DATE OF SUBMISSION: 10 DECEMBER 2009
NATIONAL COUNCIL OF PROVINCES
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QUESTION 162
QUESTION FOR WRITTEN REPLY
162. Ms E C van Lingen (DA-EC) to ask the Minister of Energy:
(1) Whether, with reference to the National Energy Regulator
Act, Act 40 of 2004, in particular section 9(f), the
National Energy Regulator of SA (Nersa) will be able to
protect consumers against the wholesale tariff increases at
a local municipal level; if not, why not; if so, what are
the relevant details;
(2) whether she or her department will take any steps to
protect consumers against tariff increases requested by
Eskom; if not, why not; if so, (a) what steps and (b) what
are the further relevant details;
REPLY
(1) The National Energy Regulator Act provides for the
establishment of the Energy Regulator and for procedures
related to conducting its activities. Section 9(f) relates
to the duties of the regulator members. However, this Act
must be read in conjunction with the Electricity Regulation
Act (Act No. 4 of 2006)
The Electricity Regulation Act empowers the regulator to
approve tariffs for both Eskom and municipalities. In
terms of section 4 (a)(ii), the regulator must approve
tariffs for both generators and distributors while section
4(a)(vii) ensures that the regulator enforces compliance in
the implementation of the approved tariff.
It should be noted that the regulator can only regulate
tariffs and not surcharges. A municipality has a
constitutional right to impose a surcharge on an
electricity tariff approved by the regulator. The addition
of surcharges on the electricity tariff might lead to
higher usercharges at the distribution level. It is not
the responsibility of the regulator, but National Treasury
to regulate surcharges. National Treasury has developed
regulations relating to the regulation of surcharges.
(2) The department has already promulgated an electricity
pricing policy. The policy requires distributors to
implement a life line tariff to low income households. In
terms of the electricity pricing policy, the lifeline
tariff should cover low income households with electricity
consumption less than 350kWh per month and connected to a
20 Amps supply point. Normally one needs to use an
electric geyser and stove on daily basis to exceed 350kWh
per month.
This provision of the electricity pricing policy allows
distributors to structure a specific tariff for low income
households for the approval of the regulator. It should be
noted that the shortfall emanating from the lifeline tariff
will be recovered from high consuming customers through
cross subsidies.
Lastly, the department is currently implementing energy
efficiency projects in most cities to minimise the
electricity demand. Energy efficiency will also assist in
shifting some of the new generation capacity projects and
the resultant increase in electricity. [pic]