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Energy Minister Tina Joemat-Pettersson will decide on Eskom tariffs if a proposal of a board of appeal is approved.
The National Energy Regulator of SA (Nersa) could lose its independence if the energy minister gets her way.
Joemat-Pettersson tabled an amendment bill in Parliament that makes provision for a board of appeal with her at the helm.
Some stakeholders regard it as an effort to undermine Nersa’s independence and to politicise decisions on energy regulation.
Of late, Nersa has been stepping into the breach for consumers and business against Eskom’s applications for big increases in electricity tariffs.
In terms of current legislation, Nersa’s mandate is to be an independent regulator of electricity, as well as gas and petroleum pipelines.
The purpose of the amendment bill is the establishment of a separate board of appeal to hear appeals on Nersa’s decisions, such as its decisions on electricity tariff increases. The amendment bill was approved by Cabinet in October last year, but with the additional proposed amendment that the board of appeal be led by the minister of energy.
The amendment bill was subsequently sent back to the minister for rewriting.
An impact study has already been conducted, according to a report by the parliamentary committee on energy on May 3 this year, and the amendment bill is expected to be tabled in Parliament again after the local government elections on Wednesday.
In recent years, Nersa has been a fly in the ointment for the beleaguered national utility, Eskom.
In June last year, Nersa denied Eskom’s application to have the approved tariff increase of 12.69% for 2015/16 raised to 25.3%.
In March this year, Nersa only approved a general tariff increase of 9.4%, while Eskom had asked for an increase of 16.6%.
Shaun Nel, spokesperson for the Energy Intensive User Group of Southern Africa, said the government should not try to fix something that was not broken.
“Nersa has shown it can act independently by not always approving the increases Eskom asks for and holding the power utility to account for its mistakes,” he added.
The group, which represents the country’s major corporate consumers of power, was worried about a board of appeal led by the minister, Nel said.
“It would be a travesty if Nersa’s decisions could simply be vetoed by the minister of energy.”
Stakeholders could already lodge appeals against Nersa’s decisions in the high court and an appeals board would therefore only add another bureaucratic layer,
Nel said.
“There are questions about whether the members of this board will have some kind of special skills set that will enable them to take better decisions than Nersa.”
DA spokesperson on energy Gordon Mackay said although the DA was of the opinion there should be an appeals process on Nersa decisions, they are dead set against an appeals process led by the minister of energy.
Nowhere in Africa or the rest of the world is it best practice for the minister of energy to handle appeals on energy regulation.
“As a politician, the minister also doesn’t have all the technical knowledge to be a reasonable arbitrator on issues such as electricity tariffs,” said Mackay.
The minister is a political appointment and, as such, it will cause political considerations to weigh in on decisions on energy regulation that should be taken from an apolitical viewpoint.
The DA proposes that the Competition Commission handle appeals against Nersa decisions, as is the case in Britain, where decisions by the British energy regulator, Ofgem, can be taken on appeal to the Competition and Markets Authority.
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