Blow for City of Cape Town's aim to buy power as court refers matter back to govt

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A electricity pylon.
A electricity pylon.
  • The City of Cape Town sought permission to buy power directly from independent power producers (IPPs) due to ongoing blackouts.
  • However, the High Court has referred the matter - between CoCT and the National Energy Regulator of SA - back to intergovernmental dispute resolution.
  • According to the court, there was no urgency to rush to court and if any declared intergovernmental dispute was unsuccessful, any party could apply to the court for leave to re-enroll the application.

The North Gauteng High Court in Pretoria on Tuesday indefinitely postponed the application by the City of Cape Town's case in which the metro sought approval to purchase its own electricity from independent power producers.

High Court Judge Leonie Windell referred the dispute between the City of Cape Town and the National Energy Regulator of South Africa as well as the office of the minister of energy to intergovernmental dispute resolution processes in terms of section 41(3) of the Constitution.

As things currently stand, municipalities that have the capacity to procure electricity from IPPs and sell it for themselves must await a ministerial determination to do so.

During his State of The Nation Address in February, President Cyril Ramaphosa said municipalities in good standing would be able to procure their own power from IPPs. DA leaders in public office, including Western Cape Premier Alan Winde, welcomed the announcement, but said the courts must clarify the powers of councils and provinces in this regard.

The case has its beginnings in 2017, when the Democratic Alliance indicated that the City of Cape Town would go to court for the right to procure electricity from IPPs, as load shedding continued to undermine Eskom's ability to provide electricity reliably.

Postponing the application "sine die", the high court judgement said there were no time constraints and no urgency to rush to court after the legal opinion was received by the applicant.

"In fact, the application, which was instituted in July 2017, was only set down for hearing in May 2020. The City wrote one letter, dated 5 May 2017, to which it attached a copy of senior counsel's opinion on whether a section 34 determination is required by the minister," the judgement said.

The judgement said if any declared intergovernmental dispute in terms of section 41 of the Intergovernmental Relations Frameworks Act is unsuccessful, any party may apply to this Court for leave to re-enroll this application.

"The costs of the hearing on 11 and 12 May 2020 are to be paid by the applicant. Such costs will include the cost consequent upon the employment of three counsel," the judgement said.

Democratic Alliance MP Kevin Mileham said the the court decision on the matter was disappointing in that it further delayed the city's ability to provide electricity and to alleviate the impact of load shedding, by referring the matter back to the Intergovernmental Dispute Resolution Framework.

"In addition, it appears to ignore the lengthy period of time that this matter has been outstanding, without any attempt at resolution by the Minister or Nersa.

"During the five years since the initial application, the Minister could, at any time, have rendered this case moot by responding to or deciding on the city's application," said Mileham.

Mileham said the DA would push for the adoption of the party's private members' bill, the Independent Electricity Management Operator Bill, which he said would allow metropolitan municipalities that have the financial and technical capability to procure electricity without a ministerial determination to do so.

It was unacceptable that bureaucracy and "petty power politics" were hindering service delivery by a capable local government, Mileham added.

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