Centre for Environmental Rights – Advancing Environmental Rights in South Africa

On 5 October 2021 the Minister of Mineral Resources and Energy published a Notice amending Schedule 2 of the Electricity Regulation Act.

Schedule 2 of the Electricity Regulation Act provides for exemptions from the obligation in the Act to apply for (and hold) a licence from National Energy Regulator (NERSA).

The Notice does not make substantial changes to the previous version published on 20 August 2021 and only fixes certain formal defects which occurred in the last Notice. As with the Schedule published on 20 August, the latest version also provides that a person who operates a generation facility or performs the activity of a reseller must register with NERSA.

Changes in the latest Schedule 2:

• Definitions included: Section 1.10 provides for the definition of “Point of Connection“; Section 1.11 provides for the definition of “Property“;
• Section 3 added: Section 3 now reads “The following activities are exempt from the requirement to apply for and hold a licence under the Act, but these activities must comply with the Code and must be registered“;
• Section 3.5 and subsections 3.5.1 and 3.5.2 added. This section now reads:

  3.5 The trading of electricity by a reseller in circumstances where—

  3.5.1 the price charged by the reseller to customers does not exceed the tariff that would have been charged to such customers for the electricity if it had been purchased from the holder of a distribution licence for the area in which the electricity is supplied to the customer; and

  3.5.2 the reseller has entered into either a service delivery agreement in accordance with the Municipal Systems Act, (Act No. 32 of 2000) (where the licensed distributor is a municipality) or a similar agreement with the distributor (where the licensed distributor is not a municipality) that regulates the relationship between the reseller and the holder of the distribution licence and the obligations of the reseller in respect of the quality of supply to customers; and the Regulator has ratified the general terms and conditions of such service delivery agreement.

In August 2021, the licencing threshold contained in Schedule 2 was raised from 1MW to 100MW.

Previously, on 12 August 2021 the Minister for Mineral Resources and Energy published a Notice amending Schedule 2 of the Electricity Regulation Act 4. A few days after publication of the amended Schedule 2, the Minister of Mineral Resources and Energy on 20 August 2021 promulgated another Notice amending the previous one published on 12 August. In the second Notice, Schedule 2 of the Electricity Regulation Act was once again substituted.

The latest applicable amendment to Schedule 2 of the Electricity Regulation Act, published on 5 October 2021, is available here.