BuaNews (Tshwane)
Karen Pretorius
1 July 2005
Cape Town — Minerals and Energy Minister Lindiwe Hendricks is to launch the country's first Regional Electricity Distributor (RED) here on Monday.
The National Energy Regulator granted a licence for the first RED 1, which goes into operation today in the City of Cape Town.
REDs are established primarily to provide competitive electricity tariffs and offer an efficient electricity service.
The launch of RED 1 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.
REDs will comprise Eskom and local authorities that will buy electricity from power generators at wholesale prices determined by the National Energy Regulator.
It is expected that REDs will enable access to electricity for all in the long term.
The City of Cape Town is the first municipality to meet the criteria - based on factors such as revenue management and customer service - to host a RED.
Agreements will be signed on Monday between the RED company, the City and Eskom.
The City of Cape Town and Eskom will hand over electricity distribution to the regional distributor over a transition period of 12 to 18 months.
Phindile Nzimande, the chief executive officer of EDI Holdings - a public entity set up by the Department of Minerals and Energy to oversee the establishment of Regional Electricity Distributors - said this was a milestone in the restructuring of electricity distribution.
This will "make it more efficient and responsive to the challenges of sustainable socio-economic development", she said.
In his State of the Nation Address in May last year, President Thabo Mbeki announced that the first Regional Electricity Distributors would be ready by June 2005.
He said the process of establishing these structures would be completed by January 2007.
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