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DA Renames Independent Electricity Wholesaler Bill

July 16, 2019

Parliament

16 July 2019

The name of the Democratic Alliance’s (DA) proposed legislation on setting up an independent electricity wholesaler has been changed.

In February 2019, the DA announced its intention to table the Draft Independent System and Market Operator (ISMO) bill in parliament.

The draft bill, drawn up by Natasha Mazzone, a DA member of parliament, describes Eskom as a “zombie enterprise that is both overinflated and riddled with corruption”.

It is also pointed out that Eskom currently serves as both the main generator and the central buyer and distributor of electricity.

“It actively marginalises independent power producers (IPPs) to maintain the stranglehold that it has over energy production to the expense of end-users, who have to endure hours of load-shedding as a result. It has become an archaic entity suffering from institutionalised maladministration so severe that it threatens every aspect of South African life.”

The draft bill seeks to set up the ISMO as the “entity responsible for system operation and the purchase of electricity from electricity generators”.

ISMO will operate as electricity wholesaler selling electricity at a wholesale tariff.

The proposed legislation calls for Eskom to continue operating as an electricity generator while ISMO, operating as a public-private partnership, will take ownership and control over the national electricity grid and serve as the central buyer and distributor of electricity from all electricity generators.

The draft bill also stipulates that metros will be allowed to buy electricity directly from independent power producers in certain circumstances.

In a nutshell, the creation of ISMO will ensure that Eskom’s monopoly is broken down and that the market is opened up to all power producers.

In Government Gazette 42576, the DA has given notice of its intention to change the name of the proposed legislation to the Independent Electricity Management Operator Bill of 2019.

The plan is to table the draft bill in parliament during the second half of 2019.