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City of Cape Town v The National Energy Regulator of South Africa and the Minister of Energy

28 July 2017

High Court of the Republic of South Africa, Gauteng Division, Pretoria In November 2015, the City of Cape Town (CoCT) applied to the Minister of Energy (Minister) for a determination in terms of section 34 of the Electricity Regulation Act, 2006 (ECA) that would allow it to purchase solar and wind power from an independent power producer (IPP) who would create new power capacity to supply it. The Minister has however to date failed to determine CoCT’s application. The Minister has informed the CoCT that she has placed all new determinations on hold.

The National Energy Regulator of South Africa (NERSA) is of the opinion that a Ministerial determination in terms of section 34 of the ECA is required before it can licence an IPP to establish and generate new capacity. It is therefore refusing to process applications for licences in the absence of Ministerial determinations in terms of section 34 of the ECA.

In this matter, the CoCT is arguing that section 34 of the ECA is merely an empowering provision that allows the Minister to determine the need for new generation capacity and to take the initiative for its procurement – it does not preclude anybody else from establishing and operating new generation capacity as long as they are duly licensed to do so by the NERSA under the ECA.

In addition, the CoCT is of the opinion that section 34 of the ECA is unconstitutional and therefore invalid because it unduly interferes with the CoCT’s right and duty to provide electricty to its inhabitants in such manner as it deems best.

The CoCt has therefore applied to court for an order in the following terms:

  1. It is declared that a determination in terms of section 34 of the ECA is not required for an IPP to create new capacity for the generation of electricity, to produce electricity by the capacity so created, and to sell the electricity so produced to the CoCT;
  2. If it is held that such a determination is required, that section 34 of the ECA be declared unconstitutional and invalid;
  3.  If it is held that such a determination is required but section 34 of the ECA is not declared invalid with immediate effect, then the applicant claims an order that the Minister determine the CoCT’s application for such a determination, made on 3 November 2015, within one month of this order.

Court documents

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Section 24of the Constitution of the Republic of South Africa, 1996

Everyone has the right to an environment that is not harmful to their health or well-being; and to have the environment protected, for the benefit of present and future generations, through reasonable legislative and other measures that prevent pollution and ecological degradation; promote conservation; and secure ecologically sustainable development and use of natural resources while promoting justifiable economic and social development.

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