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Resale of electricity in South Africa

NERSA sponsored research to produce guidelines for the industry

Request for comment:

NERSA have recently appointed NETGroup SA to undertake research into what is seen as a growing market for the resale of electricity in South Africa. They have defined resellers as `.. any person or entity who is purchasing power from a distributor and selling it to an end use customer’.

The research will initially be aimed at determining the size and scope of the resale market and identifying some of the basic principles to be applied in this market. The results of this research will assist NERSA in producing a set of Resale Guidelines for the market as well as further refining the pricing principles that should be applied to the resale of electricity. The resulting guidelines will guide and direct the relationship between the supplier and the reseller and between the reseller and the end-user.  The document will also provide mechanisms for the resolution of complaints.

An advertisement calling for comment from resellers, municipalities, Eskom and `all affected persons’ has been posted to the NERSA website.

The issue is that there are a growing number of  resellers or ‘distributors’ that appear to have an equivalent number of customers or demand as many regulated licensed utilities with no oversight control to ensure uniformity and customer protection. The existing legislation governing the electricity industry [Electricity Regulation Act of 2006, (Act No 4 of 2006)] is silent on the resale of electricity specifically but indirectly refers to it as “trading”. The purpose of the research is not to remove the current competition in the market or impose difficult or harsh rules on participants but to understand the market better, estimate the magnitude thereof and consider the creation of uniform guidelines for this market in SA. The research will consist of a literature research and an empirical study in the form of a questionnaire to all metropolitan municipalities, Eskom and a selection of smaller municipalities and resellers. There will also be extensive liaison with resellers across SA to receive their inputs and thoughts on the matter.

Organisations wishing to participate in the research or provide comment should contact Mr. A van der Merwe of NETGroup SA (Pty) Ltd at (051) 430 1740 or a.vdmerwe@netgroup.co.za or Margie Nkalashe, margie.nkalashe@nersa.org.za, or Lesley Ferrando, lesley.ferrando@nersa.org.za, at NERSA.

News item provided by the AMEU in the AMEU bulletin