NON-DISCRIMINATORY ACCESS OBLIGATIONS FOR NETWORKS

1. Introduction

Non-discriminatory network access requires electricity transmission and distribution network operators to provide eligible users with access on objective, transparent and equitable terms, rather than favouring particular generators, traders, customers or affiliated businesses. It is fundamental to electricity-market liberalisation because competition cannot function where one undertaking controls an essential network and can selectively exclude competitors.

In South Africa, these obligations have become increasingly important as the electricity sector moves from a predominantly vertically integrated structure toward independent generation, electricity trading, wheeling and competitive market participation.

2. Electricity Regulation Act Framework

The Electricity Regulation Act 4 of 2006 (ERA) historically provided in section 21 that transmission and distribution licensees must, to the extent provided in their licences, give third parties non-discriminatory access to transmission and distribution power systems.

The framework was substantially strengthened by the Electricity Regulation Amendment Act 38 of 2024, which commenced on 1 January 2025. The reforms establish the framework for an open electricity-market platform and a Transmission System Operator.

The amended legislation requires transmission-system functions to be exercised independently and with fair and equitable treatment of system users. The reforms also require transmission and distribution access to operate objectively, transparently and without discrimination.

3. Meaning of Non-Discrimination

Non-discrimination does not necessarily mean that every network user must receive identical treatment. Differences may legitimately arise because of connection voltage, location, network capacity, congestion, technical requirements, system-security considerations or objectively calculated costs.

The essential requirement is that comparable users should not receive different treatment without an objectively justifiable regulatory basis.

For example, a network operator controlling transmission infrastructure should not give preferential connection or dispatch treatment to its affiliated generator simply because of corporate relationships.

4. Wheeling and Network Charges

The principle is particularly important for electricity wheeling, where electricity produced by an independent generator travels across existing networks to another customer.

NERSA's electricity pricing framework provides that licensees must offer non-discriminatory grid access and that network-use charges should generally operate independently of the identity of the electricity supplier or purchaser. A customer purchasing wheeled electricity therefore remains responsible for applicable network charges.

This prevents network ownership from becoming an artificial barrier to independent electricity transactions.

5. Case Law – Rademan v Moqhaka Local Municipality

Case Name/Citation: Rademan v Moqhaka Local Municipality and Others 2013 (4) SA 225 (CC).

Facts: A municipal consumer disputed the termination of electricity services after withholding payment of certain municipal charges.

Legal Issue: The litigation concerned municipal authority over electricity services and the relationship between electricity regulation and municipal credit-control powers.

Judgment: The litigation examined ERA's statutory network and supply framework, including section 21's provisions concerning transmission and distribution licensees.

Legal Principle/Ratio Decidendi: Electricity network rights operate within a broader system of licensing, municipal authority and statutory conditions, rather than constituting unlimited private access rights.

Significance: Non-discriminatory access must therefore be understood together with legitimate licence conditions and lawful network-management requirements.

6. Case Law – Competition Commission v Telkom SA Ltd

Case Name/Citation: Competition Commission of South Africa v Telkom SA Ltd and Others [2009] ZASCA 155.

Facts: Telkom controlled telecommunications backbone and access facilities required by competing downstream service providers. Allegations arose that its control over those facilities could be used to disadvantage competitors.

Legal Issue: The proceedings concerned the interaction between sector-specific regulation and competition-law jurisdiction.

Judgment: The Supreme Court of Appeal addressed the institutional relationship between competition regulation and sectoral regulation.

Legal Principle/Ratio Decidendi: Control over indispensable network infrastructure can raise both sector-regulatory and competition-law concerns.

Significance: Although involving telecommunications rather than electricity, the case is highly instructive for electricity networks: an incumbent controlling essential infrastructure may possess the ability to distort downstream competition through discriminatory access practices.

7. Case Law – Eskom v Sonae Arauco

Case Name/Citation: Eskom Holdings SOC Ltd v Sonae Arauco (Pty) Ltd [2024] ZASCA 177.

Facts: The dispute involved Eskom's electricity-supply obligations and the regulatory framework governing system operation.

Legal Issue: The Court considered ERA licensing obligations and the regulatory codes governing transmission and distribution systems.

Judgment: The Supreme Court of Appeal confirmed that licence conditions and NERSA-approved codes impose legally significant operational obligations upon electricity licensees.

Legal Principle/Ratio Decidendi: Network operators must exercise their statutory powers consistently with their licences and binding regulatory codes.

Significance: Non-discrimination is therefore not merely a competition-policy aspiration; it operates within an enforceable regulatory framework.

8. Conclusion

Non-discriminatory access is essential to South Africa's emerging competitive electricity market. It requires transparent connection procedures, objective network charges, equitable treatment, independent system operation and justified access restrictions. Together, ERA reforms, NERSA regulation and competition-law principles seek to prevent network control from becoming a mechanism for market exclusion while preserving legitimate requirements of grid security and reliability.