The Portfolio Committee on Mineral Resources and Energy, having considered and deliberated on the Independent Electricity Management Operator (IEMO) Bill [B14-2019], a Private Member's Bill submitted by Natasha Mazzone, has recommended to the National Assembly that the Bill is not desirable.
The IEMO Bill was tabled to Parliament in October 2019, followed by a committee briefing by Mazzone in December 2019. Subsequent to her briefing, the committee gave the Department of Mineral Resources and Energy an opportunity to respond to the Bill in February.
The committee considered the Bill in March, following input from the Department of Public Enterprises (DPE) and power utility Eskom.
The DPE and Eskom again responded to the IEMO Bill in a joint meeting of the Portfolio Committee on Mineral Resources and Energy and the Portfolio Committee on Public Enterprises in August.
On September 1, the committee held deliberations on the Bill and considered a motion of nondesirability, which was followed by the adoption of the committee report on September 2. The report will now be tabled in the National Assembly for a final consideration and adoption.
The IEMO Bill seeks to break the monopoly of Eskom and introduce competition with independent private companies at the electricity generation level. It proposes that Eskom should compete with other electricity generators in terms of selling and buying electricity.
The committee says it agrees with the statement of the DPE that the best practice globally is for the State to retain 100% ownership of the grid operator as this is regarded as a strategic asset.
The committee is of the firm view that the IEMO Bill is not desirable, considering that the Minster of Public Enterprises has already tabled to Parliament a special paper on the Eskom roadmap.
The roadmap outlines steps required to restructure Eskom and proposes the establishment of a fully regulated transmission entity that is 100% owned by Eskom. The roadmap further makes provision for possible generation subsidiaries to introduce inter-company competition and drive efficiency in generation.
The roadmap further proposes the formation of a distribution entity under Eskom Holdings, and the entity will be authorised to buy from another sister entity, namely transmission, as well as from licensed municipal generators and embedded generation.
It is against this backdrop that the committee firmly believes that government should be given an opportunity to execute and implement the reform processes as outlined in the roadmap, which proposes restructuring of Eskom into Eskom Holdings with three new subsidiaries, namely generation, transmission and distribution.