Picture: Reuters

JOHANNESBURG - The national Regulator of South Africa (Nersa) has cited the increasing number of court cases against it among its main challenges in the 2016/2017 financial year. 

In its recently-released annual report, Nersa singled out last year’s High Court bid by various energy intensive industrial companies based in Nelson Mandela Bay, Eastern Cape, to challenge its approval of an additional R11.2-billion increase for Eskom through the Regulatory Clearing Account.

The regulatory body also said it was also receiving more complaints “because more people were becoming aware of Nersa’s role in the electricity industry. 

Furthermore, an increasing number of complainants are no longer satisfied with mediation and are requesting arbitration,” Nersa said.

It pointed out South African Wind Energy Association’s (Sawea’s) complaint against Eskom for failing to comply with the Ministerial Determination. 

This relates to Eskom’s public refusal to enter into power purchase agreements with Preferred Bidders arising from government’s Renewable Energy Independent Power Producer Procurement Programme. 

Sawea wants Nersa impose the maximum legislated penalty of 10% of Eskom’s annual daily turnover for each day that Eskom continues to delay the procurement programme. 

Sawea lodged its complaint with Nersa in October last year.

Early this year the Supreme Court of Appeal upheld Nersa and Eskom’s appeal of an August 2016 High Court ruling that Nersa’s approval of approval of Eskom’s multi-year price determination (MYPD) Regulatory Clearing Account application for 2013/14 was unlawful.

However, on the regulation of petroleum pipelines, Nersa said the provision of third party access to uncommitted storage capacity remained at a limited scale. 

The regulator said in terms of the Petroleum Pipelines Act, owners of storage facilities must inform Nersa of excess capacity in their facilities. Such excess capacity is made available to third parties, especially emerging petroleum companies.
Improved access to infrastructure for the movement and storage of petroleum products is critical to emerging companies’ growth and expansion because it enhances their ability to import fuel.

“Third-party access to uncommitted storage capacity in the petroleum pipelines sector remains problematic,” said Nersa chairman, Jacob Modise.  

Nersa said in the past financial year Horizon Petrochemicals submitted a  complaint about third party access to storage capacity.  

“This was the first formal complaint lodged with the Energy Regulator to investigate. The Energy Regulator decided that since there is only uncommitted capacity for petrol and diesel at the two licensed facilities, there is no capacity available to store the product type that (Horizon Petrochemicals) wanted to store; and therefore was of view that the complaint is not valid.”

The regulator said it had received a number of applications from historically disadvantaged South Africans who wanted to enter the petroleum pipelines industry. But it said the new entrants did not provide proper funding information for their projects and as such could not be granted licences. “A project has been launched to develop a framework to assess proof of funding,” Nersa said.

It also flagged “gaps” in current legislation and regulations regarding the electricity and piped gas industries. It said the deficiencies hampered the regulator’s ability to effectively regulate the industries. Nersa referred to the delay in gazetting the regulations for small scale embedded generators.

“The fact that regulatory control in the entire supply chain of the regulated industries is limited, raises issues of Nersa’s strategic positioning as well as policy gaps. Political dialogue is necessary to influence policy changes,” said Modise.