Members of the National Council of Provinces,
I would like to present to you the Electricity Regulation Amendment Bill, after having received comments and support from all nine Provinces.
At this stage I would like to take the opportunity to thank the members of the Select Committee for the work done here and in the provincial legislations, and for the unanimous support the Bill enjoyed.
The Electricity Regulation Amendment Bill was first introduced as chapter 4 of the Electricity Regulation Bill which became law on 1 August 2006. The purpose was to provide a regulatory framework that regulates the electricity value chain encompassing generation, transmission, distribution and trading. Due to Constitutional considerations, Parliament advised that the Bill must be split into two parts:
(i) Part 1: the Electricity Regulation Bill to cover all non-municipal aspects of electricity regulation
(ii) Part 2: the Electricity Regulation Amendment Bill, to cover electricity regulation taking into account the Constitutional rights of municipalities (or the so-called section 76 aspects of the Bill)
Our focus is now on concluding the Electricity Regulation Amendment Bill (Part 2), or the part that relates to the regulation of municipal reticulation services as provided for in section 155(7) of the constitution.
The rationale and intention of this legislation are:
• to provide for licensing of all reticulation service providers including municipalities
• to provide a framework for setting of tariffs by municipalities
• to empower the Minister to prescribe regulations for municipalities in relation to electricity reticulation services, including monitoring, compliance and corrective action in the event of breach by municipalities
• to make provision regarding the relationship between municipalities as service authorities, and service providers who provide reticulation services on their behalf
In the last quarter of 2006, the Bill was introduced in Parliament. Public hearings were then held in the Parliamentary Portfolio Committee (PPC). The PPC adopted the Bill in November 2006 and it was subsequently referred to the NCOP as a Section 76 Bill.
The Bill was considered by the 9 provincial legislatures for adoption during the first quarter of 2007. As I indicated, the provinces unanimously supported the Bill subject to certain amendments and these amendments have been taking into account in the final Bill as presented here.
The State Law Advisor has taken these amendments into account in arriving at the final version of the Bill, including ensuring compatibility with the Constitution.
The Bill tabled before you today incorporates all the comments received from stakeholders and I hope members will continue to engage on this Bill and improve the regulatory framework of the electricity distribution industry.
This completes the institutional legislative framework which will then allow certain regulations to be implemented in improving the delivery of reticulation services. This Bill also ensures that NERSA plays an unambiguous role in its quest to achieve better regulation outcomes in the entire electricity value chain.
Once again, I would like to thank the members of the NCOP Select Committee for their invaluable contribution and support in the processing and handling of this Bill.