The Energy Regulation and Markets Review - Stikeman Elliott

South Africa
b the National Energy Regulator Amendment Bill; 20 and
c the Independent System and Market Operator Bill (‘the ISMO Bill). 21
NERSA currently performs the role of the economic and technical regulator in the
electricity industry (where it is referred to as the National Electricity Regulator), the
downstream piped gas industry (where it is referred to as the Gas Regulator) and the
downstream petroleum pipeline industry (where it is referred to as the Petroleum
Pipelines Regulatory Authority or ‘PPRA’). NERSA is the sole licensing authority for
all licensable activities under the ERA, the Gas Act and the Petroleum Pipelines Act and
regulates the tariffs and charges to be applied by licensees in respect of licensed activities
as well as access to licensed transmission, distribution, pipelines and other facilities in
respect of which licensees are obliged to provide third-party access.
The Controller of Petroleum Products is responsible for the licensing of the
manufacture, wholesale and retail of prescribed petroleum products and the licensing
of sites for the conduct of such licensed retail activities. The Minister of Energy is
responsible for, inter alia, prescribing the minimum and maximum prices at which any
petroleum products may be sold.
ii Regulated activities
Electricity
Currently, the ERA generally requires licences for the operation of any generation,
transmission or distribution facility, the import or export of electricity and the trading of
electricity, except in the case of certain exempted activities. 22
Licence applications must be in a prescribed form and processed in accordance with
a prescribed procedure. The Electricity Regulator must decide the application within 120
days of the later of the expiry of the objection period (if no substantiated objections are
received) or the filing by the applicant of any further information as may be required by
the Electricity Regulator. The applicant must be provided with the reasons for the decision.
Any generation or transmission licence is valid for a minimum of 15 years or such
longer period as the Electricity Regulator may determine. Other licences are valid for
periods determined by the Regulator. An application for the renewal of a licence must be
granted by the Electricity Regulator but may be granted under different licence conditions.
Coal
The MPRDA regulates the issue or grant of reconnaissance permissions, prospecting
rights, retention permits and mining rights in respect of coal and other mineral resources.
No licences are required for the sale of or trading in coal.
20 Promulgated in GN 890 in GG 34825 of 8 December 2011.
21 Independent System and Market Operator Establishment Bill (GN 290 in GG 34289 of 13
May 2011) as amended by the Independent System and Market Operator Bill [B9-2012].
22 Construction and operation of a generation plant for demonstration purposes unless it is
connected to an interconnected power supply, the non-grid connected supply of electricity
unless for commercial use and any generation plant constructed and operated for own use.
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