Huge problems for South Africa’s critical new electricity laws
The Electricity Regulation Amendment (ERA) Bill is now before Parliament, but due process could mean that the Bill, which has faced several delays, still has a long way to go.
Alecia Pienaar and Margo-Ann Werner from Cliffe Dekker Hofmeyr said that the new Bill – which was tabled on 23 August 2023 – is arguably the most essential piece of regulation for South Africa’s transition away from a centralised electricity market to a more competitive model.
In April, the Department of Energy and Mineral Resources said that the new Bill would expand the powers of the National Energy Regulator of South Africa (Nersa), give the electricity minister greater powers and allow for more independent transmission companies by opening up the South African electricity market.
It will also allow for the creation of an independent Transmission System Operator, which is crucial for Eskom’s unbundling into three companies.
“In light of the energy crisis, the Presidency previously committed to expedite the Bill. Despite this, it was only approved by Cabinet for introduction to Parliament in March 2023, with further delays experienced to get it formally and properly tabled,” Pienaar and Werner said,
“Though there are still calls for the ERA Bill to be fast-tracked, it is unclear how or if this will be achieved.”
Potential issues
According to Parliament, the Bill will still have to follow the constitutional legislative process before it can be enacted.
The president will also determine the commencement date of the Bill’s provisions, with it also possible for certain provisions to only commence at a later date.
The Bill will have to undergo the following due process in order:
- Introduced to Parliament (23 August 2023)
- Portfolio Committee
- National Assembly (NA)
- Select Committee
- National Council of Provinces (NCOP)
- Sent for Assention
- Assented
Crucially, any Bill, including the ERA bill, which was not finalised at the end of this Parliament’s term, would fall away and need to be revived.
“Failure to prioritise the ERA Bill before the 2024 election year could thus present the risk of further significant delays,” the experts said.
According to a Memorandum on the Objects of the Electricity Regulation Amendment Bill, a series of consultations have already been undertaken within the industry, key sector stakeholders, and the general public.
However, it should be noted that the current tabled version of the ERA Bill differs from the version presented for public comment in February 2023.
The Bill is also expected to see various amendments following deliberations with both the NA and NCOP in the coming months.
It is believed that the NA and NCOP will have discretion on whether to hold more public hearings on the Bill, however, sections 59(1)(a) and 72(1)(a) of the Constitution state that both must promote public engagement in the legislative process.
This matter was recently seen regarding the National Environmental Management Laws Amendment (NEMLA) Act of 2022, where amendments to the Bill were never subject to public comment of the Bill.
Although the public was consulted on the initial version of the NEMLA Bill, the Constitutional Court said the Bill was invalid due to Parliament’s failure to facilitate public involvement in its legislative processes.
“Despite the need to expedite the ERA Bill, it would be remiss of Parliament not to continue to involve industry and the public at large in the law-making process insofar as any further material changes are introduced to the Bill,” the experts said
“This is especially considering that the ERA Bill will ultimately result in a complete overhaul of the existing electricity market.”
The Chairperson of Parliament’s Mineral Resources and Energy Committee did, however, state that the Committee will engage in further public comment in the near future.
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