The National Energy Regulator of South Africa (NERSA) has opened a second round of public consultation on revised rules for electricity trading, seeking comment on the framework proposed for bilateral trading, wheeling, tariff reform and the phased introduction of retail competition.
The regulator said Version 3 of the Rules for Electricity Trading has been “significantly expanded and revised based on previous stakeholder comments”. The rules intend to support the phased implementation of bilateral electricity trading arrangements and the transition towards a competitive retail electricity market.
The Version 3 consultation paper sets out the areas where NERSA is seeking comment, including proposed eligibility criteria for customers and generators, tariff reforms and non-bypassable charges, direct supply agreements, reconciliation and billing processes, virtual wheeling, trader reporting requirements and the proposed phases of retail market opening.
Customer and generator eligibility
Among the questions set out in the paper is whether the proposed Phase 1 threshold for contestable customers is appropriate. Under the draft rules, customers connected to Eskom Distribution or municipal networks need a minimum notified maximum demand of 1 MVA, interval metering, time-of-use tariff structures and compliance with applicable Grid Code requirements before entering into direct supply agreements with licensed traders or generators. The paper also asks whether smaller customers or additional customer categories should be included.
NERSA is also seeking comment on whether generators with capacity above 100 kW, licensed or registered with the regulator, should be eligible to participate and whether smaller facilities should be included.
Tariff reform and charges
On tariff reform, the consultation paper sets out questions on the proposed introduction of non-bypassable charges for all grid-connected customers, irrespective of supplier choice or the extent of self-generation. Network costs, legacy renewable energy procurement costs, ancillary services, generation capacity costs, subsidies, social obligations and sector regulation costs are proposed for recovery, wholly or partly, through these charges.
NERSA is seeking views on whether the proposed structure will provide fair cost recovery during the market transition and whether any of the proposed cost categories should be added or excluded.
Direct supply and billing
The consultation paper also sets out questions on direct supply agreements and the circumstances when a primary retailer may refuse to facilitate an agreement. Under the draft rules, proposed blocking grounds include debt older than 28 days, unsupported metering and meter-data mismatches.
It further addresses proposed reconciliation, billing and top-up supply arrangements for wheeled electricity. The draft states that primary retailers will continue to invoice customers for total metered consumption, recover non-bypassable charges and apply wheeling credits while traders or generators invoice separately for energy supplied under direct supply agreements.
Virtual wheeling
The draft proposes virtual wheeling for qualifying customers with connections above 100 kVA after the South African Wholesale Electricity Market goes live but only once charging arrangements, operating procedures, systems and a further virtual-wheeling framework have been put in place.
The consultation includes proposed provisions for virtual wheeling after the South African Wholesale Electricity Market goes live. Under the draft, virtual wheeling will be available to qualifying customers with connections above 100 kVA subject to charging, settlement, billing, metering and other operational requirements.
Written comments must be submitted to TradingRulesDevelopmentTeam@nersa.org.za by July 29. NERSA will announce the date of a public hearing after the written comment period closes. The regulator is aiming to approve and gazette the rules in August.
