Latest news with #ElectricityRegulationAct
Irish Independent
4 days ago
- Business
- Irish Independent
New law will allow private wires to free up electricity connection
The 'private wires' policy agreed by Cabinet represents a major shake-up in the way electricity can be delivered and distributed. ESB Networks is currently the only operator legally permitted to manage electricity connections. It installs and owns the cables and wires. The semi-state company is under significant pressure as demand for power grows, with delays in connections frustrating businesses and domestic customers. Minister for Climate, Environment and Energy, Darragh O'Brien announced yesterday that a parallel system had been agreed that would operate alongside ESB Networks. Legislation to underpin it would be given priority status, with drafting to begin shortly and enactment expected within 12 months. The law will put the energy regulator, the Commission for Regulation of Utilities (CRU), in charge of administering private-wires applications. The plan brought to Cabinet highlights several scenarios where it envisages private wires will be frequently sought. A 'generator' such as a wind farm or solar park could provide a direct connection to an adjacent factory without both sides having to connect to the national electricity grid. An existing generator will be able to share its grid connection with a new generator from another firm, saving the new installation waiting for a separate connection. A firm that supplies its own electricity – from a rooftop solar array, for example – will be able to provide electricity directly to a neighbouring customer. ADVERTISEMENT An EV owner will be able to lay their own cable for on-street charging – subject to planning permission. Mr O'Brien stressed the new system would not grant participants any automatic rights of access over third-party lands and that planning permission would still be required for most installations. I will also ensure that the CRU is resourced to take on this area However, he said it would enable a faster, more flexible response to the needs of a growing economy. 'This is a very significant reform of the rules on electricity infrastructure,' he said. 'I, and officials in my department, are now focused on the next steps. 'Primary legislation to amend the Electricity Regulation Act allowing for private wires will be enacted. 'Supporting regulations to define standards and processes for granting permission for private wires will be adopted. 'I will also ensure that the CRU is resourced to take on this significant new area of regulation.' The move followed a consultation with industry and the wider public last year and was supported by ESB Networks. The department said the current system would remain the preferred route to connection in most cases.
The Citizen
10-07-2025
- Business
- The Citizen
Ekurhuleni metro and Nersa lock horns over electricity tariff discrepancy
'Resulted in thousands of residents being overcharged for electricity on 1 July.' Resellers don't know which of two sets of tariffs to apply – and if they fall into arrears entire residential complexes could have their power disconnected. Image: Supplied A discrepancy between the electricity tariffs approved by the Ekurhuleni metro council on 29 May 2025 and those approved by energy regulator Nersa thereafter has left residents angry and confused. Electricity resellers, who must base the tariffs they charge end-users on the municipal tariffs, are at a loss. 'You don't know what to implement, because who do you believe – the metro or Nersa?' asks Johan Hopley, chair of the Electricity Resellers Association of South Africa (Erasa). Electricity resellers play a critical role – especially in sectional title complexes where the municipality supplies electricity only to one bulk meter. The developer provides the internal distribution network, and a reseller thereafter manages the metering and billing of each unit. They buy electricity from the municipality at a bulk tariff and resell it to the user in each unit at a margin. ALSO READ: Nersa approves 12.7% electricity tariff hike for Eskom Resellers must be familiar with tariffs Resellers are, however, by law prohibited from charging each end user more for electricity than it would cost them had they bought directly from the municipality. It is therefore critical that resellers know exactly what the municipal tariffs are. The council implemented the following tariffs for residential customers on 1 July: 0-50kWh – R2.82 50-600kWh – R2.82 600-700kWh – R4.41 More than 700kWh – R11.44 Basic charge (Tariff A2): R142.50 This corresponds with the tariffs published in Schedule 2 on its own website and approved by Nersa. Source: Nersa website It does not, however, correspond with what was approved by the council: 0-50kWh – R2.59 50-600kWh – R2.59 600-700kWh – R4.03 More than 700kWh – R10.43 Basic charge (Tariff A2): R109.78 These discrepancies are not limited to this customer category. Apparently relying on the council approved tariffs, the metro 'admitted' its 'mistake', which was 'due to a technical error' and gave an undertaking that those residents who bought prepaid electricity on 1 July will be credited accordingly. The tariffs were adjusted the next day. ALSO READ: Nersa slashes Eskom's tariff hike – but consumers could pay the price in taxes In reaction, the Freedom Front Plus (FF+) says the error 'resulted in thousands of residents being overcharged for electricity on 1 July'. 'The most contentious issue is the incorrect basic charge of R142.50, which was deducted upfront for electricity purchases, meaning residents received fewer units than they were entitled to,' says FF+ councillor Denise Janse van Rensburg, Deon Conradie, pricing expert and former senior manager for tariffs at Eskom, says municipalities are, in terms of the Electricity Regulation Act (ERA), only allowed to charge tariffs that have been approved by Nersa. Such tariffs are supposed to be based on the cost of supply plus a reasonable margin. Should the municipality charge lower rates, as will be the case in Ekurhuleni after the 'correction', it may indicate some form of subsidisation. Conradie says any deviation from the tariffs Nersa approved must also be approved by the regulator. Subsidies must be transparent and strongly motivated. ALSO READ: Eskom proposes further tariff restructuring to ensure 'transparency and fairness' Corrections will fall foul of ERA It therefore stands to reason that the 'corrections' the metro has promised will fall foul of the ERA. On the other hand, tariffs must also be approved by the council in terms of municipal legislation. That assumes that there is only one set of tariffs, both approved by the council and Nersa, which is seemingly not the case in Ekurhuleni. Hopley says this is extremely problematic for resellers, who had very limited time from the date Nersa approved the metro's tariffs to the implementation date on 1 July to calculate the tariffs they must charge end users to remain viable. Initially he battled to get the approved tariffs from Nersa. They were only published on the regulator's website on 7 July. Now there are two different sets of tariffs and resellers are not certain which one to base their tariffs on. ALSO READ: At least electricity tariff increase is not 36%, but still 3 times inflation rate Hopley says Ekurhuleni changed the structure of its bulk resellers' tariff, which has resulted in a complete mismatch between wholesale and retail tariffs. In the new structure resellers, who before were only charged a basic fee plus the cost per unit consumed, must now pay a demand charge, network charge, basic charge – and the unit cost is based on time-of-use. In practice, the bulk electricity cost of a residential building with 145 units that each use 400kWh per month on average has increased by 20.84%, while the municipal retail tariffs that resellers are not allowed to exceed have increased by 11.32%, calculated over a year. Hopley says there is no way resellers can make ends meet as their margins have been less than 10%. If resellers fall in arrears, it may result in the disconnection of entire residential complexes. This article was republished from Moneyweb. Read the original here.
The Citizen
08-07-2025
- Business
- The Citizen
Ward 74's turnout for free electricity registration was satisfactory
Ward 74 councillor, Belinda Echeozonjoku is impressed with the turnout of the ward's registration for City Power's free basic electricity on July 4 at the Waverly Sports Club. The criteria were to be a South African citizen, reside within the City of Johannesburg, be unemployed or have monthly financial resources not exceeding R7 503. 01. 'Many elderly and unemployed could register and will get notification via sms. There were 46 applicants despite 57 attendees but were unfortunately some people who didn't have all supporting documentation were turned away.' Echeozonjoku added that the ward would have a second open day which would include SAPS. City Power's new electricity tariffs effective from July 1. Also read: UIF Benefits: How to claim unemployment relief? In a media statement, City Power said it would cushion poor, low-income households from paying increased service and availability charges as new tariffs kick in. 'The City of Joburg entity will implement the new electricity tariff increases, as approved by the National Energy Regulator of South Africa (NERSA). The regulator approved an average increase of 12.41% across City Power's customer categories for the 2025/2026 financial year,' explained the spokesperson, Isaac Mangena. The approved tariff increases are informed by the NERSA methodology and findings from City Power's cost of supply study. Mangena that the power utility's application was submitted after thorough consideration of operational costs, bulk purchase price increases, and the overall cost structure of our business, balanced against the socio-economic realities affecting our customers. Also read: GoSolr warns of another energy crisis if solar barriers remain 'Tariffs are reviewed annually to ensure they remain reflective of service delivery costs while maintaining financial sustainability. This review complies with the Municipal Finance Management Act (MFMA), Electricity Regulation Act, and relevant NERSA guidelines,' he noted. It is important to note that while the average approved increase is 12.41%, actual increases will vary per customer category based on usage and tariff structure Follow us on our Whatsapp channel, Facebook, X, Instagram, and TikTok for the latest updates and inspiration! Have a story idea? We'd love to hear from you – join our WhatsApp group and share your thoughts! At Caxton, we employ humans to generate daily fresh news, not AI intervention. Happy reading!
The Citizen
07-07-2025
- Business
- The Citizen
Business partnership with government shows results
While the partnership between government and business is delivering progress, energy reform at Eskom must be accelerated. The partnership between business and government is showing results, with one of the positive features of the government of national unity the openness of ministers to engage with business. Busisiwe Mavuso, CEO of Business Leadership South Africa (BLSA), says in her weekly newsletter that a better understanding of each other's needs and objectives can help business and government make progress. She says the BLSA hosted the Minister of Electricity and Energy, Dr Kgosientsho Ramokgopa, who spoke to members about the progress of electricity systems reform. 'The legislative foundation for competitive electricity markets is now in place with the amended Electricity Regulation Act enabling Eskom's restructuring into separate generation, transmission and distribution entities, breaking the monopoly that constrained our energy future. 'Most significantly, the Independent Transmission Project Office is established and will unlock billions in private transmission investment, starting with 1 164 kilometres of new lines that will release 3 200 MW of stranded renewable capacity in the Northern and Western Cape.' ALSO READ: Eskom hammers another nail in load shedding coffin Breathing room now for proper implementation of structural changes Mavuso says with Eskom's availability factor now stabilising around 65% and additional capacity from the Medupi and Koeberg units coming online, we have breathing room to implement structural changes properly and immediate wins are within reach if we can resolve current bottlenecks. However, she points out that current grid access disputes are blocking renewable energy projects and preventing energy traders from participating in virtual wheeling, undermining the very competition government and business are trying to create. In addition, she warns that some exporters face losing EU market access within 12 months due to carbon border adjustments, while we struggle to issue renewable energy certificates quickly enough. Mavuso says the minister's commitment to have the National Energy Regulator of South Africa's board chair lead the resolution of grid access rules offers a concrete near-term milestone that can be tracked. 'The underlying challenge is more fundamental. Municipalities owe Eskom over R110 billion, while customers owe municipalities over R370 billion, a payment crisis that threatens system sustainability. Over 95% of municipalities lack qualified electrical engineers, undermining their ability to collect revenue, maintain infrastructure, or plan for growth. 'Our current distribution system is simply not fit for purpose, and numerous interventions to address the culture of non-payment failed to solve the problem. 'As Minister Ramokgopa explained, Eskom must serve as a supplier of last resort for millions of poor South Africans, but this social obligation requires a sustainable financing model that current structures cannot deliver.' ALSO READ: Third-party concessions a solution for municipal electricity distribution Distribution Agency Agreements will require coordinated effort Mavuso says the Distribution Agency Agreements being developed could address this systematically, but implementation will require the kind of coordinated effort that made the energy partnership successful. She points out that the minister acknowledged the tension between urgency and implementation quality directly, that slow progress risks undermining market sentiment while rushed reforms could trigger system failures. 'His message was clear: government understands the urgency but recognises that getting complex reforms right takes time. It is a difficult balance, but one made easier through the collaborative approach we established.' ALSO READ: 'Sad situation': Eskom warns growing municipal debt seriously risks its sustainability Minister credited business with progress on electricity Mavuso says what gives her confidence is the way this partnership has evolved. 'The minister explicitly credited business as 'very central in the resolution of the energy question' and accepted business' offer to provide embedded skills capacity, from modelling expertise to policy articulation support. 'This is not just consultation but genuine co-creation of solutions where business expertise can help government navigate reform complexity. 'While full transmission system independence may take several years, we can accelerate progress on the immediate priorities of resolving grid access rules, enabling curtailment that could add capacity quickly and developing the municipal engineering capacity that underpins system sustainability. 'These are concrete areas where business skills and government authority can combine for rapid impact. This collaborative model proved successful across government, from home affairs to basic education. As government focuses increasingly on local government delivery, we are ready to contribute capacity and insight where it is most needed.' She says she is optimistic that the momentum can be maintained. 'Minister Ramokgopa's detailed engagement demonstrates how business is now viewed as a genuine partner in solving complex policy challenges. The foundation is solid, the partnership is proven, and the pathway is clear, even if the timeline tests our collective patience.'
Daily Maverick
03-07-2025
- Business
- Daily Maverick
Gridlock: The urgent imperative to increase SA's transmission capacity
South Africa is not short on ambition or potential when it comes to energy reform. The country's renewable energy market is maturing. Investment appetite is increasing and policy shifts, like the recent Electricity Regulation Act, indicate focused commitment to achieving a more competitive, sustainable and competitive energy market. However, one obstacle remains a hindrance to this momentum - transmission. Despite billions of rand committed to generation, over 20GW of renewable energy remains untapped due to a lack of grid capacity. As the country scrambles to meet rising energy demand and decarbonise its economy, transmission has emerged as the single most critical enabler of energy security and low-carbon growth. Importantly, the lack of transmission is not just a technical hurdle. It is the vital lever that is needed to unlock real energy transformation. With open access to the grid, more independent power producers (IPPs) will be able to participate and, more importantly, the increased capacity created by a robust transmission ecosystem will mean that South Africa (SA) can unleash the full potential of renewables – cutting emissions while improving reliability. The good news is that we appear to finally be on the path towards this enhanced transmission capacity. The establishment of the National Transmission Company of South Africa (NTCSA), to be spun off from Eskom, was a significant early milestone on this journey. This unbundling will enable open and transparent access to the grid for public and private generators. It will also pave the way for the trading of electricity through market platforms and wheeling arrangements, creating the foundation for a more dynamic and competitive power sector. The NTCSA coupled with the proposed Independent Transmission Projects (ITP) programme, creates a compelling case for private sector participation, not just in generation but also in grid infrastructure. However, there is still a long road ahead. The Transmission Development Plan (TDP) 2024 identifies the ambitious objective of integrating around 56GW of new generation and constructing over 14 000km of transmission lines by 2034. That is less than 10 years from now. The initial phase to 2029 targets a more realistic 5 043km of powerlines, but with only 286km expected to be completed in 2025, the gap between ambition and delivery remains immense. Also, with Eskom's financial constraints and national debt levels limiting national government's capacity to finance these builds, the success of the ITP programme will depend heavily on attracting private sector buy in, partnership and investment. Private investment in these ITP projects will require clear revenue models, predictable tariff structures and credible counterparties. The private sector needs certainty, not just around returns, but also when it comes to things like termination and non-payment recourse. South Africa could apply lessons from past public-private partnerships, like the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP). A stable, predictable, and transparent regulatory environment, consistently applied, is key. Investors will need absolute certainty regarding tariff structures, off-take agreements with the NTCSA, and the long-term security of their substantial investments. The government's commitment to late-stage tendering – ensuring environmental approvals and servitudes are largely in place before bids – is a sensible move to de-risk projects. Standard Bank is actively engaged in this sector, working to structure bankable transmission models. There are multiple avenues to de-risk transmission investments, and we can leverage global lessons and precedents to achieve this. Countries like Brazil and Peru have successfully deployed BOOT (Build, Own, Operate, Transfer) models to deliver thousands of kilometres of grid infrastructure. We do not see any reason why South Africa cannot do the same. Transmission infrastructure does not have to be the bottleneck; it is an enabler of energy reform. But to do that, it needs to become a national investment priority. There are encouraging signs that this may be the case. The Request for Information (RFI) that took place between December 2024 and February 2025 gathered insights from market participants on how to accelerate the development of transmission infrastructure. Further milestones include the imminent release of the full Request for Proposal (RFP), which will signal a vital shift from talking and planning to execution, and allow government to shape the legal frameworks, procurement mechanisms and support instruments that will guide the first batch of independent transmission projects to market. This is the crucial next step in shifting SA's energy reality from crisis management to long-term and sustainable resilience. DM
