RED Two for electricity delivery

8 August 2005

South Africa’s second Regional Electricity Distributor (RED) is scheduled for launching in Gauteng province early in 2006. The first, known as RED One, was signed into operation in Cape Town in July.

Plans are to set up six such distributors across the country, combining the distribution function of power utility Eskom with that of 187 municipalities already distributing electricity in the country.

RED Two will service Ekurhuleni, Motheo District Municipality, Mangaung, Matjabeng, Maluti-A-Phofung, Metsimaholo, Sol Plaatjie, Gamagara and Dikgatlong Local Municipalities.

This is according to EDI Holdings CEO Phindile Nzimande, who briefed the National Members Assembly of the South African Local Government Association (Salga) in Cape Town on Friday.

“The target is to launch the second RED towards early 2006,” Nzimande said. “The sequencing is being finalised and an announcement will be made by the Department of Minerals and Energy.”

EDI Holdings is a public entity set up by government to oversee the establishment of the distributors.

“The establishment of REDs needs to be done in a way that will ensure service delivery in an efficient and sustainable manner,” Nzimande added.

The distributors are established primarily to provide competitive electricity tariffs and offer an efficient service.

They comprise Eskom’s distribution and local authorities. The latter will buy electricity from power generators such as Eskom at wholesale prices determined by the National Electricity Regulator.

Explaining progress made thus far in the establishment of the other REDs, Nzimande said that 33 municipalities had signed cooperative agreements as at January 2005, with 25 still in negotiations.

In his 2004 State of the Nation Address, President Thabo Mbeki said the process of establishing these structures would be completed by January 2007.

Source: BuaNews