High Court elects not to rule on local government’s constitutional power to buy electricity

12 August 2020 

The City of Cape Town maintains that local governments have the constitutional power to procure renewable energy, and will keep standing up for the rights of our residents to live in a more energy secure and future fit city.

We are assessing all available options following the North Gauteng High Court electing not to rule on the merits of our application challenging the applicability and constitutionality of the requirement in Section 34 of the Electricity Regulation Act that a ministerial determination is necessary before power may be procured from independent power producers.

The City argues that approval from the Minister of Energy is not required to procure electricity from Independent Power Producers (IPP).

In particular, we believe the Constitutional obligation of municipalities to provide sustainable services supersedes Section 34 of the Electricity Regulation Act, and that this provision cannot obstruct a municipality’s obligation to provide the basic service of electricity to residents.

In particular, we believe the Constitution supersedes Section 34 of the Electricity Regulation Act, and that this provision cannot obstruct a municipality’s obligation to provide the basic service of electricity to residents.

We are disappointed that the court elected not to rule on the merits of this matter, but instead refer the parties to Intergovernmental Dispute mechanisms for possible resolution.

For five long years, the Energy Minister has failed to provide approval for Cape Town’s request to procure up to 30% of its power from IPPs.

The City in 2017 sought a declaratory order from the North Gauteng High Court, having received no response from both the Minister and the National Energy Regulator (NERSA) for some years.

The President, national government and the ruling ANC have all failed to create an energy secure country, and have placed us all at risk through Eskom’s crumbling monopoly.

We will keep standing up for residents and businesses whose livelihoods depend on a reliable energy supply.

We will keep fighting for a more sustainable, climate-wise future, and residents can take heart that this journey continues toward the future that we want in Cape Town.

To this end, we are engaging National Treasury on a Cape Town Integrated Resource Plan and our intention to establish a City Independent Power Purchase office. Recently, the City transferred a R54 million property for the development of the Atlantis Special Economic Zone (SEZ), a central development in our growth as a greentech capital.

Issued by Greg Wagner, Spokesperson to the Executive Mayor, 12 August 2020