EDI Holdings has welcomed Cabinet’s approval of the creation of six “wall-to-wall” Regional Electricity Distributors (REDs).

EDI Holdings is a government entity that overseas the restructuring of the country’s R35 billion electricity distribution.

CEO Phindile Nzimande said the decision would go a long way in speeding up the process to establish REDs in the six metropolitan centres as the first phase.

“It is a fundamental milestone in the transformation of the electricity sector, and makes a significant contribution to the creation of an electricity value chain which is both efficient and effective, and which is geared to providing a more equitable system of electricity supply,” said Nzimande.

They also welcomed the decision to establish the REDs as public entities, in terms of the Public Finance Management Act to be regulated by the National Energy Regulator of South Africa (Nersa).

Cabinet said the next steps would involve the drafting of legislation and business plan for the distributors’ establishment.

“We strongly believe the regulation of a large, monopolistic integrated national system such as the Electricity Distribution Industry should be conducted by a professional independent regulator reporting to central government, rather than by hundreds of municipalities,” said the CEO.

Also welcomed is the promulgation of an asset transfer framework soon, to enable the effective and orderly transfer of assets from local government and Eskom to the REDs.

This includes the development of a national tariff harmonisation framework, to ensure the rationalisation of tariffs nationally and the consolidation of RED1 in the Western Cape.

This to ensure that it becomes a successful, viable and sustainable entity that will be able to provide reliable, affordable and accessible quality supply of electricity to all, said Nzimande.

“This is a very significant day – in fact, we can describe it as a RED letter day for the electricity industry,” she said.

Source: BuaNews