registration as the manner in which generation, transmission, distribution, reticulation, trading and the import and export of electricity are regulated; to regulate the
10 No. 30676 GOVERNMENT GAZETTE, 21 JANUARY 2008
Act No. 28,2007 ELECTRICITY REGULATION AMENDMENT ACT. 2007
reticulation of electricity by municipalities; and to provide for matters connected therewith."
Amendment of section 49 of Act 4 of 2006
14. Section 49 of the principal Act is hereby amended by the substitution for subsection (2) of the following subsection: 5
"(2) Despite subsection (I), section [46] 3 must be regarded as having come into operation on 1 December 2004."
"Amendment of Arrangement of Sections of Act 4 of 2006
15. The Arrangement of Sections of the principal Act is hereby amended by- ( a ) the deletion of the following: 10
"7. Application of Chapter;"; ( b ) the insertion after the expression of "Chapter IV" of the following:
"Reticulation 27. Duties of municipalities 28. Selection and appointment of external service providers 15 29. Key performance indicators"; and
(c) by the renumbering of sections 42 to 49 to sections 30 to 37, respectively.
Renumbering of certain sections in Act 4 of 2006
16. The principal Act is hereby amended by- (a ) the substitution in paragraph (bJ of section 4 for subparagraph (iv) of 20
the following subparagraph: "[(iv)]@J perform any other act incidental to its functions.";
(b ) the renumbering from section 8 up to and including section 27 to become section 7 up to and including section 26; and
(c) the renumbering from section 42 up to and including section 49 to 25 become section 30 up to and including section 17.
Short title and commencement
17. This Act is called the Electricity Regulation Amendment Act, 2007, and comes into operation on a date fixed by the President by proclamation in the Gazette.