Committee Report on Energy 2014 Budget; Second Term Committee Programme

Meeting report

Opening remarks & Apologies
The Chairperson apologised to Members that the meeting had started late.

Ms Z Faku (ANC) explained that for the duration of the meeting Ms L Makhubele-Mashele (ANC) would be replaced by Ms T Qikane (ANC) and Ms T Mahembehlala (ANC) would be replaced by Mr Makhonto (ANC).

Consideration and adoption of Committee Budget Vote Report

The Chairperson said Members had received the Report the previous day therefore it was expected that they had all gone through the document. He suggested that the Report be looked at page by page so that Members could highlight any matters they felt needed to be addressed.

Mr L Greyling (DA) suggested that a disclaimer be put in that because of the strict timelines, the whole budget process was rushed. Members were not even able to pose questions to the various entities during their presentations and this was a major problem. Members were therefore not able to do a proper interrogation of the information put before them. The Committee was however committed to interrogating the entities at a later stage.

Ms T Qikane (ANC) responded that the process of Members going through the Report page by page before adoption would not be rushed.

Mr Greyling corrected Ms Qikane and explained that he was not referring to the current Committee meeting but rather the entire process of interrogating the budget, the entities and the Annual Performance Plan were rushed because all of these were done in a space of one day and this needed to be mentioned as a disclaimer in the Committee Budget Report. The timelines were constrained because of the recent elections.

The Chairperson asked what the implication of the disclaimer was.

Mr Greyling responded that generally the Committee would have longer times allocated for them to sit with the entities asking questions and going through their annual reports. However, this did not happen because of the election and therefore mention needed to be made that the process was very rushed in order to protect Members. There were clearly still a lot of issues which the Committee wanted to unpack with the entities but this would be done at a later stage. The Committee Budget Vote would be approved though regardless.

Ms N Louw (EFF) asked about how big the possibility was that the entities would be able to come back to the Committee for interrogation. She reminded Members that some of the entities during the meeting had suggested that Members email their questions and the entities would respond to the Committee in writing.

The Chairperson assured Ms Louw that the entities would be coming back to the Committee and their reports would be interrogated by Members. He acknowledged Mr Greyling’s suggestion and suggested that Members continue going through the Report page by page.

Mr M Mackay (DA) said it was a concern that the last meeting’s minutes did not reflect the Minister’s pronouncement that the Department of Energy (DoEs) objectives be aligned with the National Development Plan (NDP). He argued that it was a great concern that there was no mention of the NDP throughout the Report. This was a large oversight and the Minister’s comments needed to be adequately captured.

The Chairperson said the NDP was an overarching policy from government and there was therefore no need to include it in the Committee’s Budget Vote Report.

Mr Mackay referred to the minutes of 1 July 2014 and said the Minister’s comments on the NDP had been captured and because the NDP was an overarching policy of government, it was expected that mention would be made to it in the Report.

Ms Faku said the Committee was not considering minutes so it was confusing that Mr Mackay was referring to previous Committee minutes. The NDP was a vision from government and there was therefore no need to make mention of it every time. She said the African National Congress (ANC) had also considered the Report and filed it. However, the party agreed that the process was rushed and there had not been enough time for Members to adequately engage entities. 2014 was a short year because of the recent elections. She suggested that because of time constraints the Committee abandon the page by page process and that any issues which opposition Members had be dealt with separately.

Mr M Matlala (ANC) agreed with Ms Faku that Members be given enough time to go through the Report on their own. Going through the Report again page by page was a waste of time.

The Chairperson agreed that Members needed to move faster in the adoption of the Report. The Minister’s mention of the NDP appeared in the Committee minutes of 1 July 2014. Members were asked to deal with what was currently reflected in the Report.

Mr Greyling said the Committee Budget Vote Report needed to accurately reflect everything which took place in the meeting, together with the government priorities outlined by the Minister. The fact that the NDP would be one of the DoE’s focus point moving forward needed to be reflected under the Reports “Key focus areas 2014/15”. This was not a controversial statement to make. He acknowledged that there was a rush to adopt the Report; however the Committee had a responsibility to do its work properly. Members would be held accountable for the work by their respective parties.

The Chairperson asked whether Members agreed with the suggestion that the Report needed to reflect the Minister’s comments on the NDP.

Ms Qikane said there was no objection.

Ms Faku said the minutes of 1 July 2014 reflected everything which was said during the meeting, including the Minister’s comments around the NDP. She objected to including the Minister’s comments on the NDP in the Committee Budget Vote Report.

Mr R Mavunda (ANC) said the whole agenda of development was in line with the NDP, it would therefore be rhetoric to mention the NDP at all times. It was not necessary to include the Minister’s comments in the Report.

Mr Mackay insisted on adding the Minister’s comments in the Repor. The Minister made the comment in her submission to the Committee and the Report therefore needed to accurately reflect what happened on the day. The Minister specifically said the DoE would align its objectives with the NDP. Adding a line to the Report was not an unreasonable amendment. If Members needed to take a few minutes to call Luthuli House before deciding on the matter they should be allowed to do that.

Mr Greyling said there were a number of recommendations which the Committee made to the Minister. One of the recommendations was around the restructuring of the electricity industry and developing an end state vision for the electricity industry. This needed to be reflected in the Report as it was critical to the work which the Committee would be doing for the next five years. This would enable the Committee to be able to evaluate the DoE’s legislative framework better.

Ms Faku asked for clarity on what the restructuring of the electricity sector meant.

Mr Greyling explained that electricity restructuring was about looking at the current industry structure (generation, transmission and distribution), and agreeing that the current institutional arrangements were not producing the desired outcomes. Therefore the DoE needed to come with a vision of how it would ultimately restructure the industry across all the three sectors. This would give the Committee a better idea of where the sector was headed over the next five years.

Ms Faku said there was no objection to including that recommendation.

The Chairperson said it was important for the Committee to understand what the difference would be between the proposed end-state vision and the Integrated Energy Plan (IEP) and the Integrated Resource Plan (IRP). Would this be new plan which would encompass all the existing plans? Would it be a five year plan or would it be longer than five years?

Mr Greyling explained that the IEP and the IRP were essentially talking to the country’s energy mix for the next 20 years. The end-state vision was focused around the institutional framework in which all these occurred and how the country restructured the current institutional arrangement to get the best outcome from the energy mix. There was a serious crisis at distribution level pertaining to the current institutional arrangement.

The Chairperson thanked Mr Greyling for the explanation and said the recommendation would be included in the Report. On the disclaimer he agreed that the entities could not be sufficiently engaged due to time constraints. It would not be a problem for the Committee to agree to insert the Minister’s comments on the NDP, the matter was not controversial.

Mr Greyling asked whether a recommendation could not be inserted that the Minister provides the Committee with a report indicating how the DoE would be aligning its objectives with the NDP.

The Chairperson asked Mr Greyling not to push the boundaries.

Ms Louw said the EFF could not adopt the Report. The allocation requested by the DoE would not sort out the electrification backlogs among poor communities. The DoE needed to be called back to further explain themselves to the Committee.

The Chairperson referred Ms Louw to the first recommendation made by the Committee to the DoE, which spoke to the issues which Ms Louw was concerned about. The DoE would definitely come back to the Committee to speak to the issues around electrification.

Ms Faku moved for the adoption of the Report.

Mr Mavunda seconded the adoption of the Report.

The Committee Budget Vote Report was adopted.

2^nd Term Committee programme
The Chairperson said the programme was not a controversial matter. He asked whether there were any changes Members wanted to make.

Mr Greyling asked whether any timelines had been given to the Committee around legislation such as the National Energy Regulation Act (NERA), Electricity Regulation Act (ERA) and the Independent System and Market Operator (ISMO).

The Chairperson said it was important for the Committee to know what the DoE’s intentions were with regard to legislation. The Committee did not have these timelines and the Committee would be communicating with the DoE in this regard.

Mr Greyling asked whether suggestions from Members around what could form part of the programme were welcomed for the next term.

Ms Louw asked when the Committee would be undertaking their site visits.

The Chairperson asked that the Committee Secretary provide clarity on the issue of site visits.

Mr Arico Kotze, Committee Secretary said according to the framework for the 2^nd Term, no provision was made for Committees to meet; therefore this time was used for Committee oversight work.

The Chairperson agreed with Ms Louw that there was a need for oversight work, and this would be taken into consideration during the 2^nd Term.

Mr Matlala moved for the adoption of the Committee programme.

Ms Faku seconded the adoption.

The Committee programme for the 2^nd Term was adopted.

Adoption of Committee Minutes

24 June 2014

Ms Faku moved for the adoption of the minutes.

Mr Greyling seconded the adoption.

The minutes were adopted without any amendments.

1 July 2014

The Chairperson asked that the end time for the meeting be changed from (am) to (pm)

Mr Matlala moved for the adoption of the minutes.

Ms Faku seconded the adoption.

The minutes were adopted with the amendments.

Mr Mackay said the Central Energy Fund gave the Committee a total estimate of the budget and there was no breakdown given for how the money would be allocated among the different entities within the CEF. The budgets for the individual agencies needed to be made available to the Committee. He said the DoE had been appallingly bad in responding to parliamentary questions in writing. The ruling was that a department needed to respond to written questions within 10 days. He also raised a concern around documents which were distributed to Members late and this was not acceptable. Documents needed to be distributed at least three days before a meeting.

Mr Esteerhuizen agreed that documents needed to be made available to Members 72 hours before a meeting.

The Chairperson agreed with Members and asked the Committee Secretary to take note.

Mr Greyling said the problems with the late documents were not so much with the Committee Secretary but rather with the various entities and this was an on-going problem.

The Chairperson said the Committee needed to get tough, and everyone was expected to play their part. The Committee would follow up with the DoE about Members’ questions.  The Committee would communicate with the CEF and feedback would be provided to Members before the next sitting.

Mr Mackay asked that the Chairperson push to get the budget breakdown of the CEF before the DoE’s budget debate.

The Chairperson agreed.

The meeting was adjourned.