City seeks clarity on independent power procurement

11 May 2020

The City has been putting pressure on National Government for many years to reshape the energy regime in South Africa to the benefit of its residents and businesses to enable cleaner and more affordable sources of energy to be added to the mix and to promote local government energy planning.

The current Electricity Regulation Act allows the Minister of Mineral Resources and Energy to prescribe the amount and type of new generation.

The City contends it is its constitutional mandate to provide power to its customers, allowing those customers to choose the type of power they receive. This must of course be done in accordance with a nationally accepted framework and spirit of intergovernmental collaboration.

‘It is our hope that the current court matter will give the City the legal clarification it requires as the Draft New Generation Capacity Regulations that were published last week unfortunately still fall short in addressing the needs of municipalities. The Regulations allow a municipality to apply to the Minister of Mineral Resources and Energy for a determination in terms of Section 34 of the Electricity Regulation Act and require that this determination must be made in accordance with the national Integrated Resource Plan (IRP) for electricity. However, contrary to this, the City’s contestation is that it does not require a Section 34 determination (an application via the Minister and in accordance with the national IRP) but that it is free to generate and procure electricity in accordance with its statutory responsibilities to provide a secure electricity supply.

‘Over the years, the City had attempted to resolve the matter inter-governmentally, unfortunately to no avail. In addition, the Centre for Environmental Rights has joined the matter as an amicus curiae, in support of the City,’ said the City’s Executive Mayor, Alderman Dan Plato.

The City is thus asking the court for a declaratory order to the effect that it does not require a Section 34 determination, alternatively that Section 34 is unconstitutional, alternatively that the Minister should be compelled to make the determination called for by the City.

‘The City has been busy proactively preparing for a new energy future by developing a City Integrated Resource Plan, engaging National Treasury on, among others, how to set up a future City Independent Power Purchase office and also looking into the options for self-build. There is a lot of work to do and it will not happen overnight, but the City is confident that great strides can be made once the way forward has been properly illuminated,’ said the City’s Mayoral Committee Member for Energy and Climate Change, Councillor Phindile Maxiti.

Issued by Greg Wagner, Spokesperson to the Executive Mayor, Dan Plato, 11 May 2020