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Department of Minerals and Energy

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Presentation on theme: "Department of Minerals and Energy"— Presentation transcript:

1 Department of Minerals and Energy
Energy Regulator Bill Presentation to NCOP Select Committee by Department of Minerals and Energy 16 September 2004

2 National Energy Regulator Bill Contents of Presentation
Background Relationship Between National Energy Regulator Bill and Electricity Act Gas Act Petroleum Pipelines Act Structure of Bill Section by Section Description Proposed Schedule for establishment Stakeholder Comments & PPC Changes

3 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 Decision December 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

4 Why? Concern over proliferation of state entities
Synergies and efficiencies Competing energy carriers need even treatment e.g. gas and electricity Cost savings Staff shared Regulators shared Shortage of regulatory skills

5 Submission to Parliament
February 2004: Submitted to Parliament Re-Submitted after General Election Zulu Translation Currently being Updated

6 Petroleum Pipelines Act
THE PRESENT SITUATION Electricity Act Petroleum Pipelines Act Gas Act

7 THE PRESENT SITUATION National Electricity Regulator Gas Regulator
Petroleum Pipelines Authority Electricity Act Petroleum Pipelines Act Gas Act

8 Petroleum Pipelines Act
THE CONCEPT National Energy Regulator Electricity Act Petroleum Pipelines Act Gas Act

9 Petroleum Pipelines Act
THE CONCEPT 2 National Energy Regulator Administers Electricity Act Petroleum Pipelines Act Gas Act

10 National Energy Regulator
Energy Regulator Bill National Energy Regulator Electricity Act No 41 of 1987 Gas Act No 48 of 2001 Petroleum Pipelines Act No 60 of 2003 Regulator Establishment Regulator Establishment Authority Establishment Matters Pertaining to Licenses etc Matters Pertaining To Licenses etc Matters Pertaining To Licenses etc

11 Structure of Bill Chapter I: Definitions and Object
Chapter 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

12 Definitions and Object
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.”

13 Establishment & Functions
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

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

15 Composition Of the three full-time Term of office 4 years
1 electricity 1 gas 1 petroleum pipelines Term of office 4 years Remuneration set by Ministers of Minerals and Energy and Finance

16 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

17 Meetings & Duties §8 Meetings of Regulator §9 Duties
Frequency, times and places Quorum: majority or 4, whichever is greater Attendance Records §9 Duties Justifiable & transparent Independency

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

19 Personnel §11 Personnel: Regulator appoints CEO CEO appoints employees
Minister may instruct use of personnel from another regulator or licensing authority Personnel actions to be professional

20 Funds §12 Funds Appropriated by Parliament
Levies under other Legislation: Gas Regulator Levies Act Electricity Act Petroleum Pipelines money Bill License fees Charges

21 Accounting & Reporting
Public Finance Management Act Separation of Accounts Costs shared in proportion to costs incurred Auditing by Auditor General §14 Reporting: PFMA applies Include: Licenses Regulations and Directives Strategies & commercial developments Safety, Health & Environment

22 Repeals & Transitional Measures
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

23 Schedule Repeals: Amends: 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: Gas Regulator Levies Act (No 75 of 2002) “Gas Operator” to “National Energy Regulator” in the Gas Act.

24 Stakeholder Comments & PPC changes
Observations Governance issues Minor improvements

25 Observations A regulator is not a company
The King Commission must not be slavishly applied The NER is what we know - not necessarily an ideal model Very few if any presenters have experience of gas or petroleum pipeline regulation

26 Governance CONCERN RESPONSE CEO/No. of full time regulators
CEO votes. 4 full time + 5 part time = 9 Appointment Minister Gender “broadly representative including gender and race” Designation CEO+gas, electricity & pipelines, “primarily responsible” 3 full time not reporting to CEO To Regulator, not to CEO

27 Governance contd. Day to day management CEO responsibility
CONCERN RESPONSE Day to day management CEO responsibility Resources (personnel and/or other for full-time members) CEO recommends Regulator determines from time to time Quorum 4 or half whichever is greater Chair not present Deputy Appointed – non-exec Chair appoints non-exec, if deputy not available

28 Governance contd. CONCERN RESPONSE Quorum for extended sessions? (e.g. hearings, tribunal) Appoint sub committees, delegate duties and functions BUT Provisions of Act apply (transparency, guidance) Accountability remains with Regulator Dual review/appeal routes Review by High Court, repeal Section 21 of Electricity Act

29 Governance contd. Eligibility part-timers: Preclude public servants?
CONCERN RESPONSE Eligibility part-timers: Preclude public servants? Minister appoints board Continuity/Term of office Elec Act – no period ICASA - Chair 5 yrs, councillors 4 yrs Competition Tribunal members – 5 years. Proposal: 4 yrs part time, 5 yrs full time

30 Further improvements (1)
Energy Regulator becomes “National Energy Regulator” “Other agreements” – deleted “unsound mind” – courts in SA understands this term Offences “dishonesty” – Exempt “10 years” prior to appointment conviction Offence involving dishonesty Sentence of imprisonment without the option of a fine for any other offence served Removed if Ditto

31 Further improvements (2)
What happens to fines? Section 213(1) of Constitution into National Revenue Fund Specify safety responsibility? Not necessary Commencement: “at a date determined by the Minister on or after 1 June 2005”

32 Further improvements (3)
Notifying public of meetings/agenda: Regulator must make rules Act in interests of? “duty to balance the interests of all South Africans “ Present views at “own expense” - Removed

33 Further improvements (4)
What other services? “in terms of this Act” Allocation of money: money appropriated by Parliament allocated to 3 accounts in proportion to costs unless otherwise determined by Parliament Money received from an industry paid into that industry account

34 Further improvements (5)
Annual report requirements: “access to network infrastructure or summaries thereof where appropriate; tariffs or tariff structures set or approved or summaries thereof where appropriate”; access to network infrastructure or summaries; tariffs or tariff structures set or approved or summaries NER decisions in force: carried over

35 Further improvements (6)
Access to sensitive information protected in terms of Promotion of Access to Information Act, 2000 (Act No. 2 of 2000) Sub-committees of Regulators established – Act applies to them Judicial review of administrative actions At the High Court In accordance with Promotion of Administrative Justice Act, 2000 (Act No. 3 of 2000) Appeals to High Court - decision of the Energy Regulator sitting as a tribunal

36 Energy Regulator Implementation Plan

37 END

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