Govt a step closer to easing municipalities’ reliance on Eskom

The Department of Mineral Resources and Energy has kicked off a public consultation process which will pave the way for municipalities to directly source their own electricity from independent power producers, in a move expected to reduce over-reliance on state-owned power utility Eskom.

The draft amendments to the Electricity Regulations on New Generation Capacity were published on Tuesday for public input, according to the department.

The process of allowing municipalities to generate power was first announced by President Cyril Ramaphosa during the State of the Nation Address, as the country battled intermittent load shedding by Eskom, which impacted households and further battered the country’s already weak economy.

“The draft amendments are aimed at clarifying the regulatory regime applicable to municipalities for procurement or development of power generation capacity,” the department said in a statement.

“The amendments will ensure orderly development that is in line with the Integrated Resource Plan and municipal Integrated Development Plans.”

In his address in February, Ramaphosa said the regulations would enable municipalities “in good financial standing” to procure their own power from independent power producers.

The public has 30 days from the date of gazette to provide comments.

The state-owned power utility supplies most of the power used in the country, but the company, which is hobbled by debt and aging infrastructure, has increasingly been battling to provide a steady supply. 

Years of neglecting maintenance of its aging coal-fired power stations caused ongoing problems, plunging the country into darkness. The City of Cape Town had been at the forefront of calling for electricity regulations reforms and threatened to take government to court over its inaction to address the matter.

Eskom’s finances have also been hamstrung by debt owed to it by municipalities, which stood at R26.4 billion at the end of October 2019. Last year, the utility attached Emfuleni Municipality assets over its unpaid account.