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Democratic Alliance Drafts ISMO Bill

February 26, 2019


The Democratic Alliance (DA) wants to table a private member’s bill in parliament seeking to establish an independent electricity wholesaler.

The Draft Independent System and Market Operator (ISMO) bill’s explanatory summary was published in Government Gazette 42237.

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.

Government sought to introduce a similar bill in 2012 but it lapsed at the end of the 4th parliament.

The plan is to table the draft bill during the first half of 2019.

Comment on the proposed content of the draft bill is invited within 30 days of the date of publication.

The draft bill is not yet available.