DEPARTMENT OF ENERGY REGULATORY POWERS

Introduction

South Africa’s national energy administration is now centred in the Department of Electricity and Energy (DEE), which was established on 1 April 2025 after electricity and energy functions were separated from the former Department of Mineral Resources and Energy. The Department is responsible for national energy policy, energy-security planning, legislative development and oversight of the electricity and broader energy sector. However, it does not exercise every regulatory function directly: important licensing and tariff powers are entrusted to the independent National Energy Regulator of South Africa (NERSA).

Statutory Basis of Regulatory Powers

The Department’s authority derives principally from the Electricity Regulation Act 4 of 2006, the National Energy Act 34 of 2008, the National Energy Regulator Act 40 of 2004 and other sector-specific legislation. The Electricity Regulation Act establishes the national electricity regulatory framework and designates NERSA as its custodian and enforcer.

The Minister of Electricity and Energy nevertheless possesses significant executive powers. Under section 34 of the Electricity Regulation Act, the Minister may, in consultation with the regulator, determine whether additional generation capacity is required, what energy sources should provide that capacity, how electricity produced should be sold or purchased, and whether procurement should involve private-sector participation. Procurement may also be required to follow a fair, equitable, transparent, competitive and cost-effective tendering process.

The Department also develops national energy policy, prepares planning frameworks, coordinates energy-security measures and oversees implementation of legislation. The National Energy Act supports planning aimed at adequate, affordable and sustainable energy supplies.

Limits: NERSA’s Independent Functions

Departmental authority must be distinguished from NERSA’s statutory regulatory jurisdiction. NERSA has powers concerning electricity licences, licence conditions, tariff methodologies and permitted electricity charges. In NERSA v Borbet SA, the Supreme Court of Appeal confirmed that NERSA determines whether licences should be granted, applicable licence conditions and methodologies governing tariffs.

Accordingly, ministerial policy authority cannot simply replace a decision that legislation expressly entrusts to an independent statutory regulator.

Case Law: Earthlife Africa Johannesburg v Minister of Energy

Case Name/Citation: Earthlife Africa Johannesburg and Another v Minister of Energy and Others [2017] ZAWCHC 50; 2017 (5) SA 227 (WCC).

Facts: The applicants challenged governmental decisions connected with South Africa’s proposed nuclear-energy procurement programme, including ministerial determinations and international nuclear cooperation arrangements.

Legal Issue: Whether executive decisions concerning major energy procurement had been taken lawfully, rationally and in compliance with applicable statutory and constitutional requirements.

Judgment: The Western Cape High Court reviewed and set aside significant components of the nuclear procurement process.

Legal Principle/Ratio: Even where legislation grants broad energy-policy and procurement powers, those powers remain subject to the Constitution, enabling legislation, procedural requirements and rationality review.

Significance: The case demonstrates that the Department and Minister cannot rely on energy-security objectives alone. Major generation and procurement decisions must be exercised within lawful statutory procedures.

Case Law: NERSA v Borbet SA

Case Name/Citation: National Energy Regulator of South Africa v Borbet SA (Pty) Ltd [2017] ZASCA 87.

Facts: Industrial electricity customers challenged tariff-related decisions involving NERSA and Eskom.

Legal Issue: Which institution possesses legal authority over electricity tariffs and tariff methodologies.

Judgment: The Supreme Court of Appeal explained that NERSA regulates tariffs through statutory licensing powers and associated licence conditions.

Legal Principle/Ratio: Regulatory powers must be exercised by the institution to which Parliament has assigned them.

Significance: The Department may formulate policy, but it cannot unlawfully assume NERSA’s independent tariff-setting jurisdiction.

Case Law: Pine Glow Investments v Minister of Energy

Case Name/Citation: Pine Glow Investments (Pty) Ltd v Minister of Energy and Others [2023] ZAMPMBHC 50.

Facts: The dispute concerned petroleum licensing decisions and ministerial intervention in decisions assigned by statute to the Controller.

Legal Issue: Whether the Minister could substitute or effectively reconsider licensing decisions entrusted to another statutory decision-maker.

Judgment: The Court held that the Minister did not possess authority to issue the licences himself where the statute assigned that function to the Controller.

Legal Principle/Ratio: Executive authority cannot exceed powers expressly or impliedly granted by legislation.

Significance: The principle applies broadly to energy governance: departmental oversight does not permit the Minister to usurp powers conferred on NERSA or another regulator.

Conclusion

The Department of Electricity and Energy exercises extensive powers over energy policy, national planning, security of supply, new-generation determinations, procurement frameworks and legislative development. Nevertheless, these powers operate alongside independent regulatory bodies such as NERSA. South African case law confirms that energy regulation remains subject to legality, rationality, procedural fairness, statutory limits and constitutional review, ensuring that departmental power is substantial but never unlimited.