Independent System And Market Operator Bill scenario building: Task Team report-back

PMG 18 September 2012.

Date of Meeting:

18 Sep 2012


Mr S Njikelana (ANC) and Mr F Adams (Western Cape, ANC)


The Task Team on the Independent System and Market Operator Bill gave a report-back briefing . Government had introduced a policy that would lead to an independent system operator acting as a middle man between Eskom as the generator of electricity and the distribution network. This would also be a state owned entity, but would guarantee free access to the distribution network for both Eskom and independent power producers. A project team had been set up and planning was progressing. It was still to be determined if the best option was to leave the current transmission under Eskom or to transfer their current assets to a transmission system operator. Consultants would investigate the financial implications, as the credit rating of Eskom might be compromised by any change to the current system.

Members felt that the finalisation of the Task Team’s work was long overdue. Parliament had an obligation to complete this Bill, but it would not be possible until some time in 2013. The Department explained the importance of using proper procedure given the magnitude of the provisions of the Bill. There was discussion about the role of the National Council of Provinces. Members criticised the lack of a business plan but were assured that sound business principles were part of the implementation plan. There was a suggestion that government was dragging its heels despite the urgency being shown by the private sector to move on the legislation. The Bill could have been processed some time ago, but questions over the allocation of the transmission sector had been raised at the public hearings, and government had felt it fit to amend the Bill with a resulting delay. It had been tagged under section 75, and members of the National Council of Provinces wondered if they were wasting their time as they would have to consider the Bill at a later date.

The Committees agreed to allow the Task Team to complete their work in January 2013. The need to proceed with all due haste was emphasised, and Members could concentrate on parallel tasks while the Task Team continued.

On the concept of the Portfolio and Select Committee meeting together for briefings, the Co Chairpersons said the duplication of meetings with the Committees on a separate basis was counter-productive. Members of the DoE were too busy appearing in Parliament to carry on with their normal business. Joint sessions should be sustained wherever possible. It would be helpful that initial briefings on legislation should be considered by such joint meetings…