On Friday 13 October, the Alternative Information & Development Centre (AIDC) made a submission on the Electricity Regulation Amendment Bill advocating for the halting of the independent transmission company setup process.
Last month, the Portfolio Committee on Mineral Resources and Energy opened a call for comments on the proposed amendments to the Electricity Regulation Bill. We note that at the core of the Bill lies the aspiration to create a competitive electricity market. Our interest is on the proposed amendments to the Electricity Regulation Act, 2006, particularly in relation to the establishment of the Transmission System Operator SOC Ltd and the provision of its duties, powers and functions toward an open market platform that allows for competitive electricity trading. The amendments to the ERA will have major implications for the energy sector in the country.
We are deeply concerned for the well-being of electricity users, especially the millions of energy-poor South Africans who do not have safe, affordable and reliable access to electricity. We fear that the independent transmission company setup process could lead to higher electricity costs, potentially impacting the most vulnerable members of society. AIDC’s focus on social and economic justice underpins our opposition to the setup.
Our concern is that (i) these reforms will undermine the state’s capacity to “achieve the efficient, effective, sustainable and orderly development of electricity supply”, and will result in added risk on the state’s finances; (ii) there is a lack of clarity on how tariffs will be set in a competitive energy market, and we caution that it may result in rising tariffs and perpetuate energy poverty; and (iii) increased privatisation of energy, while leading to a greater share of renewable energy in the short term, jeopardises the prospects of transitioning to a low-carbon energy sector and economy in the long run.
As the AIDC we have long stated that the energy crisis in SA is due to a number of systemic issues, chief among which are long-standing maintenance issues and a lack of sufficient new generation capacity. In addition to a massive debt burden, these issues combine to place Eskom in a precarious operational and financial position.
We recommend the de-corporatisation of Eskom so that it is no longer required to operate as a private company but be maintained as a vertically integrated public utility with a regulated pricing model that works to meet the needs of all South Africans.
Read our full submission below.