GOVERNMENT MOVES ON ELECTRICITY DISTRIBUTION SECTOR

Issued by: Department of Minerals and Energy

Consultation with relevant stakeholders will pave the way for the implementation of proposals to restructure the distribution sector of the electricity supply industry the Minister of Minerals and Energy, Mr Penuell Maduna, has announced. The Cabinet has approved the recommendations of the Electricity Restructuring interdepartmental Committee. The Committee was indirectly appointed by Cabinet, as the successor to the National Electrification Forum (1993/4) and the Electricity Working Group (1995/6). These recommendations include

• in principle, the consolidation of the electricity distribution industry into the maximum number of financially viable and semi-independent regional electricity distributors. The number of regional distributors still has to be determined;
• consultation by the Ministers of Minerals and Energy, of finance, of Public enterprises and of Provincial Affairs and Constitutional Development, with major stakeholders;
• the introduction of cost-reflective tariffs, an electrification levy and a capped tax for part funding of municipal services. The tariffs, and subsidies and tax will be fully transparent;
• the levy on electricity sales will be paid into an electrification fund which will be administered at a national level;
• the appointment of a full-time restructuring team to investigate detailed issues and involving major stakeholders in the planning of the transformation process and in moving towards a new dispensation.

We are fortunate that the major players in the electricity supply industry understand and accept the need for transformation. It is important that they support the direction Government is giving", Mr Maduna said. "The next step will be for us to consult with the leaders in Provincial Government, Local Government organisations, Eskom, organised labour, organised business, the National Electricity Regulator and others. They will form part of the process that will shape the future of an effective and efficient electricity supply industry in South-Africa".

ISSUED BY: MINISTER OF MINERALS AND ENERGY, PM MADUNA ENQUIRIES: DR WO BARNARD (012) 317-9219, FAX (012) 322-5224 DATE: 6 MARCH 1997