WHO IS NERSA
The National Energy Regulator (NERSA) is the regulatory authority established in terms of the National Energy Regulator Act, 2004 (Act No. 40 of 2004) with the mandate to undertake the functions of the Gas Regulator as set out in the Gas Act of 2001, the Petroleum Pipelines Regulatory Authority as set out in the Petroleum Pipelines Act of 2003 and the National Electricity Regulator as set out in the Electricity Act of 1987 as amended.
While the electricity industry has been regulated for the past ten years, the piped-gas and petroleum pipeline industries in South Africa will be regulated for the first time. In 2002, the Cabinet decided that the NER would be used as the basis to create the National Energy Regulator. In anticipation of the future development of these industries the Gas Act of 2001 and the Petroleum Pipelines Act of 2003 were passed to promote the orderly development of the piped-gas and petroleum pipelines industries. Both Acts mandated the establishment of a regulator.
NERSA’s mandate is further derived from written government policies as well as Regulations issued by the Minister of Minerals and Energy. NERSA is expected to proactively take necessary regulatory actions in anticipation of and in response to the changing circumstances in the energy industry.
To regulate the energy industry in accordance with government laws, policies, standards and international best practices in support of sustainable development.
To be a world-class leader in energy regulation
Utilities such as Eskom, Sasol, etc. cannot increase their regulated rates or alter their conditions of service until NERSA approves the new tariffs. To obtain approval, a utility must demonstrate that such a change is merited. The utility files an application with NERSA to "prove" that an increase is justified. The advocacy role requires that there must be an independent body to represent the side of the consumers during the tariff determination, especially the voiceless consumers.
In most countries, for example the USA, an independent body for consumers will thoroughly investigate all aspects of the utility's application and develop conclusions regarding the merits of the proposals. The independent body supports its conclusions with expert testimony in evidentiary hearings before the regulator. Often, the independent body resolves the cases through negotiated agreements with the utility.