Download - Energy Regulator Bill
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Energy Regulator Bill
Presentation toNCOP Select Committee
byDepartment of Minerals and Energy
16 September 2004
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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 establishmentStakeholder Comments & PPC Changes
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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
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Why?
Concern over proliferation of state entitiesSynergies and efficienciesCompeting energy carriers need even treatment e.g. gas and electricityCost savings Staff shared Regulators shared
Shortage of regulatory skills
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Submission to Parliament
February 2004: Submitted to Parliament
Re-Submitted after General Election
Zulu Translation Currently being Updated
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THE PRESENT SITUATION
Electricity Act Gas Act Petroleum
Pipelines Act
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THE PRESENT SITUATION
Electricity Act Gas Act Petroleum
Pipelines Act
National Electricity Regulator
Gas Regulator
Petroleum Pipelines Authority
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THE CONCEPT
Electricity Act Gas Act Petroleum
Pipelines Act
NationalEnergy
Regulator
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THE CONCEPT 2
Electricity Act Gas Act Petroleum
Pipelines Act
NationalEnergy
Regulator
Administers
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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
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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
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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.”
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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
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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
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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
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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
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Meetings & Duties
§8 Meetings of Regulator Frequency, times and places Quorum: majority or 4, whichever is greater Attendance Records
§9 Duties Justifiable & transparent Independency
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Decisions
§10 Decisions: In writing In public interest Within powers Reasons given Public (except when confidential) Review by High Court
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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
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Funds
§12 Funds Appropriated by Parliament Levies under other Legislation:
Gas Regulator Levies Act Electricity Act Petroleum Pipelines money Bill
License fees Charges
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Accounting & Reporting
§13 Accounting: 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
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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
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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.
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Stakeholder Comments & PPC changes
1) Comments2) Observations3) Governance issues4) Minor improvements
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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
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GovernanceCONCERN 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
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Governance contd.
CONCERN RESPONSE
Day to day management CEO responsibility
Resources (personnel and/or other for full-time members)
CEO recommendsRegulator determines from time to time
Quorum 4 or half whichever is greater
Chair not present Deputy Appointed – non-execChair appoints non-exec, if deputy not available
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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
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Governance contd.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
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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
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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”
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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
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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
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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
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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
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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
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END