NERSA Consultation Paper Power Conservation Programme …€¦ · The Electricity Regulation Act,...

NERSA Consultation Paper

Power Conservation Programme (PCP) Rules

December 2008

Power Conservation Programme Rules Consultation Paper IDMS no: 40794v1

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TABLE OF CONTENTS

1. INTRODUCTION........................................................................................................... 3

2. BACKGROUND............................................................................................................ 3

3. PRINCIPLES FOR POWER CONSERVATION............................................................ 4

4. CONSULTATION PROCESS ....................................................................................... 5

5. RULES.......................................................................................................................... 6 Energy Conservation Management Scheme rules ................................................... 7 Energy Growth Management rules .......................................................................... 66 Energy Efficiency Specification ................................................................................ 74 Right To Consume (RTC) Trading rules.................................................................. 80


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1. INTRODUCTION NERSA is a statutory body established as a juristic person in terms of section 3 of the National Energy Regulator Act, 2004 (Act no. 40 of 2004), with specific responsibilities detailed in Electricity Regulation Act, 2006 (Act No. 4 of 2006) as amended, Gas Act and Petroleum Pipelines Act. The Electricity Regulation Act, 2006 (Act No 4 of 2006), hereinafter referred to as “the Act”, enables the Energy Regulator to regulate electricity prices and tariffs in terms of section 4(a)(ii). The Act further enables the Energy Regulator to issues rules in terms of section 47 of the Act Considering the above, NERSA has received an application to consider adopting rules for a Power Conservation Programme, which are hereunder included. NERSA is therefore requesting stakeholder comments on the rules. The rules must also be read in conjunction with the draft Electricity Regulations on Deviation from Approved Tariffs, due to be finalised by the Department of Minerals and Energy by the end of 2008.

2. BACKGROUND South Africa’s current energy situation is underpinned by higher than anticipated growth in electricity demand, and limited investment in new generation infrastructure over the last 15 years which resulted in limited additional supply coming online. This has consequently led to the generation net reserve margin falling below the 10% - well below conventional industry benchmark of at least 15%. The net reserve margin is likely to remain low for the next few years, and to even diminish, in the absence of significant intervention to improve supply and reduce demand. There are currently limited solutions or mechanisms that can be put in place in the short term to improve supply, and thus only demand side activities can stabilise the situation and minimise the risk of disruptive load shedding. In line with government’s plan to ensure that an overall 10% reduction in energy consumption is achieved and sustained, the National Electricity Response Team (NERT) has developed a Power Conservation Programme (PCP) as a medium term solution to the energy capacity shortage. The programme is designed to accelerate the achievement of energy savings through behaviour change and promoting the use of demand side management (DSM). The reduction in consumption will also provide Eskom with the ‘breathing space’ necessary to address unplanned maintenance and possible slippages in the tight planned timeline for bringing new capacity onto the grid between 2008 and 2013.


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Research carried out by Eskom and the Human Sciences Research Council (HSRC) has shown that an equal 10% energy reduction across all power-utilising sectors is not optimal for the economy. A more favourable approach is to set differentiated targets for different sectors, taking into account (i) their linkages with other sectors, (ii) their structural ability to reduce electricity consumption with minimal impact on production and (iii) their current levels of efficiency of electricity utilisation. The Department of Minerals and Energy (DME) will publish these respective sector targets; to be part of the Energy Conservation Scheme.

Core to the PCP strategy is a mandatory energy conservation scheme and a strategy for managing new electricity connections and growth in consumption, to align with available capacity. The Energy Conservation Scheme (ECS) will be phased in to all targeted customers, starting with the largest customers, namely, those who consume above 25GWh per annum, while energy efficiency and demand side management activities will be rolled out concurrently to the rest of the customer base. The ECS will require all participating consumers to achieve energy savings targets, with associated incentives and penalties which will become effective when the scheme becomes mandatory – once all legislative and regulatory enablers are in place. Trading the “Right to Consume” (RTC) aims to ensure that the national reduction target is met by facilitating the reallocation of consumption rights through bilateral trading and auctions of allocations. The Energy Growth Management (EGM) strategy is designed to prioritise new connections requiring more than 20MVA of power, based on availability of supply and the economic value/benefit the projects will have on the economy. This is due to the narrow gap between demand for electricity and system supply capability. Theoretically, any growth in new electricity connections will thus depend on how successful the ECS measures will be.

3. PRINCIPLES FOR POWER CONSERVATION

The Act prescribes the tariff principles in section 16, as follows: Section 16(1) A licence condition determined under section 15 relating to the setting or approval of prices, charges and tariffs and the regulation of revenues- (a) must enable an efficient licensee to recover the full cost of its licensed

activities, including a reasonable margin or return; (b) must provide for or prescribe incentives for continued improvement of the

technical and economic efficiency with which services are to be provided; (c) must give end users proper information regarding the costs that their

consumption imposes on the licensee's business; (d) must avoid undue discrimination between customer categories; and


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(e) may permit the cross-subsidy of tariffs to certain classes of customers.

Section 16(2) A licensee may not charge a customer any other tariff and make use of provisions in agreements other than that determined or approved by the Regulator as part of its licensing conditions. Section 16(3) Notwithstanding subsection (2), the Regulator may, in prescribed circumstances, approve a deviation from set or approved tariffs.

The objects of the Act further states in section 2(a) that: The objects of this Act are to- (a) achieve the efficient, effective, sustainable and orderly development and operation of electricity supply infrastructure in South Africa. This section of the Act strengthens the electricity conservation measures being introduced, because these measures are aimed at establishing the required electricity generation capacity reserve margin which is essential for the orderly development and operation of the electricity supply infrastructure. Balancing the needs of all industry participants in applying conservation measures, the Energy Regulator is empowered in terms of section 42(1)(b) to “if it is a dispute between a customer or end user on the one hand and a licensee, registered person, a person who trades, generates, transmits, or distributes electricity on the other hand, settle that dispute by such means and on such terms as the Regulator thinks fit.”

4. CONSULTATION PROCESS

Stakeholders are invited to comment on the draft Power Conservation Programme rules, ahead of finalisation of the rules for a workshop. Comments must be submitted by 23 January 2009 and can either be hand delivered at the National Energy Regulator of South Africa, Kulawula House, 526 Vermeulen Street, Arcadia 0083, Pretoria; or sent by registered post to PO Box 40343, Arcadia 0007, Pretoria; or emailed to [email protected].

Enquiries can be directed to Mr Simphiwe Makhathini or Ms Nokwazi Makanya at the following contact details:

Tel: (012) 401 4600

Fax: (012) 401 4700

Email: [email protected]


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Table 1: Provisional Timelines for approval of Power Conservation Programme rules

ITEM/ACTIVITY TARGET DATE

Publication of consultation paper 12 December 2008

Deadline for submission of comments to NERSA 23 January 2009

Stakeholder workshop 12 February 2009

2nd Draft consultation paper 19 February 2009

Approval by Electricity Subcommittee 25 February 2009

Deadline for submission of comments to NERSA 17 March 2009

Public Hearing 2 April 2009

Decision by Energy Regulator 30 April 2009

5. RULES The following includes rules for the Energy Conservation Scheme, Energy Growth Management, which includes a supplement of Energy Efficiency Specifications and Rights to Consume (RTC) Trading.


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ENERGY CONSERVATION MANAGEMENT SCHEME RULES

CHAPTER 1 – GENERAL

1 INTERPRETATION

1.1 In the Rules, notwithstanding the definitions set out in the Act –

1.1.1 a word or expression in the masculine gender includes the feminine;

1.1.2 a natural person includes a juristic person and vice versa;

1.1.3 a word in the singular number includes the plural, and visa versa;

1.1.4 unless the context indicates a contrary intention, words and expressions defined in

the Rules shall bear the meanings assigned to them throughout the Rules and

cognate expressions bear corresponding meanings;

1.1.5 reference to "days" shall be construed as calendar days unless qualified by the word

"business", in which instance a "business day" will be any day other than a Saturday,

Sunday or public holiday as gazetted by the government of the Republic of South

Africa from time to time. Any reference to "business hours" shall be construed as

being the hours between 08h00 and 17h00 on any business day;

1.1.6 unless specifically otherwise provided, any number of days prescribed shall be

determined by excluding the first and including the last day or, where the last day

falls on a day that is not a business day, the next succeeding business day; and

1.1.7 a reference to "Licensee" in a rule shall mean the particular Licensee that supplies

Energy to the Customer who is applying the rule, unless the context indicates

otherwise;

1.1.8 the words "include" and "including" mean "include without limitation" and "including

without limitation". The use of the words "include" and "including" followed by a


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specific example or examples shall not be construed as limiting the meaning of the

general wording preceding it.

2 DEFINITIONS

2.1 "Abnormal Event" means an event that will result in a loss of Supplementary Energy

which is to large to be offset by generating Energy in addition to what would normally

be generated by Supplementary Generation within an ECS Year;

2.2 "Act" means the Electricity Regulation Act (Act 4 of 2006) and the regulations made

thereunder;

2.3 "Additional Load" means electricity which is required for plant, processes and/or

operations which was not previously supplied by a Licensee to the Customer;

2.4 "Adjusted Monthly Energy Allocation" means the Monthly Energy Allocation as

adjusted in terms of rule 16.8;

2.5 "Advisory Opinion" means a non-binding advisory opinion;

2.6 "Allocation Percentage" means a Customer's annual electricity consumption

allowance in respect of a Defined Load determined in accordance with rule 5.2;

2.7 "Annual Baseline Consumption" means the total estimated or metered electricity

consumption in kWh during the Baseline Period;

2.8 "Annual National Baseline Electricity Consumption" means the total electricity

consumption in terawatt-hours during the period 1 October 2006 to 30 September 2007-

(a) of the end-users of all Licensees in the Republic; and

(b) the electricity sales to all Licensees' International Customers;

2.9 "Annual Energy Allocation" means the amount of electricity in kWh which a Customer

is permitted to consume in an ECS year in respect of a Defined Load, calculated in

accordance with rules 4.5.3, 10, 12 and 14;


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2.10 "Applicable Period" shall have the meaning assigned to it in rule 9.2;

2.11 "Applicant" means a person who applies for a New Connection or Additional Load in

accordance with the EGM Rules or a person who applied for a New Connection or

Additional Load prior to the date on which the EGM comes into operation by

proclamation of the Regulator and to whom a written undertaking to supply electricity

has not yet been provided by a Licensee;

2.12 "Baseline Period" means a period of approximately 12 (twelve) months commencing

in September 2006 and ending in September 2007, which shall, for each Customer be

determined in accordance with rule 7.4;

2.13 "Baseline Period Loads" means Loads that were either fully utilised or in the process

of being Ramped-up to full utilisation during the Baseline Period;

2.14 "Baseline Supplementary Generation" means Supplementary Generation that was in

use for all or part of the Baseline Period;

2.15 "Billing Period" means the duration from one Measurement Date to the next

Measurement Date;

2.16 "Commencement Date" means the date on which the ECS comes into operation by

proclamation of the Regulator;

2.17 "Confirmed Annual Baseline Consumption" means the quantity of electricity

consumed by Customers during the Baseline Period as determined in accordance with

rule 9.5.1 or deemed in terms of rule 9.5.6, irrespective of a Customer's Annual

Baseline Consumption;

2.18 "Confirmed Annual Consumption" means –

2.18.1 in respect of Baseline Period Loads, Confirmed Annual Baseline Consumption;

2.18.2 in respect of the Post-Baseline EEC Loads, Confirmed Annual EEC Consumption; or


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2.18.3 in respect of the Post-Baseline Non-EEC Loads, Confirmed Annual Non-EEC

Consumption.

2.19 "Confirmed Annual EEC Consumption" means the average quantity of electricity

consumed by a Customer per annum in respect of a Post Baseline EEC Load, if

applicable, calculated in accordance with rule 11;

2.20 "Confirmed Annual Non-EEC Consumption" means the average quantity of

electricity consumed by a Customer per annum in respect of a Post Baseline Non-EEC

Load, if applicable, calculated in accordance with rule13;

2.21 "Consumption Profile" means the amount of electricity consumed by a Customer

during each Billing Period for the 36 (thirty-six) completed Billing Periods immediately

prior to the Effective Date. The average Consumption Profile in respect of any Billing

Period shall be the average electricity consumption of the Customer during each of the

3 (three) approximately corresponding Billing Periods in the 36 (thirty-six) month period;

2.22 "Customer" means the holder or holders of a single electricity account with a Licensee

at the Commencement Date (whether such holder is located within the Republic or

outside of the Republic) and a Licensee to the extent that a Licensee utilises electricity

supplied by another Licensee for its own consumption or for the provision of basic

municipal services;

2.23 "Defined Loads" means categories of Loads namely, Baseline Period Loads, the Post-

Baseline EEC Loads and Post-Baseline Non-EEC Loads, or any one of them as the

context may require;

2.24 "Demand Market Participation (DMP)" means the mechanism created by Eskom

Holdings Limited to ensure stability of the interconnected power system through which a

Customer agrees upfront to reduce his electricity consumption on Eskom’s request and

for a specified, agreed period of time;

2.25 "DSM" means the demand-side management initiatives of a Licensee;


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2.26 "ECS" means the energy conservation scheme, the main objective of which is to

achieve a sustainable reduction in electricity consumption in South Africa;

2.27 "ECS Year" means a 12 (twelve) month period commencing on a Customer's

Measurement Date between 16 June and 15 July in any year and ending on the

Measurement Date between 16 June and 15 July in the following year;

2.28 "Effective Date" means the day on which the ECS shall apply to a particular Customer,

being the first day immediately following the Customer's Measurement Date in the

Effective Month;

2.29 "Effective Month" means the month in which the ECS shall become applicable to a

particular Customer, as determined by the Regulator;

2.30 "EGM" means the electricity growth management strategy, the main objective of which

is to achieve the conservation of electricity by imposing certain energy efficiency

obligations on Customers and/or Applicants;

2.31 "EGM Rules" the rules governing the EGM as determined by the Regulator and

amended from time to time;

2.32 "End-user" means a user of electricity or a service relating to the supply of electricity;

2.33 "Energy" means electrical energy;

2.34 "Energy Efficiency Certificate" means a certificate prepared by an independent

professional engineer or certified energy manager who, in the Licensees sole discretion,

is suitably qualified to provide such a certificate, confirming that the equipment, facilities

or plant utilising the Load, New Connection or Additional Load complies fully with the

Energy Efficiency Specifications;

2.35 "Energy Efficiency Specifications" means the energy efficiency specifications issued

by the Regulator from time to time;

2.36 "Eskom" means Eskom Holdings Limited;


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2.37 "Essential Services" means the services referred to in rule 6.1.1;

2.38 "Excess Energy Charge" means the charge payable by a Customer, irrespective of

the applicable Tariff, for electricity consumed in a Billing Period in excess of the

Customer's Final Monthly Energy Allocation;

2.39 "Final Consumption Level" means -

(a) in respect of Post-Baseline EEC Loads, the consumption level determined in

accordance with rule 11.7.1; and

(b) in respect of Post-Baseline Non-EEC Loads, the consumption level determined in

accordance with rule 13.7.2;

2.40 "Final Monthly Energy Allocation" means the Monthly Energy Allocation or, if a

Customer has adjusted his Monthly Energy Allocation in terms of rule 16.8, the Adjusted

Monthly Energy Allocation or, where the Customer has Traded in terms of the RTC

Trading Rules, the Trade Adjusted Allocation;

2.41 "GWh" means gigawatt-hours;

2.42 "Historical Consumption Profile" means the average consumption profile of a

Customer over a consecutive period of no less than 24 (twenty four) months and no

more than 60 (sixty) months, depending on the data available, ending no later than 30

September 2007;

2.43 "Interconnected Power System (IPS)" means (i) the national transmission system, (ii)

assets connected to the national transmission system and belonging to the national

transmission network service provider, (iii) power stations connected to the national

transmission system, (iv) international interconnectors and (v) the control area for which

the System Operator is responsible;

2.44 "International Customer" means a Customer who is located beyond the boundaries of

the Republic;


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2.45 "International Utility" means an International Customer who is a national electricity

utility of a country who acquires electricity from the Republic;

2.46 "Interruptible Loads" means a Load that can be interrupted or reduced for a pre-

defined limited number of hours per annum in order to manage the security of electricity

supply as contractually agreed between Eskom Holdings Limited and a Customer;

2.47 "kVA" means kilovolt-ampere;

2.48 "kW" means kilowatt;

2.49 "kWh" means kilowatt-hours;

2.50 "Laws" means all legislation, statutes, regulations, by-laws, directives, orders, notices,

promulgations which have the force of law in the Republic or which it would be an

offence not to obey, and the common law, as amended, replaced, re-enacted, restated

or re-interpreted from time to time of the Republic;

2.51 "Licensee" means the holder of a licence to trade and distribute electricity granted or

deemed to have been granted by the Regulator under the Act;

2.52 "Licensee Customer" shall have the meaning assigned to it in rule 3.2.5;

2.53 "Load" means the electricity supply required by a Customer for his plant, processes

and/or operations;

2.54 "Load Rotation Groupings" means a group of Customers, preferably within a single

licensed area of supply, that co-operate in their savings efforts in an effort to minimize

the net impact of their savings efforts on their combined load profile;

2.55 "Load Shedding" means an interruption or reduction in the supply of electricity to the

Customer effected by a Licensee when Eskom Holdings limited /or the Licensee is

experiencing an emergency and/or a shortage of generation capacity and/or

transmission capacity and/or distribution capacity for a period of time;


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2.56 "Lower Limit" means an amount less than the Total Annual Energy Allocation and

which indicates the lowest level a Trade Participant may Trade himself into, through the

selling of RTC Units in terms of the RTC Trading Rules, without specific permission

granted by the Regulator;

2.57 "Measurement Date" means the day, during any month, on which a Customer's

electricity is measured or estimated by the Licensee for billing purposes;

2.58 "Minister" means the Minister of Minerals and Energy;

2.59 "Monthly Energy Allocation" means the maximum amount of electricity which a

Customer is permitted to use during a Billing Period, determined in terms of rule 16,

provided that the Customer has not requested an adjustment in terms of rule 16.8 and

has not traded in terms of the RTC Trading Rules;

2.60 "Monthly Utilised Capacity" for a Customer in respect of a Point of Supply is the

higher of-

(a) the maximum recorded demand in all time periods during a Billing Period at the

Point of Supply; or

(b) the Notified Maximum Demand;

2.61 "MVA" means megavolt-ampere;

2.62 "National Advisory Committee" means a committee established by the Regulator,

constituted of persons appointed by the Regulator and representatives of the energy

industry, to furnish Licensees with Advisory Opinions upon request;

2.63 "National Customer" means a Customer located within the boundaries of the Republic;

2.64 "National Priority Projects" means the projects detailed in rule 6.1.3;

2.65 "National Priority Services" means the services detailed in rule 6.1.2;

2.66 "National Savings Target" means the percentage of the Annual National Baseline


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Electricity Consumption required to be reduced to achieve a sufficient margin between

the demand for electricity and the supply of electricity, as determined by the Minister;

2.67 "New Connection" means a new Point of Supply that is supplied by a Licensee for the

first time;

2.68 "Notified Maximum Demand" means the maximum capacity in kVA, as measured

over a 30-minute integrating period, per Point of Supply that the Customer will contract

for with the relevant Licensee to make available during all time periods where there are

normal conditions and no capacity constraints on the IPS;

2.69 "Normalisation of Annual Baseline Consumption" means an adjustment to the

Annual Baseline Consumption of certain Customers pursuant to an application made in

terms of rule 9.6.1;

2.70 "Point of Supply" means a physical point on the electrical network where a Licensee

supplies electricity to a Customer;

2.71 "Post Baseline EEC Loads" shall have the meaning set out in rule 4.5.2.2;

2.72 "Post Baseline Non-EEC Loads" shall have the meaning set out in rule 4.5.2.3;

2.73 "Post-baseline Supplementary Generation" means Supplementary Generation which

was only obtained by the Customer after the Baseline Period or additional

Supplementary Generation which was obtained after the Baseline Period as a result of

an increase in the output of equipment that was used for producing the Baseline

Supplementary Generation;

2.74 "Power Conservation Program (PCP)" means a program adopted by the Minister to

achieve a sustainable reduction in energy consumption, to manage electricity growth

within the availability of supply and which consists of the ECS, the EGM and a Demand-

Side Management Strategy;

2.75 "Protected Electricity Supplies" means electricity supplied or to be supplied to

Customers which may, upon application by a Customer(s) to the Licensee be exempt or


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partially exempt from certain provisions on the Rules as determined by the Regulator

from time to time;

2.76 "PPAs" means power purchase agreements in terms of which Licensees purchase

electricity from Customers or other Licensees;

2.77 "Tariff" means either the Licensee’s regulated or agreed tariff for electricity applicable

to a Customer, as approved by the Regulator from time to time;

2.78 "Ramp-up" means a systematic increase in Load and electricity consumption to

achieve optimal operational levels;

2.79 "Regulator" means the National Energy Regulator of South Africa;

2.80 "RTC" means the right to consume electricity from a Licensee at the Tariff, which when

Traded is deemed to have been disposed of by the Trade Participant that transfers such

right to another Trade Participant resulting in a decrease in the Monthly Energy

Allocation of the Trade Participant transferring the right proportionate to the RTC Units

disposed;

2.81 "RTC Trading" means the transfer of a Customer's rights, title and interest in and to a

portion of his Month Energy Allocation to another Customer at a price agreed to,

through the sale and acquisition of RTC Units, in accordance with the RTC Trading

Rules;

2.82 "RTC Unit" means 1 MWh spread evenly over a day ;

2.83 "Republic" means the Republic of South Africa;

2.84 "RTC Trading Rules" means the rules governing RTC Trading as determined by the

Regulator and amended from time to time;

2.85 "Rules" means the rules as set out in this document, as amended by the Regulator

from time to time;


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2.86 "Sector" means classes of Customers or Customer categories or groupings of

Customers as determined by the Minister;

2.87 "Sector Savings Target" means the savings target percentage, applicable to Sectors

to achieve the National Savings Target, as determined by the Minister; subject to rule

5.8;

2.88 "Stable Consumption Level" shall have the meanings set out in-

(a) rule 11.7.3, in respect of Post Baseline EEC Loads; and

(b) rule 13.7.3, in respect of Post Baseline Non-EEC Loads;

2.89 "Supplementary Energy" means the Energy used by a Supplementary Generation

Customer as contemplated in rule 18.2.4;

2.90 "Supplementary Generation" means Energy –

2.90.1 generated by a Customer; or

2.90.2 purchased by a Customer from a third party other than from the Licensee who

ordinarily supplies Energy to the Customer,

in order for the Customer to meet all or part of his Energy requirements and for which

the Customer routinely purchases "back-up" Energy from the Licensee referred to

clause 2.90.2 above in the event of non-delivery of the Energy referred to in clause

2.90.1 and 2.90.2;

2.91 "Supplementary Generation Customers" means Customers registered as users of

Supplementary Generation;

2.92 "System Operator" means the entity licensed to control the operation of and be

responsible for the short term reliability of the IPS, which is in charge of controlling and

operating the national transmission system and dispatching generation (or balancing

the supply and demand) in real time; and


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2.93 "Total Annual Energy Allocation" means the sum of the Annual Energy Allocations

calculated in respect of each Defined Load applicable to a Customer;

2.94 "Trade Adjusted Allocation" means the Monthly Energy Allocation or the Adjusted

Monthly Energy Allocation, as the case may be, less the RTC Units disposed of or plus

the RTC Units acquired by a Customer via RTC Trading;

2.95 "Trade Participant" means a Customer to whom the ECS applies that has been

registered by the Regulator in terms of the RTC Trading Rules;

2.96 "Type-A RTC Units" means special RTC units available to Supplementary Generation

Customers at zero cost for the purpose specified in rule 18.5;

2.97 "Type-B RTC Units" means special RTC units available to Supplementary Generation

Customers, at a cost specified by the Regulator from time to time, for the purpose

specified in rules 18.5;

2.98 "Upper Limit" means an amount in excess of the Total Annual Energy Allocation,

indicating the maximum level a Trade Participant may Trade himself into, through

acquiring RTC Units in terms of the RTC Trading Rules, without specific permission

granted by the Regulator;

2.99 "Voluntary Customer" shall have the meaning assigned to it in rule 3.4.1.

3 GENERAL RULES

3.1 Application

3.1.1 The ECS shall come into operation on the Commencement Date.

3.1.2 The ECS shall, at the Commencement Date, apply to Customers with a

consumption or anticipated consumption of 25 GWh or more during 12 (twelve)

consecutive Billing Periods and shall thereafter, notwithstanding the Commencement

Date, apply to Customers or Sectors as specified by the Regulator from time to time,

from the applicable Effective Date.


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3.1.3 Licensees shall be regarded as Customers under the ECS only in respect of their

own electricity consumption, except as provided in rule 3.2.4.

3.2 Licensees' Obligations

3.2.1 All Licensees shall be required to implement the ECS and comply fully with all of the

obligations imposed upon them in the Rules from the Commencement Date to the

extent that the ECS is applicable to Customers within the Licensees' licensed area of

supply.

3.2.2 Should a Licensee, in its capacity as a supplier of electricity, be unable to implement

the ECS or comply with any of the Rules from the Commencement Date, it shall be

required to apply to the Regulator, prior to Commencement Date, for an exemption

from compliance with the provisions of the Rules which relate to the Licensee as a

supplier of electricity (rather than as a Licensee Customer as defined in rule 3.2.5)

which exemption may be granted by the Regulator subject to any terms and

conditions imposed by the Regulator.

3.2.3 An application for an exemption in terms of rule 3.2.2 shall be made by completing

the prescribed form and submitting the form together with all documentation in

support of the application.

3.2.4 Until the Licensee is able to implement the ECS and comply with all of its obligations

under the Rules, it shall be regarded by the Regulator as a Customer for the

purposes of the ECS and shall be obliged to comply with the Rules in respect of all

of the Energy which it purchases or acquires for resell as though it were a Customer.

3.2.5 Where a Licensee is regarded as a Customer in terms of rules 3.1.3 and/or 3.2.4

("Licensee Customer"), the Licensee that supplies the Licensee Customer with

electricity shall perform all the obligations of a Licensee set out in the Rules in

respect of that Licensee Customer.

3.3 Real-time System Balancing Products


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3.3.1 The System Operator may offer products to Customers with the approval of the

Regulator in terms of which the System Operator will contract with a Customer to

assist him in balancing supply and demand in real time. The Regulator shall issue a

directive to all Licensees directing how the product should be implemented and how

it will impact on the Customer’s participation in ECS.

3.4 Voluntary Participation

3.4.1 A Customer to whom the ECS is not applicable may voluntarily elect to comply with

Rules on written notice to the Licensee ("Voluntary Customer").

3.4.2 On receipt of the written notice from a Voluntary Customer a Licensee shall regard

such Voluntary Customer as any other Customer to whom the Rules apply and shall

perform all the obligations imposed on it in terms of the Rules in respect of such

Voluntary Customer.

3.4.3 A Voluntary Customer who notifies the Licensee that it wishes to comply with the

Rules shall, on delivery of such notice, be bound by all of the Rules.

3.4.4 A Voluntary Customer, that is not a Trade Participant, may on 30 (thirty) days notice

to the Licensee, opt-out of complying with the Rules.

3.4.5 A Voluntary Customer that is a Trade Participant may not opt-out of complying with

the Rules.

3.5 Dispute Resolution

In the event of any dispute between a Customer(s) and a Licensee(s) or between two or

more Licensees in respect of or arising out of the Rules, the dispute shall, on written

notification by a party to the other party or parties to the dispute, be submitted to the

Regulator for a decision in accordance with section 30 of the Act.

3.6 Guidelines

The Regulator may in accordance with the provisions of section 35 of the Act issue


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guidelines by notice in the Gazette from time to time to facilitate the proper

interpretation of the Rules.

4 PURPOSE OF THE RULES AND INTRODUCTION

4.1 The Rules set out a mechanism for deviating from the set or approved Tariffs payable

by a Customer on the occurrence of the prescribed circumstances.

4.2 The object of the ECS is to incentivise Customers to reduce their electricity

consumption by charging Customers Excess Energy Charges, in the event that the

Customer consumes more electricity in a Billing Period than his Final Monthly Energy

Allocation, and by facilitating the Trading of the electricity saved by the Customer in a

Billing Period, for the benefit of the Customer, in accordance with the Trading Rules.

4.3 In order to achieve the object set out in rule 4.2 every Customer participating in the ECS

will be required to determine the Final Monthly Energy Allocation applicable to each

Billing Period in an ECS Year. In order to determine a Monthly Energy Allocation, a

Customer must first determine -

4.3.1 the Annual Consumption Level of each Defined Load applicable to the Customer;

4.3.2 the Annual Energy Allocation of each Defined Load applicable to the Customer; and

4.3.3 the Total Annual Energy Allocation applicable to the Customer.

4.4 Once the Customer's Total Annual Energy Allocation has been determined the

Customer shall be able to determine Monthly Energy Allocations.

4.5 Total Annual Energy Allocation

4.5.1 A Customer's Total Annual Energy Allocation is the amount of electricity in kWh

which a Customer may consume in an ECS Year.

4.5.2 A Customer's Total Annual Energy Allocation shall be the sum of the Annual Energy

Allocations granted in respect of the following Defined Loads-


21

4.5.2.1 "Baseline Period Loads" being Loads that were either fully utilised or in the

process of being Ramped-Up to full utilisation during the Baseline Period;

4.5.2.2 "Post Baseline EEC Loads" being New Connections or Additional Loads where

-

4.5.2.2.1 a Licensee gave a Customer a written undertaking to supply the Customer

with a New Connection or Additional Load before the date on which the EGM

Rules comes into operation by proclamation of the Regulator, and for which

Ramp-up began after 30 September 2007 or has yet to begin, provided that

the Customer has submitted an Energy Efficiency Certificate to the Licensee

in respect of the New Connection or Additional Load; or

4.5.2.2.2 the New Connection or Additional Load is approved after the date on which

the EGM comes into operation by proclamation of the Regulator;

4.5.2.3 "Post Baseline Non-EEC Loads" being New Connections or Additional Loads

where the Licensee gave a Customer a written undertaking to supply the

Customer with a New Connection or Additional Load before the date on which the

EGM comes into operation by proclamation of the Regulator, for which Ramp-up

began after 30 September 2007 or has yet to begin, where the Customer has not

submitted an Energy Efficiency Certificate to the Licensee in respect of the New

Connection or Additional Load.

4.5.3 The Annual Energy Allocation in respect of a Defined Load shall be calculated by

multiplying the Confirmed Annual Consumption of the Defined Load by the Allocation

Percentage applicable to the Defined Load.

4.6 Confirmed Annual Consumption

4.6.1 The Confirmed Annual Consumption of-

4.6.1.1 the Baseline Period Loads shall be defined as "Confirmed Annual Baseline

Consumption" and shall be determined in accordance with rules 7, 8 and 9;


22

4.6.1.2 the Post Baseline EEC Loads shall be defined as the "Confirmed Annual EEC

Consumption" and shall be determined in accordance with rule 11; and

4.6.1.3 Post Baseline Non-EEC Loads shall be defined as the "Confirmed Annual Non-

EEC Consumption" and shall be determined in accordance with rule


23

CHAPTER 2 - ALLOCATION PERCENTAGES

5 ALLOCATION PERCENTAGES

5.1 Customers to whom Baseline Period Loads and Post Baseline Non-EEC Loads are

supplied shall be required to reduce their Confirmed Annual Consumption in respect of

such Defined Loads to achieve the applicable Sector Savings Target.

5.2 The Allocation Percentage applicable to Post Baseline EEC Customers shall be

deemed to 100% (one hundred percent).

5.3 An Allocation Percentage is determined by subtracting the Sector Savings Target, as

amended by the Minister from time to time, applicable to the Defined Load from 100%

(one hundred percent).

5.4 An International Customer who is a national electricity utility of a country who acquires

electricity from the Republic for national use in that country (but not purchased for use

by a specific End-User), is required to achieve a saving target equal to the prevailing

National Savings Target in respect of the total amount of electricity imported from the

Republic.

5.5 An International Consumer who is supplied with electricity from the Republic for use by

specific End-Users in the mining or industrial Sectors (albeit that the contract or

contracts may be with an intermediary) is required to achieve a savings target equal to

the Sector Savings Target applicable to a mining or industrial End-User, which ever is

applicable, in the Republic.

5.6 Customers shall be required to consider the Allocation Percentage of the Defined Loads

applicable to them and calculate the Annual Energy Allocation of such Defined Loads

on the publication of the Sector Savings Targets.

5.7 Where a Customer or a Defined Load has been included in an incorrect grouping or

Sector and consequently assigned the incorrect Allocation Percentage a Customer may

apply to the Licensee in writing, by completing the requisite application form and


24

attaching all the necessary documentation in support of his application, to be

reclassified to fall within the correct grouping or Sector.

5.8 If a Customer consumes electricity for multiple purposes and as such is categorised as

falling within two or more different Sectors, the Customer shall be entitled to apply to the

Licensee to vary the Sector Savings Target applicable to its total electricity

consumption, provided that -, -

5.8.1 where the Customer's electricity consumption in respect of each of the Sectors in

which it participates is greater than 10% (ten percent) of the Customer's total

electricity consumption, the weighted average of the applicable Sector Savings

Targets shall be determined in proportion to the electricity consumption in each

Sector;

5.8.2 if a Customer's electricity consumption related to its activities in a particular Sector is

less than or equal to 10% of the Customer's total electricity consumption, such

electricity consumption shall be deemed to be electricity consumption in the Sector in

which the Customer consumes the most electricity; and

5.8.3 should the Customer's electricity consumption in respect of only one of the Sectors in

which it participates be greater than 10% (ten percent) of the Customer's total

electricity consumption, all of the Customer's electricity consumption shall be deemed

to fall within that Sector;

subject to motivation by the Customer to the satisfaction of the Licensee and proof of the

Customer’s electricity consumption in the different Sectors.


25

CHAPTER 3 - PROTECTED ELECTRICITY SUPPLIES

6 PROTECTED ELECTRICITY SUPPLIES

6.1 The supply of electricity to the following Essential Services and National Priority

Services and the supply of electricity for use by the following National Priority Projects

shall be regarded by the Regulator as "Protected Electricity Supplies" for the

purposes of the ECS -

6.1.1 Essential Services

6.1.1.1 the South African Police and any security services controlled by national,

provincial or local government;

6.1.1.2 health establishments, as defined in the National Health Act 61 of 2003;

6.1.1.3 public rail transportation services except those primarily used for tourism or

entertainment purposes,

6.1.1.4 supplies of water and sanitation services to the South African public, and

6.1.1.5 public lighting and traffic lights.

6.1.2 National Priority Services

6.1.2.1 electricity provision services where the supply directly affects the generation,

transmission, distribution and/or reticulation of electricity for own use or for use by

third parties within the Republic;

6.1.2.2 providers of designated services that may be required by the System Operator

from time to time for the purpose of maintaining the stability of the IPS;

6.1.2.3 energy services where the supply directly affects the provision of gaseous or

liquid fuels for use within the Republic;

6.1.2.4 suppliers of coal, gas or water where the supply indirectly affects the provision of


26

energy supplies as contemplated in rules 6.1.2.1 and 6.1.2.3;

6.1.2.5 rail transportation services for the transport of goods; and

6.1.2.6 suppliers of water for agriculture or livestock production provided that the primary

purpose of such activity is the production of food or feedstock for the production

of food.

6.1.3 National Priority Projects

6.1.3.1 construction of power stations and electricity generation plant except those

intended for standby use;

6.1.3.2 construction of stadiums specifically designated for use during the FIFA 2010

World Cup,

6.1.3.3 construction of the King Shaka International Airport and upgrading of other

international airports, and

6.1.3.4 construction of the Gauteng Rapid Rail Link known as Gautrain.

6.2 In addition to the Protected Energy Supplies set out in rules 6.1.1, 6.1.2 or 6.1.3,

Customers or groups of similarly affected Customers may apply to the Regulator in

writing for the electricity supplied to them to be regarded as a Protected Electricity

Supply within one of the categories specified in rule 6.1 if -

6.2.1 in the Regulator's sole discretion, a service provided or to be provided by the

Customer(s) or a project carried out or to be carried out by the Customer(s) is

necessary for the health or safety of the South African public or the economic

wellbeing of the Republic; and

6.2.2 compliance with the Sector Savings Target applicable to the Customer(s) will have a

material impact on delivery of such service or project; or

6.2.3 the Customer(s) is prevented from complying with the applicable Sector Savings


27

Target due to Laws applicable to the Customer(s).

6.3 The Regulator may on receipt of an application made in terms of rule 6.2 in its sole

discretion, agree or refuse to classify the supply of electricity to the project or service

detailed in the application as a Protected Electricity Supply.

6.4 Should electricity supplied to a Customer be classified as a Protected Electricity Supply

in terms of rules 6.1 or 6.2, the Customer may be exempt from the determination of a

Total Annual Energy Allocation and/or to a full or partial exemption from the applicable

Sector Savings Target on application to the Licensee, provided that –

6.4.1 the Customer is able to demonstrate to the Licensee that either –

6.4.1.1 a minimum of 50% (fifty percent) of the Customer's Total Electricity Consumption

is directly related to the provision of one or more of the services or projects set

out in rules 6.1.1, 6.1.2 or 6.1.3 or a service or project which the Regulator has

determined to be a Protected Electricity Supply pursuant in terms of rule 6.2; or

6.4.1.2 a minimum of 20% (twenty percent) of the Customer's Total Electricity

Consumption is directly related to the provision of one or more of the services or

projects set out in rules 6.1.1, 6.1.2 or 6.1.3 or a service or project which the

Regulator has determined to be a Protected Electricity Supply pursuant to an

application made in terms of rule 6.2 and the Regulator has determined, in its

sole discretion that the Customer qualifies for the exemptions set out in rule 6.5;

and

6.4.2 the Customer demonstrates to the Licensee that the application of the Sector

Savings Target to the Customer would materially impede the Customer's service

and/or product delivery.

6.5 The Regulator shall from time to time make a determination, bearing in mind the need

to maximise the savings achieved by ECS -

6.5.1 specifying that no exemption shall be granted to particular Customers or group of


28

Customers; or

6.5.2 detailing the form of exemption which must be granted by a Licensee in certain

circumstances, which shall include but shall not be limited to –

6.5.2.1 a phased-in implementation of the applicable Sector Savings Target;

6.5.2.2 a downward adjustment of the applicable Sector Savings Target;

6.5.2.3 both a downward adjustment of the applicable Sector Savings Target and

phased-in implementation of the adjusted Sector Savings Target; or

6.5.2.4 an exemption from both the determination of a Total Annual Energy Allocation

and a full exemption from applying the Sector Savings Target applicable to the

Customer; or

6.5.3 granting Licensees the right to determine the type of exemption applicable to a

Customer or group of Customers subject to specified guidelines.

6.6 Notwithstanding rule 6.4 the Regulator may, in its sole discretion, specify alternative

additional savings objectives applicable to any Customer or group of Customers that

have been granted any form of exemption from time to time


29

CHAPTER 4 – BASELINE PERIOD LOADS

7 DETERMINATION OF ANNUAL BASELINE CONSUMPTION

7.1 In order to determine the Annual Energy Allocation of the Baseline Period Loads, it is

necessary to firstly determine a Customer's Annual Baseline Consumption in

accordance with this rule 7 and, if applicable, the Confirmed Annual Baseline

Consumption in accordance with rule 9.

7.2 Licensees shall determine the Annual Baseline Consumption of each of the Customers

in its licensed area who utilised Baseline Period Loads. As defined, a Customer's

Annual Baseline Consumption is the total estimated or metered electricity consumption

of a Customer, in respect of a single account, during the Baseline Period.

7.3 The Annual Baseline Consumption of a Point of Supply shall be calculated as part of

the Annual Baseline Consumption of a Customer who, as at the date of the notice

referred to in rule 8.1holds the account under which the Point of Supply is billed.

7.4 The Baseline Period applicable to a Customer shall commence on the day immediately

following the Customer's Measurement Date in September 2006 and shall end on the

Customer's Measurement Date in September 2007, provided that if the Customer's

Billing Period is a calendar month then the Baseline Period means 1 October 2006 to

30 September 2007.

7.5 Where the total duration of the Baseline Period, determined in accordance with rule 7.4,

is not equal to 365 (three hundred and sixty five) days, the Annual Baseline

Consumption of a Customer shall be calculated -

7.5.1 where the requisite data is available, by adding the actual daily electricity

consumption of a Customer for each of the 365 (three hundred and sixty five) days

immediately prior to, and including the last day of the Baseline Period (as

determined in accordance with rule 7.4); or

7.5.2 where the meter readings or estimated consumption necessary to calculate the


30

actual Annual Baseline Consumption of a Customer for 365 (three hundred and sixty

five) days is not available, by calculating the average daily electricity consumption in

the first month of the Baseline Period and multiplying it by the number of days that

must be added to or deducted from the Baseline Period in order for it to equal 365

(three hundred and sixty five) days and then adding that amount to or subtracting it

from the metered or estimated amount of electricity consumed by a Customer during

the Baseline Period.

7.5.3 Where a Customer commenced Ramping-up of a Baseline Period Load at any time

after the first month of the Baseline Period, the total amount of electricity consumed

by the Customer in the Baseline Period, irrespective of whether or not such

consumption was for a full 12 (twelve) month period, shall be deemed to be the

Customer's Annual Baseline Consumption. Except where the Customer falls within

one of the categories set out in rules 9.1.1, the provisions of this rule shall not

preclude the Customer from applying to a Licensee for an adjustment to his Annual

Baseline Consumption in terms of rule 10.

8 LICENSEE TO NOTIFY CUSTOMERS OF ANNUAL BASELINE CONSUMPTION

8.1 Licensees shall notify each Customer to whom the ECS is applicable of his Annual

Baseline Consumption in writing as soon as practical after the publication of the Rules

but not later than 30 (thirty) days before the first day of the Effective Month.

8.2 Where a Licensee has notified a Customer of its Annual Baseline Consumption in

writing prior to the Commencement Date, the Customer shall be deemed to have been

notified of his Annual Baseline Consumption in terms of the Rules and the date of

notification will be deemed to be the Commencement Date.

9 ADJUSTMENTS TO ANNUAL BASELINE CONSUMPTION

9.1 Special Adjustments

9.1.1 The following Customers shall, within 3 (three) months of the date on which they are

advised of their Annual Baseline Consumption in terms of rule 8.1, be entitled to


31

apply to the Regulator for an adjustment to their Annual Baseline Consumption –

9.1.1.1 Licensees regarded as Customers for the purposes of ECS as specified in rule

3.2.2 ; and

9.1.1.2 International Utilities supplied by Licensees.

9.2 The Regulator may grant an adjustment determined in accordance with the following

formula -

Adjustment = Annual Baseline Consumption x a x b ÷ 12

Where -

a = the percentage determined in terms of rule 9.2.1.1; and

b = the number of completed Billing Periods from the end of the Baseline

Period until the Effective Date ("Applicable Period");

9.2.1.1 the percentage “a” in the formula in rule 9.2.1.1 shall be equal to 4% per annum

calculated during the Applicable Period except where a Customer is unable to

demonstrate that the overall consumption within its jurisdiction has grown at an

average rate of 4% per annum or greater during the Applicable Period. In such

instances, the percentage “a” shall be equal to such lower growth rate as the

Customer is able to demonstrate.

9.2.2 No other adjustments shall be permitted in respect of the Annual Baseline

Consumption of the Customers specified in rule 9.1.

9.3 Applications for adjustments by Customers

9.3.1 Notwithstanding anything to the contrary contained in these Rules, the provisions of

rules 9.3, 9.4, 9.5, 9.6, 9.7 and 9.8 shall not apply to the Customer's specified in rule

9.1.1.

9.3.2 A Customer shall be entitled to apply to the Licensee to adjust the Annual Baseline


32

Consumption communicated to him in accordance with rule 8.1 and such

adjustment-

9.3.2.1 shall be permitted by the Licensee if the Customer's application is based on one

or more of the following grounds, in respect of the applicable account -

9.3.2.1.1 Demand Market Participation during Baseline Period;

9.3.2.1.2 Interruptible Load during Baseline Period;

9.3.2.1.3 Load Shedding during the Baseline Period;

9.3.2.1.4 metering or meter reading errors during the Baseline Period which resulted in

the billed or metered consumption in respect of the applicable account being

recorded as less than the actual consumption of that account, provided that

the adjustment shall only be permitted once the billing shortfall has been paid

for by the Customer; or

9.3.2.1.5 the transfer of a Point of Supply between accounts (provided that the

adjustment is made to both accounts) during or after the Baseline Period;

provided that the Customer furnishes the Licensee with proof of the grounds upon

which the application for the adjustment is based and proof of the extent to which

such factors or grounds impacted upon the Customer's electricity consumption

during the Baseline Period.

9.3.2.2 may be permitted by a Licensee if the Customer's application is based on one or

more of the following grounds, for increases in annualised electricity

consumption, in respect of the applicable account resulting from-

9.3.2.2.1 new connections since September 2007;

9.3.2.2.2 consumption Ramp-Up since January 2006;

9.3.2.2.3 new, additional or up-rated production or ancillary equipment or equipment


33

reinstatement since October 2006 which should be energy efficient,

particularly in respect of new equipment and facilitates;

9.3.2.2.4 equipment reinstated since October 2006;

9.3.2.2.5 abnormally low consumption during Baseline Period as a result of, inter alia, a

weak market, excessive interruptions initiated by a Licensee, abnormal

furnace shutdowns, swing producers;

9.3.2.2.6 insufficient meter readings during the Baseline Period;

9.3.2.2.7 changes of property ownership since October 2006;

9.3.2.2.8 extensions to buildings / facilities or increases in building occupancy levels

since October 2006 where an adjustment to the Customer's Annual Baseline

Consumption is required in order to meet the Customer's and the occupant's

basic daily requirement;

9.3.2.2.9 new or enhanced safety or security installations since October 2006; or

9.3.2.2.10 other circumstances as may be determined by the Regulator from time to time;

subject to motivation by the Customer to the satisfaction of the Licensee and

proof of the existence and extent of such increase in electricity consumption and,

where applicable, the extent to which the Customer is complying with the Energy

Efficiency Specifications;

9.3.2.3 may be permitted by a Licensee if a Customer's application for the adjustment of

his Annual Baseline Consumption is based on the fact that his electricity

consumption expressed in kWh was lower during the Baseline Period as a result

of energy efficiency improvements that were effected between January 2005 and

September 2007, provided that the Customer proves the existence and extent of

the energy efficiency improvements and that there has been a sustained,

measurable increase in the Customer's production per kWh consumed or any

other economic value per kWh consumed as a result thereof.


34

9.3.3 Unless approved by the Licensee in terms of rules 9.3.2.2, adjustments to a

Customer's Annual Baseline Consumption will not be permitted for increases in

electricity consumption from 1 October 2006 that result from the installation of

heating, water heating, lighting, air conditioning or home appliances, in addition to

the initial installations thereof, in any property.

9.3.4 Unless permitted by the Licensee in terms of rule 9.3.2.3, adjustments to the Annual

Baseline Consumption will not be permitted for a reduction in the consumption of

electricity supplied by Licensees due to co-generation, self-generation or energy

purchased under independent PPAs during the Baseline Period.

9.4 Procedure to be followed by a Customer in Applying for an Adjustment to Annual

Baseline Consumption

9.4.1 An application made in terms of rule 9.3.1 shall only be considered by the Licensee

if-

9.4.1.1 the designated application form is completed and signed by the Customer;

9.4.1.2 the documentation in support of the application is attached to and submitted with

the application form; and

9.4.1.3 the application form and supporting documentation are submitted to the

applicable office of the Licensee designated by the Licensee for the processing of

such applications and

9.4.1.4 the application form and supporting documents in respect of all or any grounds

upon which an adjustment to the Customer's Annual Baseline Consumption is

requested (as set out in clause 9.3.2.1, 9.3.2.2, and 9.3.2.3) are submitted

together no less than 3 (three) months from the date of the notice of the Licensee

advising the Customer of his Annual Baseline Consumption in terms of rule 8.1.

9.4.2 The Licensee must acknowledge receipt of the Customer’s application, in writing,

within 5 (five) business days of the date on which the application is received by the


35

Licensee.

9.4.3 Should the Licensee require any additional information from a Customer in respect

of an application, the Licensee shall request such additional information in writing

from the Customer within 20 (twenty) business days of the date on which the

application is received by the Licensee.

9.4.4 The Customer shall on receipt of a request for additional information from the

Licensee in terms of rule 9.4.3 furnish all such additional information to the Licensee

within 30 (thirty) business days of the date of such notice from the Licensee failing

which the Customer's application shall lapse and the Customer shall be required to

submit a new application to the Licensee should he wish to adjust his Annual

Baseline Consumption.

9.4.5 If a Customer's application for an adjustment to his Annual Baseline Consumption is

based, in whole or in part, on one or more of the grounds listed in rules 9.3.2.2 or

9.3.2.3, then the Licensee may in its discretion refer such portions of the application

to the National Advisory Committee for an Advisory Opinion within 20 (twenty)

business days of receipt of the application.

9.4.6 The Licensee may, in its sole discretion take into consideration or disregard any

Advisory Opinion received from the National Advisory Committee in making a

decision to adjust or not to adjust a Customer's Annual Baseline Consumption.

9.4.7 Subject to rule 9.4.8, the Licensee shall advise the Customer in writing of its decision

to adjust or not to adjust the Annual Baseline Consumption of a Customer in respect

of each of the grounds listed in the Customer's application for an adjustment within

30 (thirty) business days of-

9.4.7.1 the date on which a Customer's application is received by the Licensee in

accordance with rule 9.4.1, or

9.4.7.2 in the event that the Licensee has sought an Advisory Opinion from the National

Advisory Committee, from the date the Advisory Opinion is received.


36

9.4.7.3 in the event that the Licensee requests the Customer to furnish additional

information in terms of rule 9.4.3, from the date upon which all the additional

information is received by the Licensee; or

9.4.7.4 in the event of a new application made in terms of rule 9.4.4, on the date on

which the new application is received by the Licensee in accordance with rule

9.4.1.

9.4.8 Should the Licensee fail to make a decision in respect of a Customer's application

for an adjustment to his Annual Baseline Consumption within 30 (thirty) business

days in terms with rule 9.4.6, the Licensee shall automatically be afforded an

additional period of 20 (twenty) business days to make a determination concerning

an application, provided that the Licensee has advised the Customer in writing of the

extension prior to the expiry of the 30 (thirty) day period. Should a Licensee fail to

make a determination regarding a Customer's application for an adjustment to his

Annual Baseline Consumption within the extended period determined in accordance

with this rule 9.4.8, such failure shall be deemed to be a dispute between the

Licensee and the Customer and the Customer may refer the dispute to the Regulator

for adjudication in terms of section 30 of the Act.

9.4.9 Should the Licensee decide not to adjust a Customer's Annual Baseline

Consumption in accordance with the Customer's application, such refusal shall be

deemed to be a dispute between the Licensee and the Customer and may be

referred by the Customer to the Regulator for a decision in accordance with section

30 of the Act.

9.4.10 The Regulator shall prescribe the processes and procedures to be followed in

submitting a dispute to the Regulator.

9.5 Implementation of determinations in respect of adjustments to Annual Baseline

Consumption

9.5.1 Once a determination has been made in respect of any of the grounds listed in a


37

Customer's application for an adjustment, whether by the Licensee (in terms of rule

9.4.6) or, where applicable, the Regulator (in terms of clause 9.4.9) the Customer's

Annual Baseline Consumption shall be adjusted to the extent permitted in terms of

such determinations and the adjusted Annual Baseline Consumption shall be the

Customer's Confirmed Annual Baseline Consumption.

9.5.2 For the sake of clarify, it is recorded that each of the grounds listed in a Customer's

application for an adjustment to his Annual Baseline Consumption shall be severable

from each of the other grounds listed in the Customer's application. The Licensee

shall therefore adjust the Customer’s Annual Baseline Consumption to determine the

Customer's Confirmed Annual Baseline Consumption in accordance with the

provisions of rule 9.5.3 in respect of each approved ground upon which an

application is based notwithstanding the non-approval or dispute in respect of other

grounds.

9.5.3 Where an application, or one of the grounds of an application, for an adjustment to a

Customer's Annual Baseline Consumption is based on, or is, one of the grounds

listed in rule 9.3.2.1, the Consumer's Confirmed Annual Baseline set out in the

Licensee's determination (in terms of rule 9.4.6) or, where applicable, the Regulator's

decision (in terms of rule 9.4.9) shall be effective retrospectively from the day

immediately following the Customer's Measurement Date in the month immediately

following the month in which the Customer's application was submitted to the

Licensee in accordance with rule 9.4.1, irrespective of the date of the determination.

9.5.4 In the event that a Customer's Confirmed Annual Baseline Consumption is applied

retrospectively, in accordance with rule 9.5.3, the Licensee shall recalculate the

Customer's Monthly Energy Allocation, having regard to the Customer's Confirmed

Annual Baseline Consumption (once all of the grounds upon which an application for

an adjustment to a Customer's Annual Baseline Consumption have been finally

adjudicated upon) and shall credit the Customer for any Excess Energy Charges

levied against and paid by the Customer in excess of the Excess Energy Charges

which the Customer would have paid (or would not have been required to pay at all)


38

if the Consumer's Monthly Energy Allocation had initially been calculated in

accordance with the Customer's Confirmed Annual Baseline Consumption.

9.5.5 A Customer's Annual Baseline Consumption, irrespective of whether a Licensee has

communicated it to the Customer in terms of rule 8.1, shall serve as the Customer's

Confirmed Annual Baseline Consumption for the purposes of the ECS until the

Licensee has made a decision regarding an application by a Customer to adjust his

Annual Baseline Consumption or, if applicable, the Regulator has made a decision

regarding a Customer's application for review. The determination made by the

Licensee or, where applicable, the Regulator, shall be the Customer's Confirmed

Annual Baseline Consumption for the purposes of the ECS.

9.5.6 Should a Customer not submit an application to the relevant Licensee in the

prescribed format for an adjustment to his Annual Baseline Consumption in terms of

rule 9 within a period of 3 (three) months from the date of the Licensee's notice

advising the Customer of his Annual Baseline Consumption in terms of rule 8.1, the

Customer's Annual Baseline Consumption shall be deemed to be the Customer's

Confirmed Annual Baseline Consumption for the purposes of the ECS.

9.6 Sector Specific Annual Baseline Consumption Normalisation

9.6.1 Application for Normalisation of Annual Baseline Consumption

9.6.1.1 Customers supplying products or services to a particular sector (whether or not

formally defined by the Minister) may jointly apply to the National ECS Committee

for a Normalisation of Annual Baseline Consumption.

9.6.1.2 The grounds for an application made in terms of rule 9.6.1 shall be –

9.6.1.2.1 the occurrence of commonplace but unplanned events which apply to all

sector participants and which, when they arise, typically reduce the electricity

consumption of a Customer in the sector over a 30 (thirty) day period by an

amount greater than 15% (fifteen percent) when compared to the electricity

consumption of the Customer during a 30 (thirty) day period in which the


39

event(s) did not occur; and

9.6.1.2.2 the occurrence of the events referred to in rule 9.6.1.2.1 during the Baseline

Period.

9.6.1.3 Customers, or organisations representing a sector which submit an application in

terms of rule 9.6.1 must –

9.6.1.3.1 identify Customers in that sector which jointly supply in excess of 95% of the

aggregate sales (by volume or value) of the products or services produced in

the Republic by that sector and that are supplied with electricity by Licensees,

directly or indirectly,

9.6.1.3.2 demonstrate that the application will be brought by no less than 75% (seventy

five percent) of all of the Customers identified in terms of rule 9.6.1.3.1;

9.6.1.3.3 demonstrate that all the Customers identified in terms of rule 9.6.1.3.1 have

agreed to comply with the determination made by the Regulator for the

Normalisation of Annual Baseline Consumption, notwithstanding that certain

of those Customers may not have brought the application as required in

respect of rule 9.6.1.3.2; and

9.6.1.3.4 must provide proof to the satisfaction of the Regulator that at least one

Customer in the applicable sector experienced the occurrence of the event

referred to in rule 9.4.1.2.1 during the Baseline Period and that the impact of

the event on the electricity consumption of each affected Customer met the

requirements of rule 9.4.1.2.1.

9.6.2 Normalisation of Annual Baseline Consumption

9.6.2.1 Should an application be made in accordance with rules 9.6.1, the Regulator shall

decide if the application meets the requirements of rules 9.6.1.2 and 9.6.1.3.

9.6.2.2 Should an application be approved by the Regulator, the Regulator shall issue a

directive to all Licensees directing the Normalisation of Annual Baseline


40

Consumption of the Customers identified in terms of rule 9.6.1.3.1 such that the

Annual Baseline Consumption of the Customers shall be adjusted as if none of

the events as specified in the application occurred during the Baseline Period.

9.6.2.3 Customers who have received a Normalisation of Annual Baseline Consumption

shall not be entitled to trade RTC Units during any Billing Period in which an

event as specified in the application approved by the Regulator, occurs.

9.6.2.4 The Normalisation of Annual Baseline Consumption shall not preclude a

Customer from applying for an adjustment to his Annual Baseline Consumption in

accordance with rule 9; provided that such adjustment may not be based on the

occurrence of the events as specified in the application approved by the

Regulator.

9.7 Adjustment where Licensee considers the Annual Baseline Consumption excessive

9.7.1 Should a Licensee, in determining a Customer's Annual Baseline Consumption in

terms of rule 8.1 (in accordance with the data available to the Licensee), consider

the Annual Baseline Consumption of a Customer to be excessive in relation to the

Customer's current electricity consumption for any reason whatever, then the

Licensee shall be entitled to-

9.7.1.1 request the Customer to furnish the Licensee with any information which the

Licensee may reasonably require to prove or disprove its findings that the

Customer's electricity consumption during the Baseline Period was abnormally

high and the Customer shall be obliged to furnish the Licensee with all such

information;

9.7.1.1 advise the Customer of its findings and furnish the Customer with any evidence

which the Licensee may have in support of its findings that the Consumer's

Annual Baseline Consumption is abnormally high; and

9.7.1.2 notwithstanding the Customer's actually electricity consumption during the

Baseline Period, determine that the in terms of rule 8.1.


41

9.7.2 Such an amendment to the Consumer's Annual Baseline Consumption by the

Licensee shall not preclude a Consumer from applying for an adjustment to its

Annual Baseline Consumption in terms of rule 9.1.

9.8 Changes to Annual Baseline Consumption motivated by a Third Party

9.8.1 Should a third party believe that a particular Customer's Confirmed Annual Baseline

Consumption is too high for any reason whatsoever, the third party may bring its

concerns to the attention of the Licensee who decided the Customer's Confirmed

Annual Baseline Consumption.

9.8.2 The Licensee shall advise the Customer to whom the complaint refers and, to the

extent applicable, the Licensee in whose licence area the third party is situated of

the third party's concerns and refer the matter to the Regulator for resolution in terms

of section 30 of the Act.

10 DETERMINATION OF ANNUAL ENERGY ALLOCATION OF BASELINE PERIOD LOADS

10.1 The Customer's Confirmed Annual Baseline Consumption shall be deemed to be the

Confirmed Annual Baseline Consumption of the Baseline Period Loads.

10.2 The Annual Energy Allocation of the Baseline Period Loads shall be calculated by

multiplying Confirmed Annual Baseline Consumption of the Baseline Period Loads by

the Allocation Percentage.


42

CHAPTER 5 – POST BASELINE EEC LOADS

11 DETERMINATION OF CONFIRMED ANNUAL EEC CONSUMPTION

11.1 Customers utilising Post Baseline EEC Loads must, for the purposes of the ECS-

11.1.1 furnish the Licensee with an Energy Efficiency Certificate; and

11.1.2 if the Customer applied to the Licensee to be supplied with less than 20 MVA in

terms of the EGM Rules, submit an electricity consumption forecast to the Licensee,

specifying the Customer's forecasted electricity consumption for each Billing Period

during the first ECS Year commencing on the Effective Date and an annual

maximum demand forecast for a period of 7 (seven ) years commencing on the

Effective Date, in respect of the Post Baseline EEC Loads; or

11.1.3 if the Customer applied to the Licensee to be supplied with 20 MVA or more in terms

of the EGM Rules, submit an electricity consumption forecast to the Licensee,


for a period of 7 (seven) years commencing on the Effective Date, in respect of the

Post Baseline EEC Loads;,

11.1.4 The Licensee may require the Customer to submit a revised forecast, should the

forecasted energy consumption submitted by the Customer in terms of rule 11.1.2, in

the Licensee's sole direction, not be reasonably achievable within the constraints of

the Load allocated to the Customer in terms of the EGM Rules.

11.2 Should a Customer fail to comply with the provisions of rule 11.1 prior to the Effective

Date, the Post Baseline EEC Loads of a Customer may be regarded by the Licensee as

Post Baseline Non-EEC Loads for the purposes of determining the Annual Energy

Allocation applicable to such Loads and the Total Annual Energy Allocation of the

Customer.

11.3 Until the Final Consumption Level of the Post Baseline EEC Loads has been reached,

the Customer shall be required to provide the Licensee with an updated forecast -


43

11.3.1 every six months; and

11.3.2 within 20 (twenty) business days of becoming aware that the forecasted

consumption level over any 3 (three) month period should be adjusted by more than

5% (five percent) from the consumption levels originally forecast.

11.4 The Licensee may require the Customer to submit a revised forecast should -

11.4.1 the adjusted forecast submitted by the Customer in terms of rule 11.3 not be

reasonably achievable within the constraints of the Load allocated to the Customer

in terms of the EGM Rules, in the Licensee's sole discretion; or

11.4.2 the forecasted Final Consumption Level reflected in the adjusted forecast submitted

by the Customer in terms of rule 11.3 be higher than originally forecast.

11.5 The Confirmed Annual EEC Consumption of the Post Baseline EEC Loads will initially

be determined in terms of rules 11.6 having regard to the forecasts provided by the

Customer in terms of rule 11.1.2 or, if applicable, rule 11.1.4 and rule 11.3 or, if

applicable, rule 11.4 ("Preliminary Phase") and shall thereafter be determined in

accordance with rule 11.7.

11.6 Determination of Confirmed Annual EEC Consumption in the Preliminary Phase

With effect from the Effective Date, the forecasts submitted by the Customer to the

Licensee in accordance with 11.1.2 or, if applicable, rule 11.1.4 and rule 11.3 or, if

applicable, rule 11.4 shall be deemed to be the Customer's Confirmed Annual EEC

Consumption for the purposes of calculating the Customer's Total Annual Energy

Allocation.

11.7 Determination of Confirmed Annual EEC Consumption after the Preliminary Phase

11.7.1 A Customer's Final Consumption Level, once reached, expressed as average

kWh/day shall be used to determine the Confirmed Annual ECC Consumption of the


44

Post Baseline EEC Loads by multiplying it by 365 (three hundred and sixty five).

11.7.2 The Final Consumption Level shall be considered to have been reached when a

Stable Consumption Level has been reached and the Stable Consumption Level is

between 98% (ninety eight percent) and 100% (one hundred percent) of the

forecasted Final Consumption Level.

11.7.3 The Customer's actual Final Consumption Level may not exceed the Final

Consumption Level originally forecast by the Customer. Should the Stable

Consumption Level reached in respect of a Post Baseline EEC Load exceed the

Customer's forecasted Final Consumption Level in respect of that Load, the Stable

Consumption Level will be deemed to be the Final Consumption Level of that Post

Baseline EEC Load.

11.7.4 A Stable Consumption Level shall be considered to have been reached when, for a

period of 3 (three) consecutive Billing Periods (measured separately and expressed

as kW/day) the average daily consumption levels are all within 5 (five) percent of the

average consumption level measured over the full 3 (three) Billing Periods.

11.7.5 If a Stable Consumption Level at a consumption level less than 98% of the forecast

Final Consumption Level has been reached, the Licensee shall advise the Customer

accordingly.

11.7.6 Should a Customer, upon receipt of a notice in terms of rule 11.7.5 wish to continue

Ramping-Up the Load beyond the Stable Consumption Level reached, up to the

Final Consumption Level originally forecast, the Customer shall be required to make

a fully motivated application to the Licensee within 15 (fifteen) working days of the

date of the notice for permission to do so.

11.7.7 Notwithstanding rule 11.7.1, if the Customer fails to submit an application to the

Licensee in terms of rule 11.7.6 within the stipulated period, or if the Licensee, in its

sold discretion refuses to grant the application, the Stable Consumption Level

reached shall be deemed to be the Final Consumption Level in respect of the

relevant Load, which shall be used to determine the applicable Annual Energy


45

Allocation, and no further Ramp-up shall be permitted in connection with that Load.

12 DETERMINATION OF ANNUAL ENERGY ALLOCATION OF POST BASELINE EEC LOADS

12.1 The Annual Energy Allocation of Post Baseline EEC Loads shall be determined by

multiplying the Confirmed Annual EEC Consumption of the Post Baseline EEC Loads

(determine in accordance with rule 0 or 11.7.1) by the Allocation Percentage applicable

to Post Baseline EEC Loads.

12.2 The Allocation Percentage applicable to Post Baseline EEC Loads shall be 100% (one

hundred percent).


46

CHAPTER 6 - POST-BASELINE NON-EEC LOADS

13 DETERMINATION OF POST-BASELINE NON-EEC LOAD CONSUMPTION

13.1 Customers utilising Post Baseline Non-EEC Loads must, for the purposes of the ECS –

13.1.1 if the Customer applied to the Licensee to be supplied with less than 20 MVA in

terms of the EGM Rules, submit an electricity consumption forecast to the Licensee,


during the first ECS Year commencing on the Effective Date and an annual

maximum demand forecast for a period of 7 (seven ) years commencing on the

Effective Date, in respect of the Post Baseline Non-EEC Loads; or

13.1.2 if the Customer applied to the Licensee to be supplied with 20 MVA or more in terms

of the EGM Rules, submit an electricity consumption forecast to the Licensee,


for a period of 7 (seven) years commencing on the Effective Date, in respect of the

Post Baseline Non-EEC Loads.

13.2 The Licensee may require the Customer to submit a revised forecast, should the

forecasted energy consumption submitted to the Customer in terms of rule 13.1, in the

Licensee's sole direction, not be reasonably achievable within the constraints of the

Load allocated to the Customer in terms of the EGM Rules.

13.3 Until the Final Consumption Level of the Post Baseline Non-EEC Loads has been

reached, the Customer shall be required to provide the Licensee with an updated

forecast -

13.3.1 every six months; and

13.3.2 within 20 (twenty) business days of becoming aware that the forecasted

consumption level over any 3 (three) month period should be adjusted by more than

5% (five percent) from the consumption levels originally forecast.


47

13.4 The Licensee may require the Customer to submit a revised forecast should –

13.4.1 the adjusted forecast submitted by the Customer in terms of rule 13.3 not be

reasonably achievable within the constraints of the Load allocated to the Customer

in terms of the EGM Rules, in the Licensees sole discretion; or

13.4.2 the forecasted Final Consumption Level reflected in the adjusted forecast submitted

by the Customer in terms of rule 13.3 be higher than originally forecast.

13.5 The Confirmed Annual Non-EEC Consumption of the Post Baseline Non-EEC Loads

will initially be determined in terms of rule 13.6 having regard to the forecasts provided

by the Customer in terms of rule 13.1 or, if applicable, rule 13.2 and rule 13.3 or, if

applicable rule 13.4 ("Preliminary Phase") and shall thereafter be determined in

accordance with rule 13.7.

13.6 Determination of Confirmed Annual Non-EEC Consumption in the Preliminary Phase

With effect from the Effective Date, the forecasts submitted by the Customer to the

Licensee in accordance with rule 13.1 or, if applicable, rule 13.2 and rule 13.3 or, if

applicable rule 13.4 shall be deemed to be the Customer's Confirmed Annual Non-EEC

Consumption for the purposes of calculating the Customer's Total Annual Energy

Allocation.

13.7 Determination of Confirmed Annual Non-EEC Consumption after the Preliminary Phase

13.7.1 A Customer's Final Consumption Level, once reached, expressed as average

kWh/day shall be used to determine the Confirmed Annual ECC Consumption of the

Post Baseline Non-EEC Loads by multiplying it by 365 (three hundred and sixty-five).

13.7.2 The Final Consumption Level shall be considered to have been reached when a

Stable Consumption Level has been reached and the Stable Consumption Level is

between 98% (ninety-eight percent) and 100% (one hundred percent) of the

forecasted Final Consumption Level.

13.7.3 A Stable Consumption Level shall be considered to have been reached when, for a


48

period of 3 (three) consecutive Billing Periods (measured separately and expressed

as kW/day) the average daily consumption levels are all within 5 (five) percent of the

average consumption level measured over the full 3 (three) Billing Periods.

13.7.4 The Customer's actual Final Consumption Level may not exceed the Final

Consumption Level originally forecast by the Customer.

13.7.5 In the case of continuous Ramp-ups (as determined in accordance with rule 13.7.7),

if a Stable Consumption Level at a consumption level less than 98% of the forecast

Final Consumption Level has been reached, the Licensee shall advise the Customer

accordingly.

13.7.6 In the case of non-continuous Ramp-ups (as determined in terms of rule13.7.8) if a

Stable Consumption Level at a consumption level less than 98% of the forecast Final

Consumption Level has been maintained for 3 (three) months longer than originally

forecast, the Licensee shall advise the Customer accordingly.

13.7.7 The Ramp-up to Final Consumption Level shall be considered continuous unless -

13.7.7.1 the forecast provided in terms of rules 13.1 indicates that a Stable Consumption

Level will be reached at least once before the Final Consumption Level has been

reached; or

13.7.7.2 the Customer advises the Licensee that a Stable Consumption Level has been

reached; or

13.7.7.3 actual measured consumption relating to a Post Baseline Non-EEC Load reaches

a Stable Consumption Level, whether so forecast or not.

13.7.8 The Ramp-up to Final Consumption Level shall be considered non-continuous if-

13.7.8.1 the forecast provided in terms of rules 15.2 indicates that a Stable Consumption

Level will be reached at least once before the Final Consumption Level has been

reached; or


49

13.7.8.2 the Customer advises the Licensee that a Stable Consumption Level has been

reached; or

13.7.8.3 actual measured consumption relating to a Post Baseline Non-EEC Load reaches

a Stable Consumption Level, whether so forecast or not.

13.7.9 Should a Customer, upon receipt of a notice in terms of rule 13.7.5 or rule 13.7.6,

wish to continue ramping-up the Load beyond the Stable Consumption Level

reached, up to the Final Consumption Level originally forecast, the Customer shall

make a fully motivated application to the Licensee within 15 (fifteen) business days

of the date of the notice for permission to do so.

13.7.10 Notwithstanding rule 13.7.1, if the Customer fails to submit an application to the

Licensee in terms of rule 13.7.9 within the stipulated period, or if the Licensee, in its

sole discretion refuses to grant the application, the Stable Consumption Level

reached shall be deemed to be the Final Consumption Level in respect of the

relevant Load, which shall be used to determine the applicable Annual Energy

Allocation, and no further Ramp-up shall be permitted in connection with that Load.

13.8 Sector Specific Annual Baseline Consumption Normalisation

13.8.1 Application for Normalisation of Annual Baseline Consumption

13.8.1.1 Customers supplying products or services to a particular sector (whether or not

formally defined by the Minister) may jointly apply to the National ECS Committee

for a Normalisation of Annual Baseline Consumption.

13.8.1.2 The grounds for an application made in terms of rule 13.8.1 shall be –

13.8.1.2.1 the occurrence of commonplace but unplanned events which apply to all

sector participants and which, when they arise, typically reduce the electricity

consumption of a Customer in the sector over a 30 (thirty) day period by an

amount greater than 15% (fifteen percent) when compared to the electricity

consumption of the Customer over a 30 (thirty) day period in which the


50

event(s) did not occur; and

13.8.1.2.2 the occurrence of the events referred to in rule 9.6.1.2.1 during the Baseline

Period.

13.8.1.3 Customers, or organisations representing a sector which submit an application in

terms of rule 13.8.1 must –

13.8.1.3.1 identify Customers in that sector which jointly supply in excess of 95% of the

aggregate sales (by volume or value) of the products or services produced in

the Republic by that sector and that are supplied with electricity by Licensees,

directly or indirectly,

13.8.1.3.2 demonstrate that the application will be brought by no less than 75% (seventy

five percent) of all of the Customers identified in terms of rule 9.6.1.3.1;

13.8.1.3.3 demonstrate that all the Customers identified in terms of rule 9.6.1.3.1 have

agreed to comply with the determination made by the Regulator for the

Normalisation of Annual Baseline Consumption, notwithstanding that certain

Customers may not have supported the application as required in respect of

rule 9.6.1.3.2; and

13.8.1.3.4 must provide proof to the satisfaction of the Regulator that at least one

Customer in the applicable sector experience the occurrence of the event

referred to in rule 9.4.1.2.1 did occur during the Baseline Period and that the

impact of the event on the electricity consumption of each affected Customer

meet the requirements of rule 9.4.1.2.1.

13.8.2 Normalisation of Annual Baseline Consumption

13.8.2.1 Should an application be made in accordance with rules 9.6.1 the Regulator shall

decide if the application meets the requirements of rules 13.8.1.2and 13.8.1.3.

13.8.2.2 Should an application be approved by the Regulator, the Regulator shall issue a

directive to all Licensees directing the Normalisation of Annual Baseline


51

Consumption of the Customers identified in terms of rule 9.6.1.3.1 such that the

Annual Baseline Consumption of the Customers shall be adjusted as if none of

the events as specified in the application occurred during the Baseline Period.

13.8.2.3 Customers who have received a Normalisation of Annual Baseline Consumption

shall not be entitled to trade RTC Units during any Billing Period in which an

event as specified in the application approved by the Regulator, occurs.

13.8.2.4 The Normalisation of Annual Baseline Consumption shall not preclude a

Customer from applying for an adjustment to his Annual Baseline Consumption in

accordance with rule 9; provided that such adjustment may not be based on the

occurrence of the events as specified in the application approved by the

Regulator.

14 DETERMINATION OF ANNUAL ENERGY ALLOCATION OF POST BASELINE NON-EEC

LOADS

14.1 The Annual Energy Allocation of Post Baseline Non-EEC Loads shall be determined by

multiplying the Confirmed Annual Non-EEC Consumption of the Post Baseline Non-EEC

Loads (determine in accordance with rule 13) by the Allocation Percentage applicable to

Post Baseline Non-EEC Loads.

14.2 The Allocation Percentage applicable to Post Baseline Non-EEC Loads shall be

determined in terms of rule 6.


52

CHAPTER 7 - TOTAL ANNUAL ENERGY ALLOCATION

15 DETERMINATION OF TOTAL ANNUAL ENERGY ALLOCATION

The Total Annual Energy Allocation applicable to a Customer is the sum of the Annual Energy

Allocations of each Defined Loads applicable to a Customer, calculated in terms of rules 10, 12

and 14.


53

CHAPTER 8 - MONTHLY ENERGY ALLOCATIONS

16 DETERMINATION OF MONTHLY ENERGY ALLOCATIONS

16.1 Until a Customer's Total Annual Energy Allocation has been determined –

16.1.1 the Customer's Annual Baseline Consumption, which the Customer is notified of by

the Licensee in terms of rule 7.2, divided by 12 (twelve); plus

16.1.2 the forecasts or, if applicable, adjusted forecasts provided by a Customer in respect

of Post Baseline EEC Loads in terms of rule 11.1.2 or, if applicable, rule 11.1.4 and

rule 11.3 or, if applicable, rule 11.4 in respect of a Billing Period; plus

16.1.3 the forecasts of, if applicable, adjusted forecasts provided by a Customer in respect

of Post Baseline Non-EEC Loads in terms of rule 13.1 or, if applicable, rule 13.2 and

rule 13.3 or, if applicable rule 13.4 in respect of a Billing Period

shall be regarded as the Customer's Monthly Energy Allocation for the purposes of the

Rules.

16.2 Once a Customer's Total Annual Energy Allocation has been determined, in

accordance with rule 15 the Customer shall be entitled to stipulate a Monthly Energy

Allocation for each of the Billing Periods in the ECS Year, provided that –

16.2.1 the sum of the 12 (twelve) Monthly Energy Allocations stipulated by the Customer in

respect of an ECS Year is equal to the Customer's Annual Energy Allocation for the

ECS Year;

16.2.2 unless specifically motivated and approved by the Licensee, the stipulated Monthly

Energy Allocation for each Billing Period of the ECS Year, stated in kWh per day, is

within 25% (twenty five percent) of the Customer's annual average kWh per day; and

16.2.3 for Customers to whom the ECS only becomes applicable during an ECS Year, the

provisions of rule 16.7 shall apply.


54

16.3 The stipulation made by a Customer in respect of its Monthly Energy Allocations, in

terms of rule 16.1, shall be submitted by the Customer to the Licensee in writing -

16.3.1 for the Monthly Energy Allocations applicable to the first ECS Year of the Customer's

participation in the ECS, within 10 (ten) business days of receipt of the notice from

the Licensee advising the Customer of his Annual Energy Allocation; and

16.3.2 for each subsequent ECS Years, by 30 April each year for the following ECS year.

16.4 Should a Customer fail to request particular Monthly Energy Allocations within the time

period set out in rule 16.3.1 or 16.3.2 as the case may be, the Customer's Annual

Energy Allocation shall be divided into the Monthly Energy Allocations in proportion to

the Customer's average Consumption Profile for each corresponding Billing Period, or

where the Customer does not have a Consumption Profile, the Customer's Monthly

Energy Allocations shall be determined by the Licensee.

16.5 The Licensee shall confirm the Customer's Monthly Energy Allocations in writing,

whether as stipulated by the Customer, in line with the Customer's Consumption Profile

or as specified by the Licensee within 20 (twenty) business days of notifying the

Customer of his Annual Energy Allocation or within 20 (twenty) business days of 30

April as the case may be.

16.6 Licensees must within a reasonable time of approving a Customer's Initial Monthly

Energy Allocation provide the details thereof to Eskom to assist it with energy planning.

16.7 Should the ECS only becomes applicable to a Customer during an ECS Year (as

opposed to the beginning of an ECS Year) –

16.7.1 the Customer must stipulate his Monthly Energy Allocation for each of the Billing

Periods during the full ECS Year in question even if certain of the Billing Periods

have past (being before the Effective date);

16.7.2 if the average daily electricity consumption for the remaining period of the relevant

ECS Year after the Effective Date (as determined having regard to the Monthly


55

Energy Allocations determined by the Customer in accordance with rule 16.7.1) is

less than or equal to the Annual Energy Allocation expressed as average kWh per

day, no further submission shall be required by the Customer;

16.7.3 if the average daily electricity consumption for the remaining period of the relevant

ECS Year after the Effective Date (as determined having regard to the Monthly

Energy Allocations determined by the Customer in accordance with rule 16.7.1) is

greater than the Annual Energy Allocation expressed as average kWh per day, the

Customer shall be required to submit a declaration signed by the Customer, if the

Customer is a natural person, or the Customer's Chief Executive Officer or other

properly delegated official, if the Customer is a juristic person, that provides a full

motivation for the Monthly Energy Allocations setting out –

16.7.3.1 the Customer's Consumption Profile or, if the Customer was not a Customer for

this entire period over which his consumption Profile is measured, that part of the

Consumption Profile that is available from the date on which the Licensee

supplied electricity to the relevant Customer account;

16.7.3.2 the specific circumstances of the Customer in support of the Monthly Energy

Allocations proposed by the Customer;

16.7.4 The Licensee may, from time to time, verify the information outlined in the

declaration submitted in terms of rule 16.7.3 and, should the Licensee find that the

information set out in the declaration submitted in terms of rule 19.6.3 is incorrect or

that any information provided by the Customer does not support the stipulated

Monthly Energy Allocation, the Licensee may –

16.7.4.1 retrospectively if necessary from the Effective Date, adjust the Customer's

Monthly Energy Allocations for the remaining period of the ECS Year calculated

from the Effective Date so that the average kWh for each Billing Period in this

period is equal to the Annual Energy Allocation expressed as average kWh per

day;

16.7.4.2 retrospectively if necessary from the Effective Date, charge the Customer Excess


56

Energy Charges due as a result of the adjustment made in terms of rule 16.7.4.1

above; and / or

16.7.4.3 claim any other remedy available to it in law against the Customer and/or the

signatory to the declaration submitted in terms of rule 16.7.3.

16.8 Adjustment of Monthly Energy Allocations

16.8.1 Customers shall, subject to rules 16.8.2 and, 16.8.3 at any time during an ECS year

be entitled to adjust their Monthly Energy Allocations for the remainder of that ECS

year provided that the adjustment is made no less than 5 (five) days prior the

commencement of the first Billing Period to which the adjusted Monthly Energy

Allocation shall apply.

16.8.2 Customers will be entitled to no more than 4 (four) adjustments in any full ECS year

to all or any of their Monthly Energy Allocations in that ECS Year which number shall

be adjusted pro rata should the ECS only be applicable to a Customer for a portion

of an ECS Year.

16.8.3 Unless motivated by a Customer and approved by the Licensee -

16.8.3.1 a Customer may not, with a single adjustment in terms of rule 16.8.2 adjust the

Monthly Energy Allocations for any one Billing Period either upwards or

downwards by more than 10% (ten percent); and

16.8.3.2 the aggregate adjustment, either upwards or downwards, to any Monthly Energy

Allocation for the duration of the ECS shall not exceed 20% (twenty percent) of

the Monthly Energy Allocation originally stipulated by the Customer in terms of

rule 16.1.

16.8.4 Licensees shall be required to determine whether to approve Customer applications

in terms of rules 16.8.3 in the context of the obligation on Customers specified in rule

16.8.4.

16.9 National Load Profile


57

16.9.1 A Customer is obliged, in terms of the ECS, to reduce his electricity consumption

throughout each day, week, month and year in proportion to his Historical

Consumption Profile to the extent possible.

16.9.2 The Licensee shall make every effort to monitor a Customer consumption profile to

assess the Customer's compliance to rule 16.9.1, within the constraints imposed by

current consumption measurement practices and shall –

16.9.2.1 advise the Customer of any non-compliance with rule 16.9.1; and

16.9.2.2 enter into discussions with Customers with a view to improving the Customer's

level of compliance.

16.9.3 Should a Customer believe that the only means of achieving his Monthly Energy

Allocation is to substantially change his consumption profile during any Billing

Period, he may voluntarily form Load Rotation Groupings with other similarly-affected

Customers in the same licensed area and advise the Licensee thereof.

16.9.4 The Licensee shall make every effort to monitor the group profile of the groupings

established in terms of rule 16.9.3, provided that the Licensee or any party to a load-

rotation agreement may cancel the agreement if it does not achieve the desired

outcome.

16.9.5 The Licensee shall also consider any other arrangement proposed by a Customer to

facilitate a Customer's compliance with rule 16.9.1.

16.9.6 If a Customer fails to reduce his electricity consumption in proportion to his Historical

Consumption Profile as the case may be, the Licensee may impose such additional

restrictions and/or sanctions on the Customer as may be prescribed by the Regulator

from time to time.


58

CHAPTER 9 – EXCESS ENERGY CHARGES

17 EXCESS ENERGY CHARGES

17.1 The Regulator has, in terms of section 15(3) of the Act, approved a deviation from the

set or approved Tariffs in terms of the regulations promulgated by the Minister.

17.2 Customers shall be charged Excess Energy Charges for consumption in excess of their

Final Monthly Energy Allocation in any Billing Period.

17.3 The consumption by a Customer of electricity in excess of their Final Monthly Energy

Allocation in any Billing Period shall be regarded as a "Transgression".

17.4 The Excess Energy Charges levied in terms of rule 17.2 shall be based on the

Transgression Level.

17.5 A Transgression by a Customer shall be classified as falling within one of the following

"Transgression Levels" -

17.5.1 the "Control Band", where a Customer's electricity consumption exceeds the

Customer's Final Monthly Energy Allocation up to a maximum of -

17.5.1.1 1% (one percent) of a Customer's Final Monthly Energy Allocation for Customers

with Notified Maximum Demand and/or Utilised Capacity of greater than 1 MVA;

and

17.5.1.2 2,5% (two and a half percent) of a Customer's Final Monthly Energy Allocation for

Customers with Notified Maximum Demand and/or Utilised Capacity of less than

or equal to 1 MVA;

17.5.2 the "Disincentive Band", where a Customer's electricity consumption exceeds the

Control Band applicable to the Customer up to a maximum of 10% (ten percent) of

Customer's Final Monthly Energy Allocation; and

17.5.3 the "Punitive Band", where the Customer's electricity consumption exceeds the


59

Disincentive Band applicable to the Customer;

17.6 Licensees shall charge Customers the following Excess Energy Charges –

17.6.1 R2,80 (two rand and eighty cents) per kWh for electricity supplied by the Licensee to

a Customer in the Control Band;

17.6.2 R4,50 (four rand and fifty cents) per kWh for electricity supplied by the Licensee to a

Customer in the Disincentive Band; and

17.6.3 R9,00 (nine rand) per kWh for electricity supplied by the Licensee to a Customer in

the Punitive Band.

17.7 The Excess Energy Charges shall be levied in addition to any energy charges that

would be applicable under existing tariffs.

17.8 Notwithstanding rule 17.7, Customers –

17.8.1 shall remain liable for all charges levied by a Licensee which are not directly related

to the Customer's electricity consumption including but not limited to service

charges, administration charges, rental, connection fees, maximum demand

charges, transmission surcharges, voltage surcharges and reactive energy charges;

and

17.8.2 will be entitled to claim the same discounts as they would have been entitled to

should the ECS not have been implemented, including but not limited to voltage

discounts.

17.9 Notwithstanding rule 17.6, Licensees will only be entitled to revenue based on the

applicable standard tariff for all energy consumed by a Customer and any other charges

payable by a Customer in accordance with rule 17.8. The additional monies collected in

respect of energy consumed in excess of a Customer’s Final Monthly Energy Allocation

shall be administered separately by or on behalf of the Regulator and shall be transferred

or disbursed by the Regulator from time to time.


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CHAPTER 10 – USE OF SUPPLEMENTARY GENERATION

18 USE OF SUPPLEMENTARY GENERATION

18.1 The Regulator shall from time to time publish criteria which must be met by Customers in

order to register its Post-Baseline Supplementary Generation, which registration is

required in order for the Customer to make use the Rules to achieve all or a part of the

savings required in terms of the ECS.

18.2 Should a Customer meet all of the criteria specified by the Regulator in terms of rule 18.1,

the Customer shall be required to submit the following information to the Regulator in

order to be registered by the Regulator to use Post-Baseline Supplementary Generation -

18.2.1 the Customer's information including the Customer's full name, registration number

(if a juristic person), identity number (if a natural person), the name applicable

Licensee and Customer's account number with the Licensee;

18.2.2 the details of the Customer's own or purchased Supplementary Generation including

the nature of the Supplementary Generation (e.g. co-generation, gas-fired, coal-

fired);

18.2.3 the capacity of the generator units, if the Supplementary Generation is generated by

the Customer;

18.2.4 the extent, if any to which the Supplementary Generation is supplied to the

Customer through the network(s) of one or more Licensee;

18.2.5 the estimated amount of Energy which the Customer will generate and/or purchase

per annum, expressed in kWh and as a percentage of the Customer's forecasted

annual consumption; and

18.2.6 such other information as the Regulator may specify from time to time.

18.3 In addition, Customers that wish to register to use Post-Baseline Supplementary

Generation to achieve all or a part of the savings required in terms of the ECS must obtain


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the written approval of the Licensee of the factors, including network risk where applicable,

considered by the Customer in estimating the amount of Supplementary Energy to be

generated per annum in terms of rule 18.2.5

18.4 Where Baseline Supplementary Generation was in use, the Customer may, if applicable,

apply for an adjustment to his Annual Baseline Consumption in terms of the rule 9.and the

Customer shall make available to the Licensee any historical records requested by the

Licensee to assess that the Customer's Annual Baseline Consumption fairly reflects the

average historical performance of the Supplementary Generation.

18.5 Supplementary Generation Customers may purchase Type-A RTC Units form the System

Operator to offset any loss of Supplementary Energy provided that -

18.5.1 these will be used to address month-to-month variations in the performance of

Supplementary Generation not defined as Abnormal Events;

18.5.2 the Customer must, at the time of every purchase, submit a written declaration to the

System Operator that the Type-A Units being purchased are for the purposes

specified in rule 18.5.1

18.5.3 the total number of Type-A Units purchased by a Customer –

18.5.3.1 in any single Billing Period shall not exceed 2% (two percent) of the estimated

amount of Energy which the Customer will generate and/or purchase per Billing

Period (derived from the estimated amount which it will generate and/or purchase

per annum); and

18.5.3.2 in an ECS Year, net of sales as defined in rule 18.5.4, shall not exceed 6% (six

percent) of the estimated amount of Energy which the Customer will generate

and/or purchase per Billing Period (derived from the estimated amount which it

will generate and/or purchase per annum) ;

18.5.4 these units must be sold back to the System Operator in the first Billing Period,

immediately following the Billing Period in which the Type-A RTC Units were


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purchased, in which Supplementary Generation is available to exceed the

Customer's Energy requirements; and

18.5.5 If all Type-A RTC Units purchased have not been sold back to the System Operator

or offset by purchases of RTC Units from a third party by the end of any ECS Year,

the Customer’s Monthly Energy Allocation for the final Billing Period in that ECS

Year will be reduced by an amount equivalent to the number of Type-A RTC Units

still outstanding at that date.

18.6 Supplementary Generation Customers may purchase Type-B RTC Units to offset the loss

of Supplementary Energy provided that -

18.6.1 these will only be used to address loss of Supplementary Energy that results from an

Abnormal Event; and

18.6.2 purchases of Type-B RTC Units will only be permitted upon declaration by the

Customer of an Abnormal Event.

18.7 All Abnormal Events must be reported to the System Operator within 1 (one) business

days of the occurrence of the Abnormal Event.

18.8 The Licensee shall monitor and analyse the number, severity and duration of Abnormal

Events per Customer and if the Licensee is of the view that any Customer’s

Supplementary Generation performance is not acceptable, the Licensee shall

simultaneously inform both the Customer concerned and the Regulator of this opinion,

providing evidence for the opinion including a summary of all purchases of Type-A and

Type-B Units as well as sales of Type-A Units.

18.9 The Regulator shall study the evidence submitted by any Licensee in terms of rule 18.8

and may, in its sole discretion, issue a warning to the Customer that his right to purchase

Type-A and/or Type B-RTC Units may be curtailed or cancelled if certain conditions

detailed by the Regulator in the warning are not met.

18.10 Should the Customer fail to adhere to the Regulator's warning or comply with the


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conditions set out therein, the Regulator may in its sole discretion limit or cancel the

Customer's right to purchase Type-A and/or Type B RTC Units on 45 (forty five) days

written notice to the Customer and advise the Licensee accordingly.

18.11 Within 30 (thirty) days of the end of each ECS Year, each Licensee that has registered

Customers using Supplementary Generation shall issue a report to the Regulator detailing

the number, severity and duration of Abnormal Events per Customer and a summary, per

Customer, of all purchases of Type-A and Type-B Units as well as sales of Type-A Units.

18.12 The Regulator shall study the reports from Licensees and, after consultation with the

System Operator, may adjust the purchase price of Type-B RTC Units after following due

process.


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CHAPTER 11 – RTC TRADING RESTRICTIONS

19 RTC TRADING RESTRICTIONS

19.1 The following RTC Trading restrictions shall apply in relation to Annual Energy

Allocations determined in terms of rule 10, 12 and 14 –

19.1.1 Customers Ramping-Up consumption to Final Consumption Level shall not be

permitted to sell any RTC Units in respect of any Annual Energy Allocation for the

duration of the Ramp-up;

19.1.2 once the Final Consumption Level has been reached and the associated Annual

Energy Allocation determined, Customers may begin to sell or resume selling (as the

case may be) RTC Units; and

19.1.3 the Upper Limit is equal to 110% of the Total Annual Energy Allocation;

19.1.4 the Lower Limit is equal to 90% of the Total Annual Energy Allocation, subject to the

RTC trade restrictions determined in terms of rules 13 and 17.


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ENERGY GROWTH MANAGEMENT RULES

20 PURPOSE OF THE RULES

20.1 The purpose of the EGM Rules is to :

20.1.1 set out set out the circumstances under which access to the supply of

electricity may be allowed, refused, deferred or reduced;

20.1.2 the rights and obligations of existing or new users, Applicants and

Customers.

21 GENERAL RULES

21.1 The Rules shall come into operation on the Commencement Date.

21.2 The Rules shall, notwithstanding the Commencement Date, apply to all Applicants

and/or Customers who were not provided by a Licensee with a written undertaking to

supply before the Commencement Date.

21.3 On the Commencement Date the Rules shall form part of a Licensee’s license.

21.4 Dispute Resolution

21.4.1 In the event of any dispute between a Customer(s) and a Licensee(s) or

between two or more Licensees in respect of or arising out of the Rules, the

dispute shall be dealt with in accordance with section 30 of the Act.

21.5 Guidelines

21.5.1 The Regulator may in accordance with the provisions of section 35 of the Act

issue guidelines by notice in the Gazette from time to time to facilitate the

proper interpretation of the Rules.

22 CAPACITY ALLOCATION COMMITTEE

22.1 The Capacity Allocation Committee is hereby established by the Regulator.


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The Regulator shall determine rules in order to regulate the affairs and decision making

powers of the Capacity Allocation Committee in accordance with section 10 of the National

Energy Regulator Act, 2004.

23 GROWTH MANAGEMENT

23.1 The System Operator will determine whether there is capacity available for electricity

growth.

24 CATEGORISATION OF APPLICATIONS

24.1 All Applicants and/or Customers must apply to the relevant Licensee for a New

Connection or Additional Load in accordance with the procedure detailed by the

Licensee and provide the Licensee with the information specified in the Grid Code,

Distribution Code, by a Licensee and any other code, rule, directive or guideline

issued by the Regulator

24.2 Provided that there is sufficient capacity for electricity growth Applicants that apply to

a Licensee for an Additional Load, or for a New Connection for the supply of electricity

–

24.2.1 of up to and including 100 Kva (“Category 1 Applicants”) may receive such

supply, subject to the submission of the requisite application form and

supporting documentation to the Licensee;

24.2.2 of more than 100 Kva but less than or equal to 1 MVA (“Category 2

Applicants”) may receive supply of electricity subject to the submission of the

requisite application form and supporting documentation to the Licensee, and

provided that the Applicant undertakes in writing to use the electricity

supplied in an energy efficient manner, in accordance with the Energy

Efficiency Specifications as applicable or determined by the Regulator from

time to time;

24.2.3 of more than 1 MVA but less than 20 MVA (“Category 3 Applicants”) may

receive supply of electricity subject to the submission of the requisite

application form and supporting documentation to the Licensee, and provided

that-


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24.2.3.1 where the Applicant or any other entity over which it has Majority Control

over already receives electricity, from anywhere in the Republic or

internationally, from the Interconnected Power System, the Applicant or

any other entity over which it has Majority Control, undertakes not to

exceed the Monthly Energy Allocation in respect of those existing

accounts; and

24.2.3.2 the Applicant agrees to use the electricity supplied pursuant to the

application for electricity in accordance with the energy efficiency criteria

set out in rules 28.1 and 28.2.

24.2.4 of more or equal to 20 MVA (“Category 4 Applicants”) shall, subject to the

submission of the requisite application form and supporting documentation to

the Licensee and complied with the provisions of rules 24.2.3.1 and 7.2.3.2,

have their application referred by the applicable Licensee to the Capacity

Allocation Committee who will determine the Applicants Individual Electricity

Allocation in respect of the Additional Load or New Connection and/or the

time when such Individual Electricity Allocation shall be available.

24.3 Any supply of electricity requested in terms of rule 24.1 shall be made available to the

Applicant :

24.3.1 if the Applicant submit, in the case of Category 2 Applicants, and Category

3,, a monthly energy forecast for a period of 1(one) year and an annual

maximum demand forecast for a period of 7(seven) years, calculated from

the date of the Applicant first receiving supply of electricity;

24.3.2 if the Applicant submit, in the case of Category 4 Applicants, a monthly

energy forecast for a period of 7(seven) years calculated from the date of the

Applicant first receiving supply of electricity;

24.3.3 upon approval, from the date determined by the Licensee or the Capacity

Allocation Committee;

24.3.4 subject to the physical network connection being operational;

24.3.5 if the Applicant pays the Licensee all fees and provide all guarantee’s as set


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out by the Licensee in the quotation for the supply of electricity;

24.3.6 the Licensee and Applicant having signed a supply agreement; and

24.3.7 where the Applicant, in the case of Category 3 Applicants and Category 4

Applicants, or any other entity over which it has Majority Control over already

receives electricity, from anywhere in the Republic or internationally, from the

Interconnected Power System, the Applicant or any other entity over which it

has Majority Control over has achieved savings in electricity consumption to

such an extent that it does not exceed the Monthly Energy Allocation in

respect of those existing accounts.

24.4 Notwithstanding a Customer’s Notified Maximum Demand, a Customer must apply to

a Licensee for an increase in electricity supply in excess of the Customer’s Final

Monthly Energy Allocation.

24.5 Should an Applicant who has applied for a New Connection or an Additional Load

since 1 November 2007 subsequently makes one or more additional applications for

an Additional Load at the same location, the cumulative load in respect of all of the

applications made by the Applicant, shall be taken into account in determining which

category, referred to in rule 24.2 of the Rules, the Applicant shall be classified as for

the purposes of such further applications.

24.6 The Regulator may from time to time review and adjust the thresholds for the

categories set out in rule 24.2.

25 MUNICIPALITIES

25.1 Municipalities shall apply to Eskom for a New Connection or Additional Load and

Eskom will supply additional electricity to municipalities to accommodate their

Category 1 Applicants, Category 2 Applicants and Category 3 Applicants, even if the

collective load requested by the Municipalities for such Applicants exceeds 20 MVA;

provided the municipality has complied with rule 8.1.

25.2 Municipalities shall within 60(sixty) days of the promulgation of these Rules and

annually thereafter supply Eskom with their monthly energy forecast for a period of

7(seven) years calculated from the month following the month during which the


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information is submitted.

25.3 Where an Applicant applies to a Municipality (as a Licensee), for an Additional Load,

or for a New Connection for the supply of electricity, of 20 MVA or more, such

applications shall be referred to the Capacity Allocation Committee for approval.

25.4 Licensees shall be regarded as Applicants in respect of any application for an

Additional Load or for a New Connection for the supply of electricity required for their

own consumption, the provision of Basic Municipal Services or to fulfil their

obligations in terms of the Constitution.

26 INTERNATIONAL UTILITIES

26.1 An International Utility shall apply to Eskom for a New Connection or Additional Load

and Eskom will supply additional electricity to the International Utility to accommodate

their Category 1 Applicants, Category 2 Applicants and Category 3 Applicants, even if

the collective load requested by the International Utility for such Applicants exceeds

20 MVA; provided that the International Utility has complied with rule 8.1.

26.2 Where an International Utility who, receives an application for a New Connection or

Additional Load for the supply of electricity of 20 MVA or more and the International

Utility requests Eskom to provide the supply of electricity for the New Connection or

Additional Load, Eskom shall refer such applications to the Capacity Allocation

Committee for approval; provided that the International Utility has complied with rule

8.1.

26.3 International Utilities shall within 60(sixty) days of the promulgation of these Rules

and annually thereafter supply Eskom with their monthly energy forecast for a period

of 7(seven) years calculated from the month following the month during which the

information is submitted.

27 ALLOCATION CRITERIA FOR CATEGORY 4 APPLICANTS

27.1 The Capacity Allocation Committee will assess applications submitted by Category 4

Applicants and determine the amount of electricity that will be supplied to the

Category 4 Applicant and the date on which it will be supplied.


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27.2 If the Capacity Allocation Committee is unable to allocate electricity to a Category 4

Applicant on the date when such Applicant request such electricity, the Capacity

Allocation Committee may re-consider the Applicant’s application at every subsequent

meeting of the Capacity Allocation Committee and determine whether there is

available electricity.

27.3 The Regulator shall prescribe the Allocation Criteria for granting applications for

Additional Loads and New Connections by Category 4 Applicants including the

Allocation Criteria for prioritising applications, determining the amount of electricity to

be supplied and the date on which it will be supplied to a Category 4 Applicant.

27.4 All Category 4 Applicants must provide the information specified in the Allocation

Criteria.

27.5 The Allocation Criteria may be updated from time to time by the Regulator and shall

be applicable to applications submitted to the Capacity Allocation Committee by

Category 4 Applicants subsequent to the issue of any new criteria.

27.6 If an application made by a Category 4 Applicant is deferred by the Capacity

Allocation Committee for a decision to a later date, and if the Applicant is dissatisfied

with the decision, the Applicant may refer such dispute to adjudication in terms of

section 30 of the Act.

27.7 The Licensee shall have the right to audit all Category 4 Applicants in terms of rule30

from time to time, on reasonable notice, in order to assess whether the information

submitted by the Category 4 Applicant in terms of rule 27.4 and upon which his

application was assessed and granted was true and correct.

28 ENERGY EFFICIENCY CRITERIA

28.1 Should a Category 2 Applicant, a Category 3 Applicant or a Category 4 Applicant’s

application for a New Connection or Additional Load be granted he shall, as a

condition of the continued supply of such additional electricity, be required to-

28.1.1 use the additional electricity, which is supplied pursuant to an approved

application, efficiently; and


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28.1.2 comply with the Energy Efficiency Specifications determined by the

Regulator from time to time in respect of such Additional Load or New

Connection.

28.2 Category 3 Applicants and Category 4 Applicants must, in addition to the obligations

set out in rule 28.1, furnish the Licensee with a certificate confirming that the

Applicant’s operations, at which the New Connection or Additional Load is supplied, is

fully compliant with the Energy Efficiency Specifications prepared by an independent

professional engineer or certified energy manager, who is suitably qualified to provide

such a certificate, in the Licensees discretion.

29 APPROVED APPLICATIONS

29.1 Customers shall not be permitted to consume more electricity than the amount

allocated pursuant to an application made in terms of the Rules.

29.2 Customers, once they are allocated electricity in terms of the Rules, shall be subject

to the ECS rules.

29.3 Notwithstanding the capacity for electricity growth as at the Commencement Date as

determined by the System Operator, Applicants who applied for a New Connection or

Additional Load before 1 November 2007 and to whom a Licensee has provided a

written undertaking to supply electricity for such New Connection or Additional

Growth, will be connected in accordance with the normal business practices of the

Licensee and shall not be required to apply for such New Connection or Additional

Load in terms of the Rules.

29.4 Any Applicant who is supplied with electricity in accordance with rule 29.3 shall be

subject to the ECS Rules.

30 AUDIT AND ACCESS RIGHTS

30.1 The Licensee, its authorised agents or the Regulator shall have the right to review the

building and facility designs of any Applicant in order to ensure compliance with the

Energy Efficiency Specifications.

30.2 Subsequent to the supply being made available, the Licensee its authorised agents or


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the Regulator shall have the right to audit the electricity usage of the Customer in

order to ensure continued compliance with the Energy Efficiency Specifications.

30.3 Where a Customer is found to be in breach of the Energy Efficiency Specifications

and/or the ESC Rules, the Licensee shall be entitled to adjust the Customer’s Monthly

Energy Allocation downwards.

31 ALTERNATIVE ENERGY ARRANGEMENTS

31.1 An Applicant may enter into bi-lateral power purchase agreements with independent

generators, other than the Licensees in order to meet all or a part of its supply

requirements.

31.2 Any electricity supply provided by Licensees will be supplied in accordance with the

Rules.

31.3 Power supplied by the independent generator shall be treated as unfirm on the

Interconnected Power System and a Licensee shall not be obliged to provide standby

power in the event of the independent generator not meeting the supply requirements

of the Applicant, unless the provision of such standby power is contracted with a

Licensee.


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ADDENDUM TO ELECTRICITY SUPPLY QUOTATIONS / SUPPLY AGREEMENTS ENERGY EFFICIENCY SPECIFICATION for SUPPLIES > 100 Kva

TERMINOLOGY The following abbreviations and terminologies have been used in the text of the document:

EECC Energy Efficiency Compliance Certificate

ECSA Engineering Council of South Africa

HVAC Heating, Ventilation and Air Conditioning

VSD Variable Speed Drive SABS South African Bureau of Standards

REVISIONS AND MODIFICATIONS The distributor reserves the right to issue revisions, modifications and amendments to this specification

without prior notice or prejudicial liabilities. 1. FORWARD This document describes energy efficiency requirements together with an independent compliance

procedure that must be met by all applicants for new or additional electricity supplies that involve:

1.1. Electricity supply greater than 100Kva.

1.2. A new electricity supply or an extension to an existing supply.

1.3. Consumers supplied from the interconnected grid and its extension into neighbouring countries.

The document describes the purpose and objectives of these requirements and the independent

compliance procedure. It provides the various specific minimum energy efficiency requirements

that must be met in order to qualify for a new or additional electrical supply as defined above

before.

2. PURPOSE AND OBJECTIVES

The energy efficiency and independently certified compliance requirements for electricity supplies are

now a prerequisite to achieve the following objectives:

2.1. To ensure the right fuel or energy source is used for end use applications. Wherever viable and

practical to do so, alternative energies and technologies when available, should be deployed in

preference to grid electricity. Examples include solar energy for heating water; liquid and solid

fuels for thermal applications such as cooking and industrial heat applications.


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2.2. To assist all new electricity consumers or consumers taking additional supply to obtain maximum

value from their expenditure on energy.

2.3. To assist Eskom in managing current electricity supply constraints in the country. In particular also

to ensure that electricity will not be wasted in some applications, resulting in other potential

consumers being deprived of electricity.

2.4 To avoid wasteful and misuse of scarce national energy resources while inculcating ever higher

standards of energy efficiency practices in support of Government energy policy.

2.5. To encourage the deployment of all energy resources in a prudent and environmentally

responsible manner.

5.�. COMPLIANCE PROCEDURE

It is essential to ensure a minimum level of energy efficiency has been applied to all new or additional

electricity supply applications. Without independent certification that this has taken place, it will not be

possible to connect new supply applications. It is in the mutual interest therefore of all electricity users

to work together with their respective distributors to achieve the objectives described in Section 2

above.

New consumers or existing consumers wishing to obtain an extension to an existing supply are

encouraged to continually use energy accounting practices and methodologies to ensure sustained

energy savings. Such consumers are also required to adhere to all relevant South African Energy

Efficiency Codes and Standards of Best Practice together with relevant Building Regulations, Health

and Safety Legislation and all other pertinent statutory requirements.

All applicants for an electricity supply under these arrangements must submit to the distributor an

Energy Efficiency Compliance Certificate (EECC) provided by an ECSA Registered Engineer, a

Certified Energy Manager or other independent authorities approved by the Distributor. Exemption:

Although still required to comply with this specification new or additional supplies not exceeding 1MVA,

are exempted from providing an EECC.

On receipt of the EECC, which will be accepted as satisfactory proof of compliance, the Distributor will

connect and energise the supply. Should minor refinements be necessary to energy efficiency elements

of the application then the distributor will require that these be attended to within a reasonable period

after connection.


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4. AUDIT The distributor, in the Electricity Supply Agreement with the consumer, also reserves the right to audit

the manner in which electricity is used after a power supply is provided to ensure ongoing compliance to

the general principles of energy efficiency described in this document.

5. ENERGY EFFICIENCY REQUIREMENTS

5.1. Context and Application The various energy efficiency requirements described in this section are regarded as the minimum

standards necessary to qualify for a new electricity supply as previously defined. While this is not an

exhaustive list of best energy efficiency practices, an applicant and their professional energy advisors

will be expected to enhance levels of energy efficiency and electricity conservation where ever it is

practical and prudent to do so.

The requirements listed below are intended as an overall set of guidelines to assist power supply

applicants and their energy advisors in producing the necessary Energy Efficiency Compliance

Certificate (EECC). Being a general set of requirements, not all the criteria will be applicable to every

consumer – consumers must therefore select and comply only with those criteria that are reasonably

applicable to their specific installation.

5.2. Lighting

• No incandescent or other inefficient lighting technologies may be used.

• In all applications, the most efficient lamp must be used to attain the required levels of

illumination.

• Occupation sensors must be utilised where practically possible.

• Automatic lighting control systems with relevant occupancy sensors to be deployed in low traffic

building areas such as stairwells, store areas and underground secure parking areas.

• Non occupied office space lighting to be put off at night or level of illumination reduced to

conserve electricity.

• Use daylight whenever possible in lieu of artificial light.

• External lighting for pathways, pedestrian areas etc to deploy renewable solar lighting where

ever practical to do so.

• All relevant new building codes of practice and health and safety legislation to be fully adhered

to.

5.3. Electrical appliances

• All electrical appliances to be SABS approved.


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• Electronic equipment such as computers, computer peripherals photocopying machines to be

switched OFF at night and other times when not is use, when it is safe and efficient to do so.

• All heavy duty electrical appliances that require periodic servicing and maintenance, according

to manufacturers instructions, are covered with an appropriate service contract.

5.4. HVAC

• Employ only high efficiency HVAC systems and make use of occupancy sensors where

practical.

• Make use of most-efficient HVAC control systems to create optimum working environment using

minimum energy.

• Ensure new HVAC plant have regular maintenance and service contracts in place with

professional service companies.

5.6. Water-heating

• Employ solar water heating and heat pump technologies only.

• Insulate hot water pipes and hot water storage tanks.

• Properly functioning thermostatic controls are a core feature of all hot water systems and must

be properly maintained

• Thermostats must be set at the most efficient level.

• Low flow shower heads must be used, where applicable.

5.7. High-efficiency motors

• High-efficiency motors are available up to 90Kw rating and these must be used in all

applications of 90Kw or less.

• Variable speed drives (VSD) should be used in all parts of the process where output and/or

quality of product will not be compromised.

5.8. Steam Generation

• Steam must not be generated using electricity. Alternative energy sources such as solid fuel,

heavy fuel oil and other liquid fuels should be deployed. In exceptional cases where

environmental considerations preclude the use of alternative fuel, electricity may be used only

with the explicit approval of the distributor.

• Optimum insulation thickness must be used for the boiler and all steam and condensate pipe

work.

• Regular service and boiler maintenance contracts should be in place.


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5.9. Electrical infrastructure

• Use appropriate electrical conductor size on new installations to reduce distribution losses.

• Optimise plant and large motor power factors to reduce maximum demand and to ensure a

power factor of 0.9 lagging or better at all times.

• Exploit off peak electricity tariffs where they are available and it is practical to do so.

• Deploy automatic electricity control technology where ever it is prudent and practical to do so.

Examples include automatic time control clocks and thermostatic controls.

5.10. Compressed Air

• Employ a compressor load management systems if 2 or more compressors are to be used.

• Design pneumatic systems to minimise losses and wastage.

• Where practical and if alternative more efficient technologies / tools exist, preference should be

given to these over pneumatic applications.

5.11. Buildings

• Insulate walls, ceilings and roofs.

• Increase light reflectance on walls and ceilings.

• Use daylight whenever possible in lieu of artificial light.

• Employ a load management system to interrupt non-essential load when possible.

• Use energy efficient glass or 3M film and shade windows from direct sun.

• Design the electrical installation to ensure that non-essential loads are grouped on the same

circuits. This will facilitate future remote shedding of these non-essential circuits by the

distributor (using smart meter technologies)

• Where possible, orientate the building to maximize energy efficiency.

5.12. Lifts and Escalators

• Escalators to switch to crawl or OFF when not in use.

5.13. Process efficiency

• Avoid the use of electricity in any thermal process application, unless only possible with an

electrical technology.

• Optimise process to ensure maximum efficiency; benchmark against best practices.

• Where possible, waste heat must be recovered and used elsewhere in the process.

• Prior to ordering manufacturing equipment, where possible, procure machinery which uses

forms of energy other than electricity.


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5.14. Cooking and Food Preparation

• Use gas for cooking instead of electric hotplates.

• Deploy electric micro wave rather than conventional electric cooking where ever possible to do

so.

• Deploy highly insulated containers for hot water dispensers for beverages.

5.15. Renewable Energy

• Any opportunity to use renewable forms of energy must be used.

• Renewable energy may be used alone or in combination with limited electricity top up for

various end use applications. Examples include solar hot water systems and solar lighting.

5.16. Co-generation

• Co-generation should be considered where possible and where sufficient quantities of waste

heat and/or process by-product is available or when superheated steam can be generated and

the low pressure steam used for process heating.

• Electricity so generated may either be used locally to offset own consumption, sold to any other

party and wheeled across the networks of the distributor or it may be sold to Eskom / the

distributor in terms of a Power Purchase Agreement (PPA)


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RIGHT TO CONSUME (RTC) TRADING RULES

1 Status of the Rules

1.1 The Rules shall come into operation on the Commencement Date.

1.2 The Rules govern the activities and actions of the RTC Trading System.

1.3 These Rules, including any decision or determinations made under the Rules, are

applicable to and binding upon –

1.3.1 the Regulator, all officers and employees of the Regulator;

1.3.2 the Administrator;

1.3.3 the Licensees, all officers and employees of the Licensees;

1.3.4 the Trade Participants, officers and employees involved in the management or

administration of RTC Trading; and

1.3.5 every person utilising the RTC Trading System or concludes a Trade in terms of

the Rules or exchange the right to consume electricity at normal rates in terms of

the ECS Rules.

1.4 The Rules remain binding on any past Trade Participants in respect of any act or

omission which occurred at the time when such past Trade Participant was still a

Trade Participant in terms of the Rules.

1.5 The Administrator must, by notice, inform a Trade Participant of any decision or

determination of the Regulator with which the Trade Participant must comply.

1.6 Every Trade concluded by the Trade Participant with another Trade Participant, shall

be concluded on the specific condition that the Trade is entered into subject to the

provisions of the Act and the Rules.

2 EXISTENCE OF THE RTC TRADING SYSTEM

2.1 The Regulator may at any time, in its sole discretion, by written notice to the


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Administrator suspend or terminate the RTC Trading System ("Notice"):

2.1.1 if in its opinion the object of RTC Trading as set out in Rule 7.2 is not being

achieved; and/or

2.1.2 for any reason that the Regulator may deem fit.

2.2 The Administrator shall within 3 (three) business days of receipt of the Notice, publish

such Notice to the Trade Participants mutatis mutandis as contemplated in Rule 6 and

on the RTC Trading System.

2.3 The Regulator will approve and cause the Notice to be published in the Government

Gazette, as soon as may be reasonably possible after the date of publishing the

Notice contemplated in Rule 5.2. The Regulator will advise the Trade Participants of

the expected date of publication of the Government Gazette.

2.4 The decision of the Regulator as contemplated in Rule 5.1 will come into effect on the

day it is approved by the Regulator in terms of Rule 5.2.

2.5 Any RTC Trading already captured on the RTC Trading System on or before the day

the Notice is published in the Government Gazette shall be Settled in terms of the

Rules

2.6 The Administrator shall not capture any RTC Trading on or after the publication of the

Notice on the Government Gazette.

3 NOTICES

3.1 Every Trade Participant must notify the Administrator of a physical address, a postal

address, a facsimile number and an electronic mail address where notices issued by

the Administrator may be delivered.

3.2 A notice to a Trade Participant issued by the Administrator must be in writing, must be

transmitted via electronic mail to the Trade Participant, and is deemed –

3.2.1 to have been received on the date of transmission, until the contrary is proved by

the Trade Participant; and


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3.2.2 to be a notice in writing in terms of section 12 (1) of the Electronic Communications

and Transactions Act, 2002.

3.3 Despite Rule 6.2, a notice issued by the Administrator may also be sent to a Trade

Participant's physical address, postal address or facsimile number and such notice –

3.3.1 if delivered by hand during business hours at the Trade Participant's physical

address referred to in Rule 6.1, will be deemed, until the contrary is proved by the

Trade Participant, to have been received on the date of delivery; or

3.3.2 if posted by pre-paid registered post from an address within the Republic to a

Trade Participant's postal address referred to in Rule 6.1, is deemed, until the

contrary is proved by the Trade Participant, to have received by no later than the

seventh day after the date of posting; or

3.3.3 if transmitted by facsimile to a Trade Participant number is deemed, until the

contrary is proved by the Trade Participant, to have been received on the date of

transmission.

4 GENERAL PROVISIONS AND OBJECTIVES:

4.1 Resultant Allocations to Sell to each and every ECS Customer create RTC Units

capable of disposal in favour of ECS Customers with Resultant Allocations to Buy in

terms of the Rules.

4.2 The object of RTC Trading is to achieve a sustainable reduction in electricity

consumption in South Africa by, spreading the available energy allocations in the

most optimal way with the least impact on business and the economy of the Republic.

5 APPLICATION FOR TRADE PARTICIPANT STATUS

5.1 Any ECS Customer may apply to the Regulator for approval to be registered as a

Trading Participant in terms of the Rules.

5.2 An application for Trade Participant status must be made to the Regulator in the

manner and on the form prescribed by the Regulator.

5.3 Upon making application for Trade Participant status each applicant must agree to be


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bound by the Act and the Rules, which agreement may be concluded by electronic

mail or other electronic means.

5.4 The Regulator may require an applicant to furnish information, and may, with the

consent of the applicant, institute any such investigation which it deems necessary, to

verify information submitted by the applicant in support of an application.

5.5 The agreed or reasonable costs of verification of information referred to in 8.4 will be

borne by the applicant.

5.6 The costs contemplated in Rule 8.5 shall be billed to the applicant in the manner

prescribed by the Regulator.

5.7 The Regulator shall consider an application for Trade Participant status within 30

days of receipt of such application and shall notify the applicant in writing of its

decision to grant or refuse the applicant Trade Participant Status.

5.8 The Regulator will furnish an applicant with written reasons for its decision to refuse

an application for Trade Participant status upon receipt of a written request to do so.

5.9 The Regulator must maintain and hold open for inspection by the public at its

registered office, a register of all Trade Participants to whom Trade Participant status

has been granted.

5.10 A Trade Participant may not transfer or otherwise assign the rights, title or interest in

or to that Trade Participant registration to any other person without the approval of the

Regulator.

6 PRIVILEGES AND OBLIGATIONS OF TRADE PARTICIPANTS

6.1 Subject to the Regulator's approval of the application for registration and subject to

the Rules, such Trade Participant status shall enable a Trade Participant to Trade its

RTC Units with other Trade Participants.

6.2 A Trade Participant must:

6.2.1 satisfy at all times the Trade Participant status requirements as determined by the

Regulator in accordance with the Rules;


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6.2.2 enter into agreements required to govern the activities designated by the Regulator

in order to fulfil the functions and obligations of a Trade Participant;

6.2.3 in respect of each Trade entered into by the Trade Participants, comply with the

reporting requirements as determined by the Regulator;

6.2.4 in respect of each auction Trade entered into by the Trade Participant, comply with

the Settlement requirements as determined by the Regulator.

7 TERMINATION OF TRADE PARTICIPANT STATUS

7.1 A Trade Participant may terminate its status as such by giving one calendar month's

written notice of termination to the Regulator; provided that all approved RTC Trading

affecting such Trade Participant remain in force.

7.2 The Regulator shall within 10 (ten) days of receiving the notice referred to in Rule

10.1, consider such notice of termination and may accept such termination of Trade

Participant status either unconditionally or on such conditions as it may deem fit, or

may refuse to accept the termination of Trade Participant status until it is satisfied that

all outstanding obligations of such Trade Participant in terms of the Rules have been

completed.

7.3 The notification of termination of Trade Participant status by a Trade Participant shall

not be withdrawn without the written consent of the Regulator.

7.4 The Trade Participant status shall automatically terminate:

7.4.1 on the occurrence of an Event of Default; or

7.4.2 at anytime, on notice to the relevant Trade Participant as contemplated in Rule 6, if

the Regulator in its sole discretion deems it is necessary to terminate such Trade

Participant's status in order to protect other ECS Customers and/or the economy of

the Republic.

7.5 Neither the Regulator nor the Administrator shall have any obligation to notify the

Trade Participants of, or publish the fact that a Trade Participant's status as such has

terminated or the date from which such termination had taken effect.


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8 CONDUCT

8.1 No Trade Participant may commit any act or engage in any conduct likely to bring the

RTC Trading System into disrepute, and in particular may not:

8.1.1 create, or cause to be created, or do anything that is calculated to create a false or

misleading appearance of active trading or a false or misleading appearance with

respect to the RTC Trading System for, or the price to Trade in, the RTC Units;

8.1.2 participate in, assist, or withhold knowledge of any acts or omissions in violation of

any applicable law, rule or ethical code governing the Trade Participant activities in

respect of RTC Trading;

8.1.3 whether directly or indirectly, participate in the Trade of a RTC Unit which is

intended to have the effect of:

8.1.3.1 creating an artificial price for the Trading of RTC Units; or

8.1.3.2 maintaining the price at a level that is an artificial price for the Trade of a RTC

Unit;

8.1.4 by means of any fictitious transaction or device maintain, inflate or depress, or

cause fluctuations in the price for the Trade of a RTC Unit.

8.1.5 make statements or disseminate information which the Trade Participant knows, or

ought reasonably to have known:

8.1.5.1 to be false or misleading; and/or

8.1.5.2 to be likely to induce other Trade Participants to Trade or refrain from RTC

Trading; and/or

8.1.5.3 to be likely to have the effect of inflating, depressing or maintaining the price for

trading in RTC Units; and/or

8.1.6 issue a statement or disseminate information to the Regulator, which the Trade

Participant knows, or ought reasonably to have known, to be false or misleading

by:


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8.1.6.1 making or publishing any statement, promise or forecast which the Trade

Participant knows to be misleading, false or deceptive; or

8.1.6.2 concealing of material information at the Trade Participants disposal; or

8.1.6.3 inducing another person to Trade or refrain from RTC Trading.

8.2 A Trade Participant must:

8.2.1 act with integrity, dignity, proper skill, care and diligence, and exercise independent

judgement, in respect of a Trade;

8.2.2 provide full and accurate information in regard itself or a Trade whenever required

to do so;

8.2.3 maintain knowledge of and comply with applicable laws, rules and regulations of

government, governmental agencies and regulatory organisations governing the

Trade Participant's activities in respect of RTC Trading;

8.2.4 treat its own and other Trade Participants’ information with confidence and make

all reasonable efforts to ensure the confidentiality of each Trade, RTC Trading

information and RTC Trading System information.

9 CONTRAVENTIONS TO BE REPORTED

1.1 A Trade Participant must report to the Administrator any contravention which

comes to its attention, of the Act and the Rules committed by it and/or other Trade

Participant.

10 RTC TRADING SYSTEM

10.1 The RTC Trading System is established in terms of the Rules to facilitate the Trade of

the RTC Units.

10.2 The RTC Trading System shall make provision for:

10.2.1 an infrastructure for capturing bilateral transactions entered into between Trade

Participants in private;


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10.2.2 an infrastructure for bringing together Trade Participants who wish to engage in

RTC Trading for matching the offers and orders of RTC Units of multiple Trade

Participants where such matched Trade of RTC Units will constitute a transaction/s

and to Settle any RTC Trading done via auctions..

10.2.3 RTC Trading in minimum denominations of one RTC Unit per day.

10.2.4 registration of ECS Customers as Trade Participants which registration shall be a

pre-requisite to the participation in RTC Trading in terms of the Rules;

11 THE ADMINISTRATOR

11.1 The Regulator in consultation with the National Advisory Committee shall appoint the

Administrator.

11.2 The Administrator shall be responsible for:

11.2.1 the administration of the RTC Trading System and may from time to time amend

the general administrative provisions relating to RTC Trading;

11.2.2 publishing limitations to RTC Trading in respect of, but not limited to:

11.2.2.1 the periods during which RTC Trading will be accepted; or

11.2.2.2 the minimum and maximum length of RTC Trading; or

11.2.2.3 RTC Trading restrictions across international borders and or certain networks;

or

11.2.2.4 the minimum and maximum volumes of RTC Trading permitted before network

studies have to be performed; or

11.2.2.5 RTC Trading System closing times or notice periods;

11.2.3 the conducting of credit checks, establishing the necessary security requirements

and/or suspension of access to the RTC Trading System as it may deem fit, to

protect other Trade Participants.

11.3 The Administrator shall from time to time publish on the RTC Trading System


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restrictions or limitations to protect networks, national and regional system security

and integrity, and other Trade Participants, including the Pre-Published Network

Limitations.

11.4 The business days on which the RTC Trading System is closed for the purposes of

RTC Trading, must be published 10 workdays before the respective day of closure by

means of a notice on the RTC Trading System to all Trade Participants.

12 GENERAL RULES IN RESPECT OF RTC TRADING:

12.1 A Trade Participant shall by trading RTC Units in terms of the Rules :

12.1.1 be deemed to have decreased its Monthly Energy Allocation the Adjusted Monthly

Energy Allocation or the Trade Adjusted Allocation, as the case may be by the

proportionate number of the RTC Units disposed of;

12.1.2 instead of not being allowed to consume the electricity which is represented by the

RTC Units that have been disposed of, be charged a Excess Energy Charge for

consuming the electricity which is represented by the RTC Units disposed of in

terms of the Rules;

12.1.3 be deemed to have increased its Monthly Energy Allocation the Adjusted Monthly

Energy Allocation or the Trade Adjusted Allocation, as the case may be by the

proportionate number of RTC Units acquired; and ;

12.1.4 be prohibited from using the RTC Trading System to speculate in away in RTC

Units.

12.2 Trade Participants will be liable to pay for all electricity consumed during any Billing

Period in accordance with the contractual arrangement between the Trade Participant

and the relevant Licensee, irrespective of any RTC Units Traded. The calculation of

Excess Energy Charges applicable in terms of the ECS Rules shall be determined in

relation to the Final Monthly Energy Allocation.

12.3 RTC Trading shall only be permitted between Trade Participants within the Republic

or between Trade Participants who are International Customers, with the consent of

the Regulator and the relevant International Utility.


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12.4 Trade Participants who are in a special pricing arrangement may only purchase

and/or sell RTC Units with the written consent of the Licensee(s) that is the supplier of

electricity to the Trade Participant(s).

12.5 Licensees shall only be entitled to Trade with RTC Units where a Licensee is

regarded as a Customer in terms of the ECS Rules.

12.6 Trade Participants shall at all times adhere to the Rules. In the event that the Trade

Participants do not adhere to the Rules, the Regulator is entitled to revoke the

registration and the Trade Participant will no longer be entitled to Trade.

12.7 Trade Participants shall only Trade as contemplated in Rules 18 and 19, shall not be

entitled to Trade retrospectively and RTC Trading shall be in respect of future time

periods for energy still to be consumed or used.

12.8 A Trade Participant shall not be permitted to buy more RTC Units than its Resultant

Allocation to Buy and shall not be permitted to sell more RTC Units than its Resultant

Allocation to Sell for longer than one month in a calendar year, unless:

12.8.1 the Trade Participant has obtained the Regulator's written consent thereto; and

12.8.2 such written permission is lodged with the Administrator before the Trade is

registered.

12.9 The Regulator may, from time to time, restrict a portion of Customer's Resultant

Allocation to Sell from Trade.

12.10 RTC Units shall not be bought and sold within the same RTC Trading period, unless:

12.10.1 good cause is shown to the Administrator that the Trade does not constitute

speculation;

12.10.2 the Administrator has approved the second Trade in writing prior to such Trade;

and

12.10.3 such written permission is lodged with the Administrator before the Trade is

registered.


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12.10.4 only a Trade registered and approved by the Administrator shall be deemed as a

valid Trade for the purposes of the Trade-Adjusted Allocations and calculation of

the Final Monthly Energy Allocation to be accepted by the relevant Licensees for

purposes of billing the Trade Participants for the supply of electricity in terms of the

ECS Rules.

13 PROCEDURE

13.1 All applications for registration as a Trade Participant shall be submitted to the

Regulator by way of the RTC Trading System.

13.2 All RTC Units proposed to be Traded shall be submitted to the Administrator by way

of the RTC Trading System in accordance with Rules 18 and 19.

13.3 All data relating to a bilateral trading agreement and/or auction shall be submitted to

the RTC Trading System by the relevant Trade Participants for approval, validation

and registration by the Administrator.

13.4 The Administrator shall notify all relevant Trade Participants of the verified and

approved request to Trade.

13.5 The Administrator shall record each Trade on the RTC Trading System and relay

such Trade Adjusted Allocations to the relevant Licensees.

13.6 Licensees shall use the Final Monthly Energy Allocations for the purpose of billing its

ECS Customers.

13.7 The Administrator shall also provide the information relating to each Trade and/or

each Trade Adjusted Allocation to the System Operator in a format as agreed

between the Parties.

14 TRADE OF RTC UNITS WITHIN A GROUP

14.1 Notwithstanding Rules 19.2, 19.3, 19.4.2, 19.4.3 and 19.6 retrospective RTC Trading

at the end of a Billing Period between two or more ECS Customers within a registered

Group in order to comply with the ECS Rules is permitted provided:

14.1.1 such Group is registered with the Administrator prior to commencement of the


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relevant Billing Period and all ECS Customers in the Group are registered

individually as a Trade Participant;

14.1.2 all ECS Customers in the Group have the same Measurement Date and are read

at the same time on such Measurement Date; retrospective Trade within a Group

is utilised only for the purpose of equalising or minimising the Excess Energy

Charge payable by the Group, and as such Trade Participant's right to Trade

ahead of time with ECS Customers inside and or outside the Group is not limited

and the need for each ECS Customer to buy RTC Units ahead of time if a bigger

energy allocation is needed during a Billing Period is not replaced;

14.1.3 ECS Customers within the Group do not exceed their individual Resultant

Allocation to Buy, nor their Resultant Allocation to Sell less any relevant Trade-

restricted Allocations without prior permission by the Regulator;

14.1.4 the Final Monthly Energy Allocation for each ECS Customer in the Group

registered on the RTC Trading System at 08h00 on the day immediately following

the Measurement Date shall be the allocation used for billing purposes.

14.1.5 The Group does actively control the electrical usage of each ECS Customer within

the Group per integration period as if they were one ECS Customer with one

Monthly Energy Allocation.

15 BILATERAL TRADING

15.1 The Minimum Trade Volume for bilateral RTC Trading is 1 (one) RTC Unit per day,

unless otherwise directed by the Administrator.

15.2 Trade Participants shall register the relevant RTC Trading data on the RTC Trading

System, where after the Administrator shall verify and approve of the data and

communicate accordingly.

15.3 Only a Trade that has been verified and approved by the Administrator by 09h00 on

the day immediately preceding the date of the proposed Trade shall constitute a valid

Trade and be communicated to the relevant Licensee for purposes of billing the

relevant Trade Participants in terms of ECS Rules.


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15.4 Notwithstanding the provisions of Rule 18.3:

15.4.1 each bilateral Trade which exceed 120 RTC Units per day; and/or

15.4.2 each bilateral Trade which either exceed Pre-published Network Limitations as will

be reflected on the RTC Trading System from time to time or are found to put the

RTC Trading System's security at risk as determined by the Administrator in its

sole discretion; and/or

15.4.3 each bilateral Trade between a Customer of one Licensee and a Customer of

another Licensee; and/or

15.4.4 each bilateral Trade which occur in conflict with any of the ECS and/or EGM Rules,

will be subject to a hold-period of 2 (two) business days in respect of approval and

verification by the Administrator and or relevant parties and the RTC Trading data

relating to the bilateral Trade scenarios contemplated in Rules 18.4.1, 18.4.2 and

18.4.3 shall be entered into the RTC Trading System at least 2 (two) business

days before the Trade registration date mentioned in 18.3, unless specific

exemption has been obtained from the Regulator or relevant parties. Such

exemption shall be submitted with the submissions of the proposed Trade details

as contemplated in 18.3.

15.5 A Licensee may prohibit the Trade contemplated in Rule 18.4.3 only on the grounds

of a network constraint and/or other technical risks.

15.6 In the event that the RTC Trading data relating to a bilateral agreement between

Trade Participants is approved and verified by the Administrator, such bilateral

agreement shall be legally binding between those Trade Participants.

15.7 All terms of a bilateral trading agreement, including pricing and payment shall be

negotiated and agreed upon between the Trade Participants and shall not be

regulated by or recorded on the RTC Trading System.

15.8 Neither the Regulator nor the Administrator accepts any responsibility for the

enforcement of any bilateral agreement between the Trade Participants.


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16 AUCTION TRADING AND CLEARING

16.1 Details of proposed RTC Trading via auctions shall be submitted by 09h00 on the last

working day immediately preceding the week of the proposed Trade on the RTC

Trading System.

16.2 Only a proposed Trade that complies with all the Rules and the Pre-published

Network Limitations shall be considered for auctioning, unless specific exemption has

been obtained from the Regulator. Such exemption shall be submitted with

submission of the proposed Trade details as contemplated in Rule 19.1.

16.3 The Minimum Trade Volume in respect of auctioning shall be 7 RTC Units, spread

evenly over the week.

16.4 The auction function will be conducted by 14:00 on the same day defined in 19.1 by

way of the RTC Trading System, under the control and supervision of the

Administrator. Bids and offers will be matched taking into account network and

generation constraints. Bids/offers may be partially matched provided the Trade

Participants participating in the auction have agreed thereto.

16.5 Matching bids and offers shall be Cleared and Settled at the Auction Clearing Price as

determined by the price indicated as the minimum acceptable price by the seller

whose offer to dispose of RTC Units could be matched with a willing buyer. The

Auction Clearing Price shall always favour the buyer.

16.6 The Administrator shall publish the results of the auction and notify participants of the

outcome by 15:00 of the same day defined in 19.1, and Settle and reconcile all

financial aspects of the Trade.

17 SYSTEM OPERATOR PARTICIPATION IN AUCTION PROCESS

17.1 The Regulator may from time to time, subject to the relevant provisions of the Rules,

allow the System Operator to participate in the auction process in a manner

prescribed by the Regulator.

17.2 Subject to Rule 20.1, the System Operator may:

17.2.1 offer surplus energy to Trade Participants by adding the surplus energy expressed


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in RTC Units to the auction process as a Price Taker; or

17.2.2 effect additional savings through buying of residual RTC Units offered by Trade

Participants above the Auction Clearing Price, after the auction has been Cleared

and at the prices offered by the Trade Participants.

18 SECURITY

18.1 Upon submission of a bid to buy RTC Units as contemplated in Rule 19, a Trade

Participant must hold own funds in its Funds Settlement Account, sufficient to meet

the Trade Participant's maximum exposure or maximum amount that might become

due to the Settlement Agent if the full amount of RTC Units is bought as submitted

and at the maximum price.

18.2 The Settlement Agent shall have the right to transfer the funds referred to in Rule 18.1

from the Trade Participant's Funds Settlement Account to the Trust Account at the

time mentioned in Rule 19.1, and hold such funds in the Trust Account until the

results of the auction are published as contemplated in Rule 16.6.

18.3 Where non-compliance by the Trade Participant with Rule 21.1 occurs, the specific

bid to buy RTC Units shall be deemed to be an invalid bid and shall not be included in

the auction process.

19 SETTLEMENT

19.1 The Regulator shall open a Trust Account where all the funds from the Funds

Settlement Accounts shall be deposited.

19.2 The Administrator must accept from the Settlement Agent all funds arising from time

to time from Funds Settlement Accounts, and must on instructions from the

Settlement Agent, pay to Trade Participants the funds which are required to be paid to

the Trade Participants in terms of the Rules.

19.3 All funds in the Trust Account must be invested as determined by the Regulator.

19.4 In depositing funds with banks or investing as contemplated in Rule 19.3, the

Administrator will act as agent on behalf of the Trade Participants. Funds so

deposited or invested will not form part of the assets of the Regulator.


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19.5 In respect of funds held on behalf of Trade Participants in the Trust Account in terms

of the Rules, the Administrator will pay to the Trade Participant such interest as it may

from time to time receive on such funds, less a charge in respect of the administrative

services rendered by the Regulator.

19.6 A Trade Participant must open and maintain a Funds Settlement Account with the

Administrator and such account will be monitored and reconciled daily.

19.7 A Trade Participant may instruct the Settlement Agent to transfer funds held in the

Funds Settlement Account into a Trust Account.

19.8 An entry may only be effected in the Funds Settlement Account if such entry has been

generated as part of the process of the Settlement of RTC Trading by:

19.8.1 The RTC Trading System; or

19.8.2 the Settlement Agent; and

19.9 A Trade Participant may only purchase Resultant Allocation to Buy if:

19.9.1 the details of that Trade Participants held by the Settlement Agent correspond with

and match the details of the Trade Participant on the RTC Trading System;

19.9.2 the Trade Participant is entitled to acquire RTC Units;

19.9.3 the Trade Participant has sufficient funds on its Funds Settlement Account

required for the purposes Settlement as contemplated in the Rules; and

19.9.4 the Settlement Agent has transferred the required funds from the Trade

Participant's Funds Settlement Account to the Trust Account, prior to the RTC

Trading.

19.10 A Trade Participant may only dispose of the Resultant Allocation to Sell less any RTC

Units disposed of and in respect of the applicable Billing Period, if the Administrator

confirms that:

19.10.1 such Trade Participant has a sufficient RTC Units to sell;

19.10.2 the Trade Participant is entitled to dispose such Resultant Allocation to Sell less


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any RTC Units disposed of and in respect of the applicable Billing Period; and

19.10.3 such Resultant Allocation to Sell less any RTC Units disposed of and in respect of

the applicable Billing Period will be available for Settlement on the Settlement

Date.

19.11 The Settlement Agent shall within 2 (two) days from the date of Trade instruct the

Administrator to transfer the funds from the Trust Account to the designated account

of the relevant Trade Participant that has disposed of its RTC Units and the

Administrator shall transfer such funds within 2 (two) days of receiving such

instructions for the Settlement Agent.

19.12 In the event of an unsuccessful RTC Trade, the Settlement Agent may instruct the

Administrator to transfer the funds of the Trade Participant back to the Funds

Settlement Account.

19.13 A Trade Participant must comply with the Settlement procedures prescribed by the

Settlement Agent.

19.14 Settlement must be based on the auction and Clearing process contemplated in

Rules 19 and 21 respectively.

19.15 Settlement Agents must commit to transfer the funds from the Funds Settlement

Account to the Trust Account by the time specified by the Regulator.

20 DISPUTES

1.2 The resolution of disputes and remedies provided in Section 30, 31, 32 and 33 of

the Act shall apply mutatis mutandis to resolve any disputes arising as a result of RTC

Trading in terms of the Rules.

21 DISCIPLINARY MATTERS

21.1 An alleged contravention of or non-compliance with the Act, the Rules or a decision or

determination of the Regulator, which allegation must be reduced to writing, shall be

subject to a preliminary investigation by the Regulator or by a person authorised by

the Regulator, who must report in writing his findings to the Regulator.


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21.2 The Regulator must, where satisfied that there is a prima facie case of contravention

or non-compliance by the Trade Participant appoint a disciplinary tribunal;

21.3 If the Regulator finds the Trade Participant guilty of the alleged contravention or non-

compliance, it may:

21.3.1 reprimand or warn the Trade Participant in private or by publication of the details of

the reprimand or warning;

21.3.2 censure the Trade Participant;

21.3.3 impose a fine on the Trade Participant not exceeding [insert amount.];

21.3.4 suspend the Trade Participant status;

21.3.5 terminate the Trade Participant status;

21.3.6 order the Trade Participant not to Trade;

21.3.7 require a Trade Participant to take steps to remedy or prevent the recurrence of

the misconduct which has given rise to the proceeding;

21.3.8 require the Trade Participant to give a written representation in such terms as the

Regulator deems fit as to the future conduct of that Trade Participant;

21.3.9 cancel the registration of any Trade Participant who is found to have been a party

to the contravention:

Provided that the provisions of Rule 24.3 are not mutually exclusive and the Regulator

may take any one or more of such actions in respect of the Trade Participant.

21.4 The Regulator may make any order of suspension or order not to Trade, subject to

such conditions as it deems fit, and may give the Trade Participant directions on the

conduct of the Trade Participant's affairs.

21.5 Any decision contemplated in Rule 24.3.4 may be expressed to take effect, or cease

to have any effect, upon the happening of an event or the fulfilment of a condition.

21.6 If any employee of a Trade Participant, or any duly authorised person acting on behalf


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of a Trade Participant, performs any act or omits to do any act, which act or omission

if done or omitted by that Trade Participant would constitute a contravention or non-

compliance as referred to in Rule 24.1, then such Trade Participant is liable for such

contravention or non-compliance as it had committed the contravention or non-

compliance.

21.7 Fines

21.7.1 A fine imposed on a Trade Participant who has been found guilty of any

contravention or non-compliance referred to in Rule 24.1 shall not exceed R[insert amount] for each contravention or non-compliance.

21.7.2 The Regulator must stipulate the time and the manner of payment of the fine when

imposed.

21.8 Suspension

21.8.1 Where the Regulator has suspended a Trade Participant such Trade Participant:

21.8.1.1 is not permitted to Trade during the period of suspension unless with the

approval of, and on the conditions imposed by, the Disciplinary Tribunal;

21.8.1.2 must be permitted to retain and use during the period of suspension such

services and facilities as the Trade Participant may have been receiving from

the Regulator and a clearing house;

21.8.1.3 must comply with the Act, the Rules and the directive of the Regulator during

the period of suspension; and

21.8.1.4 must honour each existing and already approved Trade.

21.9 Expulsion

21.9.1 A Trade Participant expelled in terms of Rule 24.3.5, and who appeals in terms of

the Rules against such expulsion, is deemed to be suspended, and this Rule, in so

far as it relates to a suspension of a Trade Participant, shall apply mutatis

mutandis to the Trade Participant until the decision of the Regulator of appeal is

announced.


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21.9.2 Upon expulsion, the Trade Participant forfeits:

21.9.2.1 all rights under or by virtue of the Rules; and

21.9.2.2 any fee or levies paid to the Regulator.

21.9.3 Upon expulsion, the Trade Participant must honour each existing and already

approved Trade.

21.9.4 A Trade Participant may be expelled subject to such conditions as the Regulator

deems fit and the Regulator may direct the Trade Participant with regard to any

action it deems necessary.

21.10 Records of proceeding

21.10.1 A Trade Participant who has made representations to the Disciplinary Tribunal is

entitled to a copy of the record of the proceedings at which the representations

were considered.


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