SLG – Gas regulation in South Africa

As a responsible gas trader, the SLG group is a licensee of the National Energy Regulator of South Africa (NERSA). This ensures compliance with NERSA regulations and that of its stakeholders.


NERSA is a regulatory authority established as a juristic person in terms of Section 3 of the National Energy Regulator Act, 2004 (Act No. 40 of 2004). In executing its mandate, NERSA endeavours to balance the conflicting interests of both licensed entities and end-users.


Its mandate is anchored in four primary Acts:

· The National Energy Regulator Act of 2004

· The Electricity Regulation Act of 2006

· The Gas Act of 2001

· The Petroleum Pipelines Act of 2003


As a licensee, various elements of SLG’s business are regulated and have license conditions which are ministered by NERSA.


Trading Licenses

SLG is licensed to trade within various jurisdictions in Gauteng and KZN and holds separate trading licenses for each of the provinces. One of the conditions of these licenses is for SLG to comply with the Gas Act of 2001 and in particular observe Section 22 off the said Act to ensure that gas to customers is priced in a non-discriminatory manner.


Furthermore, gas prices are subject to the maximum price that NERSA approves for SLG in line with its mandate, and customers are not to be charged above this maximum price. Section 22 of the gas act allows for discrimination between customers on a clearly and objectively defined basis such as volume, term of contract, distance and any other approved discriminating factors.


Gas Infrastructure Licenses

As a legal requirement, SLG applies to the regulator for the approval of a construction license for the construction of any distribution or transmission infrastructure which is then followed by an operating license application to NERSA. Failure to obtain the respective licenses constitutes a breach of license conditions.


Gas Tariffs

In order to gain access to third party pipeline infrastructure, the owners or licensees that operate these pipelines are required to charge tariffs to third party shippers or transporters. These tariffs are approved by NERSA and are determined using publicly available tariff guidelines and formulas. All licensee applications are published by NERSA for public comment and input prior to the approval of the transportation tariff structure. The Gas Act does not provide for the approval of tariffs for distribution pipelines and as such licensees are required to submit their tariff applications to the regulator for information purposes only.


The Gas Amendment Bill that is currently being enacted seeks to address such gaps and this issue will therefore be resolved when the bill is legislated.

Source:

T: +27 12 401 4600

W: www.nersa.org.za


For more information contact: SLG

T: +27 31 812 0555

W: www.slgas.co.za

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