Electricity Distribution Industry Restructuring, Electrification, and Competition in South Africa

A variety of proposals for restructuring the South African electricity supply industry have been examined since 1992. The most specific and important involve electricity distribution. The one that has emerged calls for consolidating Eskom's distribution component with the nearly 400 municipal electricity distributors into 5 to 17 regional electricity distributors (REDs). The number andconfiguration of these REDs will be primarily determined by the financial viability of the RED once it is formed, and thus its ability to provide a reliable, reasonably priced service and undertake needed electrification efforts. Since electrification has not been, and is not expected to be, self-sustaining and self-financing, an infusion of monies raised from a tax of some type will be provided.