Worries over electricity price hikes in South Africa

 ·2 Oct 2023

The Portfolio Committee on Mineral Resources and Energy has completed its public hearings on the Electricity Regulation Amendment (ERA) Bill in Limpopo, with some members of the public concerned about the possible rise in electricity costs if it goes through.

The ERA Bill is seen as the most important piece of legislation for South Africa’s transition from a centralised electricity market to a competitive model, where Eskom can buy electricity from private generators.

The Bill aims to amend the Electricity Regulation Act of 2006 via the following:

  • To provide for the National Energy Regulator to consider applications for licences and the issue of licences;
  • To provide for revocation and deregistration of licences;
  • To provide for additional electricity, new generation capacity and electricity infrastructure;
  • To provide for the establishment, duties, powers and functions of the Transmission System Operator and transitional measures;
  • To provide for an open market platform that allows for competitive electricity trading;
  • To assign the duties, powers and functions of the Transmission System Operator to the National Transmission Company South Africa;
  • To provide for delegation and assignment; to provide for offences and penalties; and to provide for matters connected therewith.

The Bill received mixed views when the committee visited the Vhembe, Mopani, Sekhukhune and Waterberg districts in Limpopo.

Those who supported the Bill said that it would be better for South Africa to address the current shortage of electricity. Other supporters said they hoped the proposed amendments would take the pressure off Eskom.

However, there were some who were concerned that the new laws could lead to a rise in electricity costs as private companies start competing with Eskom in electricity generation, which would further disadvantage the poor.

Another submission said that new companies must empower young people and prioritise giving qualified South Africans employment.

In Mopani, citizens also told the committee that they are not convinced that Eskom needs assistance from private power generators, arguing that the embattled electricity company is just poorly managed and does not lack capacity.

In Vhemba, other submissions were critical of Parliament and the National Treasury agreeing that Eskom cannot build additional electricity capacity with its additional funding, whilst others believed that public consultations are just a tick-box exercise.

The Committee has now started its public hearings in Mpumalanga, hoping to complete the nationwide public hearings process by the end of November this year.

Those who would like to submit public comments on the Bill can also do so by emailing [email protected] by Friday, 13 October.

You can read the full document here.

Read: Huge problems for South Africa’s critical new electricity laws

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