Independent Electricity Management Operator Bill
Attached is the Independent Electricity Management Operator Bill, as well as its explanatory memo which provides as follows:
“This Bill seeks to create the Independent System and Market Operator (ISMO) as the entity responsible for system operation and the purchase of electricity from electricity generators. ISMO will function as electricity wholesaler, selling electricity to distributors and large customers at a wholesale tariff. This Bill will further eliminate Eskom’s effective monopoly on the production of electricity by splitting the entity into two parts, Eskom, which will continue to function as an electricity generator, and ISMO, which will take ownership and control over the national electricity grid and serve as the central buyer and distributor of electricity from all electricity generators. It also seeks to allow metropolitan municipalities to purchase electricity directly from IPPs in certain circumstances.”
Section 40 of the Bill provides:
- (1) Notwithstanding any provision to the contrary, a metropolitan municipality will be authorised to purchase electricity directly from a generator, subject to—
(a) that metropolitan municipality showing competency, proficiency and innovation in the management and maintenance of its electricity reticulation;
(b) that metropolitan municipality has received a clean audit report for the preceding financial year; and
(c) such procurement of electricity being—
(i) conducted in an open and transparent manner; and
(ii) the result of a competitive bidding process.
(2) Where the execution of a direct agreement between a metropolitan municipality and a generator for the provision of electricity as envisaged in subsection (1) will require the use of infrastructure under the control of IEMO, IEMO may charge a reasonable and fair fee for the use of such infrastructure as part of the conclusion of such agreement.