RED One signed into operation in Cape Town

Posted On Monday, 04 July 2005 02:00 Published by eProp Commercial Property News
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The establishment of Regional Electricity Distributors would assist government in improving access and service delivery of electricity

Infrastructure IndustryThe establishment of Regional Electricity Distributors would assist government in improving access and service delivery of electricity, said Minerals and Energy Minister, Lindiwe Hendricks.

The country's first Regional Electricity Distributor, known as RED One was signed into operation at a ceremony at the City of Cape Town today.

Speaking at the ceremony, Minister Hendricks said the restructuring of the electricity distribution industry was aimed at improving governance of the sector and to stimulate economic development.

"We want to improve access and the service delivery of electricity. We believe that we will achieve this by consolidating the electricity industry," she said.

REDs will comprise Eskom and local authorities that will buy electricity from power generators at wholesale prices determined by the National Energy Regulator.

The launch of RED One is expected to lead the way for five other REDs, resulting from the amalgamation of the distribution function of power utility Eskom, with that of 187 municipalities already distributing electricity in the country.

An operating agreement was signed between RED One and ESKOM, which commits the stakeholders to continued good service delivery.

Minister Hendricks said work was being done on the Electricity Regulation Bill, to address limitations placed by current legislation on electricity distribution industry reform.

The legislation would be tabled in Parliament by the end of August.

"We will soon thereafter embark on a process to fast-track the Electricity Distribution Restructuring legislation to ensure that work becomes easier and faster, "she said.

The City of Cape Town is the first municipality in the country where a RED has been established.

Mayor of Cape Town, Nomaindia Mfeketo said RED One would maintain 'relative price stability and reasonable tariff increases'.

"We will strive as a matter of principle to ensure affordability, equity, sustainability and cost recovery in the price of electricity," she said.

The Mayor also announced that Councillor Saleem Mowzer, Mayoral Committee Member for trading services, had resigned to become Chief Executive Officer of RED One.

Last modified on Monday, 04 November 2013 10:25

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