Energy Regulator Bill

Presentation toParliamentary Portfolio Committee

byDepartment of Minerals and Energy

3 August 2004

National Energy Regulator BillContents of Presentation

BackgroundRelationship Between

National Energy Regulator Bill and Electricity Act Gas Act Petroleum Pipelines Act

Structure of BillSection by Section DescriptionProposed Schedule for establishment

Main Events

April 2002: Cabinet Approved a Multi-Sector Regulator Electricity Gas Petroleum Pipelines

DME Undertook Study to Ascertain How Best to Give Effect to Cabinet’s DecisionDecember 2003 Cabinet Approved Energy Regulator Bill be

Submitted Directly to Parliament for Consideration Not sent for public comment as merely an amalgamation

of other Acts

Why?

Concern over proliferation of state entitiesSynergies and efficienciesCompeting energy carriers need even treatment e.g. gas and electricityCost savingsShortage of regulatory skills

Submission to Parliament

February 2004: Submitted to Parliament

Re-Submitted after General Election

Zulu Translation Currently being Updated

THE PRESENT SITUATION

Electricity Act Gas Act Petroleum

Pipelines Act

THE PRESENT SITUATION

Electricity Act Gas Act Petroleum

Pipelines Act

National Electricity Regulator

Gas Regulator

Petroleum Pipelines Authority

THE CONCEPT

Electricity Act Gas Act Petroleum

Pipelines Act

NationalEnergy

Regulator

THE CONCEPT 2

Electricity Act Gas Act Petroleum

Pipelines Act

NationalEnergy

Regulator

Administers

Energy Regulator Bill

MattersPertaining

toLicenses

etc

RegulatorEstablishment

National Energy Regulator

MattersPertaining

ToLicenses

etc

RegulatorEstablishment

MattersPertaining

To Licensesetc

AuthorityEstablishment

Electricity ActNo 41 of 1987

Gas ActNo 48 of 2001

Petroleum Pipelines ActNo 60 of 2003

Structure of Bill

Chapter I: Definitions and ObjectChapter II: National Energy Regulator

Establishment & Functions Composition & Vacation of Office Meetings & Duties Decisions Personnel Funds, Accounting & Reporting

Chapter III: General Provisions Repeal of Sections of Electricity, Gas & Petroleum

Pipelines Acts Transition Measures

Schedule

Definitions and Object

Definitions As per existing Acts

Object of Act “The object of this Act is to establish

a National Energy Regulator for the regulation of the electricity, piped gas and petroleum pipelines industries.”

Establishment & Functions

§3 Establishment: Energy Regulator established as juristic

person

§4 Functions: Undertake the functions of Gas Regulator

& Petroleum Pipelines Regulatory Authority from 1 April 2005

Undertake the functions of National Electricity Regulator from 1 June 2005

Composition§5 Composition: Three full time & five part time regulators

Energy Regulator Functional Structure

T e ch n ica l S p ec ia lis ts

L eg a l

F in an ce

H R

C h ie f E xe cu tive O ffice r

E N E R G Y R E G U L A T O RIm p lem e nt P o lic y/R e g u la tio ns

3 F u ll t im e + 5 p art-t im e R e gu la to rs

M IN IS T E R M IN E R A L S & E N E R G YP re sc rib e P o licy/R e gu la tio ns

A p p o in ts R e g u la to rs

Composition

Of the three full-time 1 electricity 1 gas 1 petroleum pipelines

Term of office 4 yearsRemuneration set by Ministers of Minerals and Energy and Finance

Regulators: Requirements &Vacation of Office

§6 Membership Requirements: Requirements

SA citizen Collectively representative Impartial objective Terminate conflicts of interest

Disqualifications Insolvent Convictions

Appointment process Gazette call for nominations

§7 Vacation of Office Compulsory; unsound mind, misses > 2 meetings Resignation

Meetings & Duties

§8 Meetings of Regulator Frequency, times and places Quorum: majority or 4, whichever is greater Attendance Records Open to the Public

§9 Duties Justifiable & transparent Independency

Decisions

§10 Decisions: In writing In public interest Within powers Reasons given Public (except when confidential) Review by High Court

Personnel

§11 Personnel: Regulator appoint CEO CEO appoint employees Minister may instruct use of personnel from

another regulator or licensing authority Personnel actions to be professional

Funds

§12 Funds Appropriated by Parliament Levies under other Legislation:

Gas Regulator Levies Act Electricity Act Petroleum Pipelines money Bill

License fees Charges

Accounting & Reporting

§13 Accounting: Public Finance Management Act Separation of Accounts Costs shared in proportion to costs incurred Auditing by Auditor Geneal

§14 Reporting: PFMA applies Include:

Licenses Regulations and Directives Strategies & commercial developments Safety, Health & Environment

Repeals & Transitional Measures

§15 Repeals: Refer to Schedule (corresponding sections

of three acts)

§16 Transitional Provisions: CEO of National Electricity Regulator is CEO

of National Energy Regulator Staff of National Electricity Regulator are

staff of National Energy Regulator Assets & Liabilities of National Electricity

Regulator

Schedule

Repeals: Repeals regulator/authority established by:

Electricity Act (No 41 of 1987) Gas Act (No 48 of 2001) Petroleum Pipelines Act (No 60 of 2003)

Amends: Definitions of regulator/authority refer to the Energy Regulator

established by the National Energy Regulator Bill in the following:

Electricity Act (No 41 of 1987) Gas Act (No 48 of 2001) Petroleum Pipelines Act (No 60 of 2003) Gas Regulator Levies Act (No 75 of 2002)

“Gas Operator” to “National Energy Regulator” in the Gas Act.

Memorandum of Objects

Consultation: Cabinet approved consultation not necessary

as this Bill is merely an amalgamation of sections of other Acts that have already been through a consultation process.

Financial Implications: None to state as the Regulator is financed by

the industries that it serves.

Parliamentary Procedure: Section 75 Bill as the Bill does not affect

Provinces

Energy Regulator Implementation Plan

Apr May Jun Jly Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun

Energy Regulator Bill / Parliament

Promulgation Energy Regulator Bill Risk: Parliament may not pass Bill

Energy Regulator Act Into Force

Advertise Regulator Posts

Interviews Posts & Approval

Appointment and Training

Regulator Training NORAD

Regulator: Gas & Pet Pipeline Fns Gas/PP

Current Electricity Regulator

Regulator: Add Electricity Function

2004 2005

END