13 May 2020 at 9:03 am
The City of Cape Town seeks to develop its own clean electricity capacity without requiring the national Energy Minister’s permission. Legal representatives for the City, the National Energy Regulator of South Africa (NERSA) and the Minister of Mineral Resources and Energy, with the Centre for Environmental Rights (CER) as a friend of the court (amicus curiae), made their submissions before High Court Judge Leonie Windell in a virtual hearing on 11 and 12 May 2020. The hearing was not open to the public, but was recorded.
The Constitutional obligations of local government, in relation to electricity generation, are a central focus of the case.
The CER sought to assist the court in understanding the important role that local governments can and must play in protecting human health and the environment, by facilitating the transition from harmful fossil fuel-based electricity to renewable (solar and wind) electricity. Fossil-fuel based electricity from coal currently makes up the majority of South Africa’s electricity, and contributes to 40% of the country’s greenhouse gas (GHG) emissions.
In addition to municipalities’ obligations to provide services like affordable and accessible electricity (as the City of Cape Town argues), they have a Constitutional duty to provide clean and healthy electricity which does not result in harmful air and water pollution or worsen climate change. Municipalities should not be impeded in fulfilling those obligations.
In the hearing, NERSA conceded the harms caused by coal-based electricity generation in South Africa, as raised by CER in its amicus submission, and agreed that the section 24 Constitutional right to an environment not harmful to health or wellbeing is a relevant consideration that must be taken onto account by all organs of state in electricity-related decision-making.
“The need to consider environmental, climate and human health impacts in all levels of government decision-making on electricity is crucial for a just recovery from the COVID-19 pandemic and to strengthen the country’s resilience to the climate crisis, given the impact of South Africa’s electricity system for the health, well-being and survival of the people of South Africa in the face of the climate crisis” says Nicole Loser, attorney at the CER.
Judge Windell’s judgment on the matter has been reserved and is awaited.
Briefly, these were some of the arguments made by the parties:
Arguments of the City of Cape Town
The City argues that designating the Minister as a “super regulator” of electricity was never the legislator’s intention. Nothing in law expressly prohibits local government from procuring electricity without the Minister’s permission. The City added that, in any event, subject to national and provincial legislation, a municipality has the Constitutional right to govern, on its own initiative, the affairs of the community. Local government has a Constitutional obligation to provide basic services to its people. This means that national government cannot interfere and tell municipalities how to fulfil their obligations.
Arguments of the CER, as amicus curiae (friend of court)
CER supports the primary relief sought by the City, namely that section 34 of the Electricity Regulation Act (ERA) does not prohibit municipalities from developing their own electricity capacity. The health, climate and water impacts of electricity generation in South Africa (from coal-fired power) are problems that fundamentally affect local government and local communities – municipalities must be free to limit the harm for the communities they serve, by choosing to decrease the impacts from electricity generation. Local government is the closest that the government can get to the people: that is where delivery must be seen to be taking place.
“The relief called for by the City is not radical, it’s absolutely essential. The regulatory barriers to renewable energy development by local government need to be removed”, said Adila Hassim, counsel for the CER.
NERSA’s arguments focused on drawing the distinction between electricity generation and reticulation (the trading and distribution of electricity and associated services) – it agreed that municipalities have the rights and power to reticulate electricity, but stated that this is separate and distinct from electricity generation, which, NERSA argued, is a national function. In response to the CER’s amicus submissions, NERSA confirmed that it does not dispute that the harms caused by electricity generation and the section 24 environmental right are relevant considerations. NERSA argued these Constitutional, and other legislative requirements, apply to all spheres of government, and there is no reason why local government is better placed to ensure that they are met.
The Minister’s argument focused on the need for the government bodies to resolve the dispute, in terms of legislation and prior to instituting this litigation. It also took that view that the City should have taken on review the Minister’s 2017 decision to place a moratorium on the issuing of further determinations.
The City of Cape Town’s Response & Closing Argument
In reply to the respondents, and in closing, the City of Cape Town highlighted that it is its prerogative to reduce its GHG emissions and provide long-term reliable and affordable electricity. This is in line with its plans to establish more “green power” and “these are typically the kinds of decisions that the Constitution confers on local government”, said its counsel Wim Trengrove SC. The City reaffirmed its argument that a plain reading of section 34 of the ERA does not prohibit local government from purchasing generation capacity, and that this would be aligned with the Constitution.