Electricity Regulation Act, 2006 (Act No. 4 of 2006) > Chapter I : Interpretation

In this Act, unless the context indicates otherwise—

"ancillary services"

means those services necessary to support the continuous and secure operation of an electric power system and necessary to maintain reliable operations of the national transmission power system and interconnected distribution power systems, including, but not limited to, those services necessary for voltage and reactive power control, automatic generation control, frequency control and black start capabilities;

[Definition inserted by section 1(a) of the Electricity Regulation Amendment Act, 2024, Notice No. 5139, GG51100, dated 20 August 2024 - effective 1 January 2025 per Proclamation Notice 236 of 18 December 2024 with exceptions]

"balance responsible"

means taking physical and financial responsibility for maintaining real-time balancing at specified metering points by submitting forecasts and participating in the energy market;

"balance responsible party"

means a licensed or registered generator, distributor or trader that is responsible for balance responsible activities, and which is accountable through the balancing mechanism for deviations;

"balancing mechanism"

means a mechanism used by the system operator to balance the supply and demand of electricity in real time on the power system by cost effective dispatching of generation and demand resources;

"central purchasing agency"

means the entity assigned to fulfil the role of the wholesale buyer to maintain system integrity during, and after, the transition to a competitive electricity market;

"chief executive officer"

[Definition deleted by section 1(b) of the Electricity Regulation Amendment Act, 2024, Notice No. 5139, GG51100, dated 20 August 2024 - effective 1 January 2025 per Proclamation Notice 236 of 18 December 2024 with exceptions]

"customer"

means a person who purchases electricity or a service relating to the supply of electricity;

"Department"

means the department responsible for mineral resources and energy;

[Definition inserted by section 1(c) of the Electricity Regulation Amendment Act, 2024, Notice No. 5139, GG51100, dated 20 August 2024 - effective 1 January 2025 per Proclamation Notice 236 of 18 December 2024 with exceptions]

"Director-General"

means the Director-General of the Department;

"direct supply agreement"

means an agreement for the sale of electricity between a generation licensee or registrant or trader, acting in its capacity as such, and a customer, whether such electricity is supplied directly or through a transmission power system or a distribution power system, provided that the customer is not a transmitter, distributor or system operator or trader;

"dispatching"

means the scheduling, coordination and management of the flow of electricity produced by generation facilities into and out of a transmission power system or an interconnected distribution power system, including scheduling, coordinating and managing the start-up and shut-down of those facilities, and ‘dispatch’ has a corresponding meaning;

"distribution"

means the conveyance of electricity through a distribution power system excluding trading, and "distribute" and "distributing" have corresponding meanings;

"distribution licensee"

means a holder of a licence to operate a distribution power system;

[Definition inserted by section 1(d) of the Electricity Regulation Amendment Act, 2024, Notice No. 5139, GG51100, dated 20 August 2024 - effective 1 January 2025 per Proclamation Notice 236 of 18 December 2024 with exceptions]

"distribution power system"

means a network for the conveyance of electricity which operates at or below a nominal voltage of 132kV but above 11kV

[Definition substituted by section 1(e) of the Electricity Regulation Amendment Act, 2024, Notice No. 5139, GG51100, dated 20 August 2024 - not yet in operation per Proclamation Notice 236 of 18 December 2024]

"distributor"

means a person who distributes electricity;

"end user"

means a user of electricity who consumes such electricity;

[Definition substituted by section 1(f) of the Electricity Regulation Amendment Act, 2024, Notice No. 5139, GG51100, dated 20 August 2024 - effective 1 January 2025 per Proclamation Notice 236 of 18 December 2024 with exceptions]

"generation"

means the production of electricity by any means, and "generate"and "generating" have corresponding meanings;

"generation licensee"

means a holder of a licence to operate a generation facility in terms of section 4(a)(i)(aa);

[Definition inserted by section 1(g) of the Electricity Regulation Amendment Act, 2024, Notice No. 5139, GG51100, dated 20 August 2024 - effective 1 January 2025 per Proclamation Notice 236 of 18 December 2024 with exceptions]

"generator"

means a person who generates electricity;

"independent power producer"

means any person in which an organ of state does not hold a direct or indirect controlling interest, which undertakes or intends to undertake the development of new generation capacity or the generation of electricity pursuant to a section 34 determination;

[Definition inserted by section 1(h) of the Electricity Regulation Amendment Act, 2024, Notice No. 5139, GG51100, dated 20 August 2024 - effective 1 January 2025 per Proclamation Notice 236 of 18 December 2024 with exceptions]

"integrated resource plan"

means an indicative, forward-looking plan for electricity generation, which reflects national policy on electricity planning, which plan specifies the types of energy sources and technologies from which electricity may be generated and indicates the amount of electricity that is to be generated from each of such sources or technologies;

[Definition substituted by section 1(i) of the Electricity Regulation Amendment Act, 2024, Notice No. 5139, GG51100, dated 20 August 2024 - effective 1 January 2025 per Proclamation Notice 236 of 18 December 2024 with exceptions]

"interconnected distribution power system"

means a distribution power network that is interconnected to a transmission power system;

[Definition inserted by section 1(j) of the Electricity Regulation Amendment Act, 2024, Notice No. 5139, GG51100, dated 20 August 2024 - effective 1 January 2025 per Proclamation Notice 236 of 18 December 2024 with exceptions]

"legacy independent power producer contract"

means a power purchase agreement that has been concluded prior to the launch of the competitive electricity market;

"licence"

means a licence issued under this Act;

"market operator"

means a person licensed to operate a trading platform for power market participants and who takes no ownership of the energy traded;

"market transaction"

means a transaction that occurs in a competitive environment, either on a competitive trading platform or bilaterally;

"licensee"

means the holder of a licence granted or deemed to have been granted by the Regulator under this Act;

"Minister"

means the Minister of Mineral Resources and Energy;

[Definition substituted by section 1(k) of the Electricity Regulation Amendment Act, 2024, Notice No. 5139, GG51100, dated 20 August 2024 - effective 1 January 2025 per Proclamation Notice 236 of 18 December 2024 with exceptions]

"multi-market"

means a hybrid market model accommodating market transactions, physical bilateral transactions and regulated transactions;

[Definition inserted by section 1(l) of the Electricity Regulation Amendment Act, 2024, Notice No. 5139, GG51100, dated 20 August 2024 - effective 1 January 2025 per Proclamation Notice 236 of 18 December 2024 with exceptions]

"Municipal Finance Management Act"

means the Local Government: Municipal Finance Management Act, 2003 (Act No. 56 of 2003);

[Definition inserted by section 1(a) of Act No. 28 of 2007]

"Municipal Structures Act"

means the Local Government: Municipal Structures Act, 1998 (Act No. 117 of 1998);

[Definition inserted by section 1(a) of Act No. 28 of 2007]

"Municipal Systems Act"

means the Local Government: Municipal Systems Act, 2000 (Act No. 32 of 2000);

[Definition inserted by section 1(a) of Act No. 28 of 2007]

"municipality"

means a category of municipality that has executive authority over and the right to reticulate electricity within its area of jurisdiction in terms of the Municipal Structures Act;

[Definition inserted by section 1(a) of Act No. 28 of 2007]

"National Energy Regulator Act"

means the National Energy Regulator Act, 2004 (Act No. 40 of 2004);

"national transmission power system"

means the interconnected transmission power system used for the transmission of electricity produced by generation facilities for purposes of the supply of electricity to customers within and outside South Africa, above 132kV;

[Definition inserted by section 1(m) of the Electricity Regulation Amendment Act, 2024, Notice No. 5139, GG51100, dated 20 August 2024 - effective 1 January 2025 per Proclamation Notice 236 of 18 December 2024 with exceptions]

"new generation capacity"

means additional electricity capacity, including capacity derived from new generation facilities, the expansion of existing facilities, or existing facilities not previously connected to the national transmission power system, or an interconnected distribution power system, other than—

(a)	the capacity of generation facilities for own use;

(b)	the capacity of generation facilities that supply electricity to end users pursuant to direct supply agreements;

(c)	the capacity of generation facilities referred to in item 1 of Schedule 2 to the Act; and

(d)	the capacity of generation facilities for export, which have been approved by the Minister;

"person"

includes any organ of state as defined in section 239 of the Constitution;

"physical bilateral transaction"

means a transaction entered into by generators, customers and traders for energy production which involves the conclusion of a power purchase agreement to meet demand and supply as required by the system operator;

[Definition inserted by section 1(n) of the Electricity Regulation Amendment Act, 2024, Notice No. 5139, GG51100, dated 20 August 2024 - effective 1 January 2025 per Proclamation Notice 236 of 18 December 2024 with exceptions]

"power market participants"

means participants that meet the qualifying criteria set, and choose to participate, in the market platform established by the market operator;

"power purchase agreement"

means an agreement between a generator and a buyer, for the sale and purchase of electricity or electricity generation capacity;

"prescribe"

means prescribe by regulation or rule;

"registrant"

means a person registered with the Regulator in terms of section 9;

[Definition inserted by section 1(p) of the Electricity Regulation Amendment Act, 2024, Notice No. 5139, GG51100, dated 20 August 2024 - effective 1 January 2025 per Proclamation Notice 236 of 18 December 2024 with exceptions]

"regulated transaction"

means a transaction that requires regulatory approval or oversight, specifically where the exercise of market power is likely or evident (for example, network charges);

"price"

means a charge for electricity to an end-user or customer reflecting the cost to serve that end-user or customer and may include a tariff determined by the Regulator, and a surcharge, tax, levy or duty imposed by a municipality in terms of section 229 of the Constitution of the Republic of South Africa, 1996;

[Definition substituted by section 1(o) of the Electricity Regulation Amendment Act, 2024, Notice No. 5139, GG51100, dated 20 August 2024 - effective 1 January 2025 per Proclamation Notice 236 of 18 December 2024 with exceptions]

"Regulator"

means the National Energy Regulator established by section 3 of the National Energy Regulator Act;

"reticulation"

means the conveyance of electricity through a reticulation power system which operates at or below 11kV excluding trading, and ‘‘reticulate’’ and ‘‘reticulating’’ have corresponding meanings;

[Definition substituted by section 1(p) of the Electricity Regulation Amendment Act, 2024, Notice No. 5139, GG51100, dated 20 August 2024 - not yet in operation per Proclamation Notice 236 of 18 December 2024]

"service delivery agreement"

means an agreement between a municipality and an institution or person providing electricity reticulation, either for its own account or on behalf of the municipality;

[Definition inserted by section 1(b) of Act No. 28 of 2007]

"service provider"

means a person or institution or any combination of persons and institutions which provide a municipal service in terms of a service delivery agreement;

[Definition inserted by section 1(b) of Act No. 28 of 2007]

"supply"

means trading, system operation, export and import and the generation, transmission or distribution of electricity;

[Definition substituted by section 1(q) of the Electricity Regulation Amendment Act, 2024, Notice No. 5139, GG51100, dated 20 August 2024 - effective 1 January 2025 per Proclamation Notice 236 of 18 December 2024 with exceptions]

"system operation"

means the operation of the national transmission power system in real time, including dispatching, scheduling of transmission and ancillary services, generation outage coordination, transmission congestion management and coordination, and such other activities as may be required for the reliable and efficient operation of the national transmission power system;

[Definition inserted by section 1(r) of the Electricity Regulation Amendment Act, 2024, Notice No. 5139, GG51100, dated 20 August 2024 - effective 1 January 2025 per Proclamation Notice 236 of 18 December 2024 with exceptions]

"system operator"

means the person who is responsible for system operation;

"tariff"

means a charge to a customer or end user in respect of a licensed activity or registered activity, other than a surcharge, tax, levy or duty imposed by a municipality in terms of section 229 of the Constitution of the Republic of South Africa, 1996;

[Definition substituted by section 1(s) of the Electricity Regulation Amendment Act, 2024, Notice No. 5139, GG51100, dated 20 August 2024 - effective 1 January 2025 per Proclamation Notice 236 of 18 December 2024 with exceptions]

"trader"

means a person who trades in electricity;

[Definition inserted by section 1(t) of the Electricity Regulation Amendment Act, 2024, Notice No. 5139, GG51100, dated 20 August 2024 - effective 1 January 2025 per Proclamation Notice 236 of 18 December 2024 with exceptions]

"trading"

means the wholesale or retail buying and selling of electricity, and ‘trade’ has a corresponding meaning;

[Definition substituted by section 1(u) of the Electricity Regulation Amendment Act, 2024, Notice No. 5139, GG51100, dated 20 August 2024 - effective 1 January 2025 per Proclamation Notice 236 of 18 December 2024 with exceptions]

"trading platform"

means a platform where power market participants conduct trade;

[Definition inserted by section 1(v) of the Electricity Regulation Amendment Act, 2024, Notice No. 5139, GG51100, dated 20 August 2024 - effective 1 January 2025 per Proclamation Notice 236 of 18 December 2024 with exceptions]

"transmission"

means the conveyance of electricity through a transmission power system, excluding system operation and trading, and ‘transmit’ and ‘transmitting’ have corresponding meanings;

[Definition substituted by section 1(w) of the Electricity Regulation Amendment Act, 2024, Notice No. 5139, GG51100, dated 20 August 2024 - effective 1 January 2025 per Proclamation Notice 236 of 18 December 2024 with exceptions]

"transmission development plan"

means the plan for the development of the national transmission power system referred to in sections 34(6)(b) and 35(3A);

[Definition inserted by section 1(x) of the Electricity Regulation Amendment Act, 2024, Notice No. 5139, GG51100, dated 20 August 2024 - effective 1 January 2025 per Proclamation Notice 236 of 18 December 2024 with exceptions]

"transmission power system"

means a network for the conveyance of electricity which operates above a nominal voltage of 132kV including assets that are approved by the Regulator to be part of the transmission power system;

[Definition substituted by section 1(y) of the Electricity Regulation Amendment Act, 2024, Notice No. 5139, GG51100, dated 20 August 2024 - effective 1 January 2025 per Proclamation Notice 236 of 18 December 2024 with exceptions]

"Transmission System Operator SOC Ltd"

means a juristic person established in terms of section 34A(1);

[Definition inserted by section 1(z) of the Electricity Regulation Amendment Act, 2024, Notice No. 5139, GG51100, dated 20 August 2024 - effective 1 January 2025 per Proclamation Notice 236 of 18 December 2024 with exceptions]

"transmitter"

means a person who manages and maintains a transmission power system;

[Definition substituted by section 1(zA) of the Electricity Regulation Amendment Act, 2024, Notice No. 5139, GG51100, dated 20 August 2024 - effective 1 January 2025 per Proclamation Notice 236 of 18 December 2024 with exceptions]

"this Act"

includes any regulation or rule made or issued in terms thereof;

"vertically integrated licensee"

means a person who holds one or more of the licences listed in section 4(a)(i), but excludes a person who only holds licences in terms of section 4(a)(i)(bb) and (cc); and

[Definition inserted by section 1(zB) of the Electricity Regulation Amendment Act, 2024, Notice No. 5139, GG51100, dated 20 August 2024 - effective 1 January 2025 per Proclamation Notice 236 of 18 December 2024 with exceptions]

"vesting contract"

means a contract or other financial arrangement between the National Transmission Company South Africa SOC Ltd and an Eskom generator or a distribution licensee, as the case requires, for the sale of a specified amount of electricity at a price determined by the Regulator as a mechanism to facilitate the transition to a competitive market.

Electricity Regulation Act, 2006 (Act No. 4 of 2006)

Chapter I : Interpretation

1. Definitions

"ancillary services"

"balance responsible"

"balance responsible party"

"balancing mechanism"

"central purchasing agency"

"chief executive officer"

"customer"

"Department"

"Director-General"

"direct supply agreement"

"dispatching"

"distribution"

"distribution licensee"

"distribution power system"

"distributor"

"end user"

"generation"

"generation licensee"

"generator"

"independent power producer"

"integrated resource plan"

"interconnected distribution power system"

"legacy independent power producer contract"

"licence"

"market operator"

"market transaction"

"licensee"

"Minister"

"multi-market"

"Municipal Finance Management Act"

"Municipal Structures Act"

"Municipal Systems Act"

"municipality"

"National Energy Regulator Act"

"national transmission power system"

"new generation capacity"

"person"

"physical bilateral transaction"

"power market participants"

"power purchase agreement"

"prescribe"

"registrant"

"regulated transaction"

"price"

"Regulator"

"reticulation"

"service delivery agreement"

"service provider"

"supply"

"system operation"

"system operator"

"tariff"

"trader"

"trading"

"trading platform"

"transmission"

"transmission development plan"

"transmission power system"

"Transmission System Operator SOC Ltd"

"transmitter"

"this Act"

"vertically integrated licensee"

"vesting contract"