1. Energy Regulator Bill Presentation to Parliamentary Portfolio Committee by Department of Minerals and Energy 3 August 2004

2. National Energy Regulator Bill Contents of Presentation Background Relationship Between National Energy Regulator Bill and Electricity Act Gas Act Petroleum Pipelines Act Structure of Bill Section by Section Description Proposed Schedule for establishment

3. Main Events April 2002: Cabinet Approved a Multi-Sector Regulator Electricity Gas Petroleum Pipelines DME Undertook Study to Ascertain How Best to Give Effect to Cabinet’s Decision December 2003 Cabinet Approved Energy Regulator Bill be Submitted Directly to Parliament for Consideration Not sent for public comment as merely an amalgamation of other Acts

4. Why? Concern over proliferation of state entities Synergies and efficiencies Competing energy carriers need even treatment e.g. gas and electricity Cost savings Shortage of regulatory skills

5. Submission to Parliament February 2004: Submitted to Parliament Re-Submitted after General Election Zulu Translation Currently being Updated

6. THE PRESENT SITUATION Electricity Act Gas Act Petroleum Pipelines Act

7. THE PRESENT SITUATION Electricity Act Gas Act Petroleum Pipelines Act National Electricity Regulator Gas Regulator Petroleum Pipelines Authority

8. THE CONCEPT Electricity Act Gas Act Petroleum Pipelines Act National Energy Regulator

9. THE CONCEPT 2 Electricity Act Gas Act Petroleum Pipelines Act National Energy Regulator Administers

10. Energy Regulator Bill Matters Pertaining to Licenses etc Regulator Establishment National Energy Regulator Matters Pertaining To Licenses etc Regulator Establishment Matters Pertaining To Licenses etc Authority Establishment Electricity Act No 41 of 1987 Gas Act No 48 of 2001 Petroleum Pipelines Act No 60 of 2003

11. Structure of Bill Chapter I: Definitions and Object Chapter II: National Energy Regulator Establishment & Functions Composition & Vacation of Office Meetings & Duties Decisions Personnel Funds, Accounting & Reporting Chapter III: General Provisions Repeal of Sections of Electricity, Gas & Petroleum Pipelines Acts Transition Measures Schedule

12. Definitions and Object Definitions As per existing Acts Object of Act “The object of this Act is to establish a National Energy Regulator for the regulation of the electricity, piped gas and petroleum pipelines industries.”

13. Establishment & Functions §3 Establishment: Energy Regulator established as juristic person §4 Functions: Undertake the functions of Gas Regulator & Petroleum Pipelines Regulatory Authority from 1 April 2005 Undertake the functions of National Electricity Regulator from 1 June 2005

14. Composition §5 Composition: Three full time & five part time regulators

15. Composition Of the three full-time 1 electricity 1 gas 1 petroleum pipelines Term of office 4 years Remuneration set by Ministers of Minerals and Energy and Finance

16. Regulators: Requirements &Vacation of Office §6 Membership Requirements: Requirements SA citizen Collectively representative Impartial objective Terminate conflicts of interest Disqualifications Insolvent Convictions Appointment process Gazette call for nominations §7 Vacation of Office Compulsory; unsound mind, misses > 2 meetings Resignation

17. Meetings & Duties §8 Meetings of Regulator Frequency, times and places Quorum: majority or 4, whichever is greater Attendance Records Open to the Public §9 Duties Justifiable & transparent Independency

18. Decisions §10 Decisions: In writing In public interest Within powers Reasons given Public (except when confidential) Review by High Court

19. Personnel §11 Personnel: Regulator appoint CEO CEO appoint employees Minister may instruct use of personnel from another regulator or licensing authority Personnel actions to be professional

20. Funds §12 Funds Appropriated by Parliament Levies under other Legislation: Gas Regulator Levies Act Electricity Act Petroleum Pipelines money Bill License fees Charges

21. Accounting & Reporting §13 Accounting: Public Finance Management Act Separation of Accounts Costs shared in proportion to costs incurred Auditing by Auditor Geneal §14 Reporting: PFMA applies Include: Licenses Regulations and Directives Strategies & commercial developments Safety, Health & Environment

22. Repeals & Transitional Measures §15 Repeals: Refer to Schedule (corresponding sections of three acts) §16 Transitional Provisions: CEO of National Electricity Regulator is CEO of National Energy Regulator Staff of National Electricity Regulator are staff of National Energy Regulator Assets & Liabilities of National Electricity Regulator

23. Schedule Repeals: Repeals regulator/authority established by: Electricity Act (No 41 of 1987) Gas Act (No 48 of 2001) Petroleum Pipelines Act (No 60 of 2003) Amends: Definitions of regulator/authority refer to the Energy Regulator established by the National Energy Regulator Bill in the following: Electricity Act (No 41 of 1987) Gas Act (No 48 of 2001) Petroleum Pipelines Act (No 60 of 2003) Gas Regulator Levies Act (No 75 of 2002) “Gas Operator” to “National Energy Regulator” in the Gas Act.

24. Memorandum of Objects Consultation: Cabinet approved consultation not necessary as this Bill is merely an amalgamation of sections of other Acts that have already been through a consultation process. Financial Implications: None to state as the Regulator is financed by the industries that it serves. Parliamentary Procedure: Section 75 Bill as the Bill does not affect Provinces

25. Energy Regulator Implementation Plan

26. END