Municipalities Join Eskom's Challenge to Trading Licences

Municipalities have collectively joined Eskom in opposing energy regulator Nersa's approval of trading licences for private companies in the absence of clear rules for the activity.

- Antoinette Slabbert

Through their representative body, the South African Local Government Association (Salga), they have called on Nersa to suspend further such approvals pending the finalisation of a regulatory framework for trading.

In a statement this week, Salga further urged Nersa to engage municipalities "as equal partners in developing rules that uphold the developmental mandate of local government".

Eskom's challenge This follows Eskom embarking on a court challenge to Nersa's earlier approval of five trading licences and one import/export licence. Nersa has subsequently approved another two trading and two import/export licences, with several more under consideration.

Eskom objects to the approval of the licences. At the same time, there is no regulatory framework in place, and these traders will cherry-pick the best clients currently buying electricity from Eskom and municipalities, thus undermining their sustainability and ability to cushion the poor from electricity tariffs through cross-subsidies.

In the meantime, Nersa has begun finalising the framework but has indicated that this could take up to a year.