Who pushes the buttons? Investigating the regulatory governance of retail electricity tariff setting in South Africa through institutional analysis and development

Kelly, Patrick (2015-12)

Thesis (MPhil)--Stellenbosch University, 2015.

Thesis

ENGLISH ABSTRACT: The rapid increase in South African electricity prices in the past eight years has been overseen by a proactive, policy-oriented regulator, NERSA. Regulatory governance theory proposes that regulation is most effective when the roles of different organisations are clearly defined. While the laws establishing the regulator comply with this requirement, effectiveness of regulation is challenged by a weak ministry, overlapping spheres of regulatory influence and competing goals amongst the parties involved. It is hypothesised that this impacts the outcomes of the regulatory institution. Using Institutional analysis and development as a framework, the interactions between the regulator, the energy ministry, municipal electricity distributors and National Treasury are investigated. Attempts to change the institutional rules have generally failed because of the threat they posed to the constitutional and financial interests of municipalities. The regulator, with support from National Treasury, has achieved success in ensuring compliance by municipalities to its administrative processes and its prescribed tariff escalation rates. It has been less successful at ensuring standardisation of business tariffs across electricity distributors. The regulator’s tariff objectives have prioritised protection of the poor rather than economic development. The major pro-poor initiative of the regulator is the inclining block tariff which has effectively subsidised electricity consumption of low usage households. This is primarily at the expense of municipalities, rather than other consumers.

AFRIKAANS OPSOMMING: Die aansienlike styging in die Suid-Afrikaanse elektrisiteits pryse die afgelope agt jaar was onder die toesig van ‘n baie sterk, proaktiewe beleids georienteerde reguleerder, NERSA. Reguleeringsbestuurs-teorie stel voor dat bestuur mees effektief is wanneer die rolle van verskillende organisasies duidelik gedefinieer is. Wanneer die wette wat die reguleerder vestig, aan die vereistes voldoen, word die effektiwteit getoets deur swak medewerking, oorvleulde tereine van gereguleerde invloed en kompenterende doelwitte tussen die betrokke partye. Die veronderstelling is dat dit ‘n invloed sal he op die resultate van die reguleerder. Die interaksie tussen die reguleerder, minister van energie, munisipale elektrisiteits verspreiders en Nasionale Tesourie is deur middel van Institusionele analise en ontwikkelings raamwerk ondersoek. Pogings om die wetgewende reels te verander was onsuksesvol as gevolg van die bedreiging tot die konstisionele en finansiele belange van munisipaliteite. Die reguleerder, in samewerking met Nasionale Tesourie, was grootliks daarvoor verantwoordelik dat munisipaliteite die voorgeskrewe administratiewe prosesse en tarief verhogings nakom. Die reguleerder was egter minder susksesvol om die besigheids tariewe tussen elektrisiteits verspreiders te standardiseer. Die reguleerder se tarief mikpunt was die beskerming van armes eerder as ekonomiese ontwikkel. Die reguleerder se grootste pro-arm initiatief is die subsideering van lae gebruiks huishoudings se elektrisiteits verbruik deur toenemende blok tariewe. Hierdie is ten koste van munisipaliteite eerder as ander gebruikers.

Please refer to this item in SUNScholar by using the following persistent URL: http://hdl.handle.net/10019.1/97734
This item appears in the following collections: