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On Wednesday, the Portfolio Committee on Energy adopted the Independent System and Market Operator (ISMO) Bill with amendments.
 
Over and above the adoption of the Bill, Chairperson of the Committee, Mr Sisa Njikelana highlighted the significance of the recommendation made by the Committee which aims to enhance the conducive environment for ISMO to operate. “Throughout the processing of the Bill the need for restructuring of the electricity sector became more obvious,” said Mr. Njikelana.
 
Recommendations:
o Conduct a due diligence study in order to determine the feasibility and implications of the transfer of transmission assets and to submit a final report to the National Assembly by 30 November 2013
 
o Conduct a cost benefit analysis of the possibility of incorporating the transmission assets into ISMO
 
o Further conduct a cost benefit analysis of establishing a Transmission System Operator (TSO); or any other arrangement suitable to the South African situation.
 
o Ensure that the efforts on the restructuring of the entire electricity sector be addressed as matter of urgency.
 
The Bill will provide for the establishment of an Independent System and Market Operator as a state-owned entity which will provide an independent system operation to ensure safe, secure and efficient operation of the integrated power system, trading of electricity at wholesale level and to provide for matters connected.
 
In terms of the Bill, the ISMO will create an independent structure responsible for system operations and the purchase of electricity from electricity generators. The ISMO will further serve as an electricity wholesaler, selling electricity to distributors and large customers at wholesale tariffs.
 
Mr Njikelana commended all those who handled the processing of the Bill given its significance to the electricity sector. He emphasised that ISMO will be fully owned by government. The entry of ISMO will ensure improved operational efficiency in the electricity supply industry, he added.