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Electricity Regulation Act, 2006 (Act No. 4 of 2006)


Regulatory Rules for Power Purchase Cost Recovery

10. Exclusions to the authorisation process


10.1        Vested PPAs


(a) Under provisions of the Act the Minister, in consultation with the Energy Regulator, may prescribe provisions for power purchase and vest these by way of assignment of a PPA to Eskom as off-taker. PPAs vested with Eskom as a result of Ministerial directive would automatically be deemed as authorised for the purposes of these rules, and not subject to the process of authorisation set out for non-vested PPAs set out in rule 9.1;
(b) By way of example, such projects might be initiated by the Minister having regard to additional policy aims and not fit squarely within the defined assessment criteria set out in these rules for cost recovery. In this case, the assessment criteria applied to non-vested PPAs would not be applied. As an authorised PPA, cost would be passed through (subject to the other conditions set out in these rules); and
(c) In terms of the Act, the Minister, in consultation with NERSA, may determine that new generation capacity is needed to ensure the security of supply. In such events, NERSA is bound by that determination to issue a generation licence and is authorised to facilitate the conclusion of an agreement between a seller and purchaser of the power.


NERSA shall allow the costs of such PPA as a full pass-through.