The year 2023 represented a low-water mark in South Africa’s electricity production story.

The country experienced over 6 800 hours of load-shedding, much of it at stage 6, which saw South Africans go without power for up to 12 hours a day. What is positively startling is how different 2024 has been.

As of late September 2024, South Africa had not experienced load-shedding since 26 March 2024. Scepticism that the pause in load-shedding was related to the May general election soon ebbed away. South Africans have become increasingly comfortable since March, with the steadily growing public perception being that load-shedding is behind us.

Additional capacity has been added to the grid through a mixture of increased and improved Eskom capacity, rooftop solar and other sources of reliable base power, with government and business seemingly speaking with one voice.

Misplaced optimism?

While the optimism is refreshing, it may be misplaced, even if well intentioned. Government, Eskom and business have continued to emphasise that South Africa is not yet free of load-shedding.

As noted by President Cyril Ramaphosa, the electricity system is still vulnerable, with the supply gap between available and needed power remaining tight.

Furthermore, similar to the water infrastructure challenges that have escalated in Johannesburg recently, while sufficient energy may be available, infrastructure (particularly at a municipal level) continues to bedevil electricity supply through a lack of maintenance as well as theft and poor service delivery.

It is encouraging that many businesses remain vigilant as they proactively seek ways to mitigate load-shedding if it is ever to return. One way some have sought to protect themselves is through attaining a load-shedding exemption.

It is understandably an attractive option. In principle, an exemption negates the need to purchase expensive back-up generators or solar power infrastructure.

However, to accrue the full benefit of an exemption and avoid its pitfalls, it is vital to understand the regulatory framework governing load-shedding and on what basis certain electricity users or customers can be exempt from it.

Nersa’s Code of Practice for load-shedding

The National Energy Regulator of South Africa (NERSA) is the authority responsible for regulating the supply of electricity in South Africa. NERSA has issued a national code of practice known as ‘NRS 048-9:2023’ (the Code of Practice) which sets out best practice for load-shedding and related matters.

It is a legal requirement for all licensees in the electricity supply industry to comply with the Code of Practice. NERSA has made it a licence condition for all licensees.

The Code of Practice deals with load-shedding exemptions. The general rule is that all electricity users should be subject to load-shedding based on the principle of equitable participation unless agreed otherwise in writing between the licensee and the customer.

An exemption can take the form of a letter or agreement. NERSA has delegated its authority to exempt customers from load-shedding to the various electricity utilities, eg Eskom, City Power and municipalities. In short, an electricity utility may exempt a customer from load-shedding based on factors including the following:

• The customer’s participation in a demand response programme (in other words, the customer and the electricity utility have agreed that the customer will give up a portion of their load for payment, and for the purpose of load reduction);
• The customer being categorised as a ‘critical load’, meaning that interruptions to its electricity supply must be avoided, otherwise this will negatively impact on health, safety, the environment, public infrastructure and the economy, as a few examples;
• The customer has implemented load curtailment measures through discipline, smart metering technology or load switches; or
• The customer is an independent power producer.

Notably, in the 2023 case United Democratic Movement and Others vs Eskom, the High Court found that the preventable failure of Eskom to provide electricity violated unjustifiably the rights to human dignity, life, freedom and security of the person, access to healthcare and education, among others, and ordered the minister of electricity, working with Eskom and other organs of state, to take all reasonable steps to ensure that electricity is supplied to the following institutions or facilities without interruption:

• Hospitals and other public health establishments;
• Public schools; and
• The South African Police Service and police stations.
  Using the lens of the Code of Good Practice, the above institutions would fall under the ‘critical loads’ category.

Risk factors relating to load-shedding exemptions

Customers who possess load-shedding exemptions are advised to confirm that the party that issued them has the requisite authority to do so. The party issuing the exemption must be the holder of a valid NERSA licence to supply or distribute electricity.

While NERSA has delegated the authority to grant exemptions to licensees, it holds the overall responsibility for exemptions. This is where customers who have a load-shedding exemption may face difficulties.

According to section 4.4.2.7 of the Code of Practice, if a load-shedding exemption is audited or questioned, NERSA must step in to investigate, and either confirm the exemption or reject it. In such cases, NERSA’s decision is driven by a set of factors listed in section 4.4 of the Code of Practice which include:

• Protection of critical and essential loads;
• Load-shedding schedule availability;
• Load-shedding schedule nature;
• Declaration of a system emergency;
• The minimal level of impact on customers;
• Predictability and advance warning of load reduction; and
• Customer load reduction participation.

An exemption is thus not impervious. If NERSA finds that none of the factors warranting an exemption exist, and the exemption should therefore not have been granted, there is a risk of the exemption being revoked.

We also note that load-shedding exemptions usually include a clause that states that the exemption does not cover ‘unforeseen electricity supply interruptions’. An exemption from load-shedding is not a guarantee against all electricity supply interruptions.

The decisions to grant or revoke an exemption likely constitute administrative action in terms of the Promotion of Administrative Justice Act, 2000 (PAJA). A customer may seek to have such actions reviewed and set aside in terms of PAJA or the principle of legality if the actions are found not to constitute administrative action.

Given the complexities involved, and the continuing risks posed by load-shedding
no matter how distant they may now seem, customers should not avoid attaining or maintaining an adequate supply of backup electricity.

The Code of Good Practice provides that certain categories of exempt customers such as data centres supplying critical national infrastructure should provide their own back-up facilities.

Until load-shedding is consigned to the past, we encourage electricity users, large and small, to be prepared and vigilant. Preparation is the best defence.

The views expressed in our weekly opinion piece do not necessarily reflect those of Farmer’s Weekly.

Webber Wentzel is one of Africa’s leading law firms, with over 150 years of industry knowledge and experience. Visit webberwentzel.com.

Mzukisi Kota is a partner at Webber Wentzel. Email him at [email protected].

Lubumba Kamukwamba is a partner at Webber Wentzel. Email her at [email protected].

Kelly-Rain Green is a candidate attorney at Webber Wentzel. Email her at kelly-[email protected].