Instead, MPs endorsed the original model of establishing six regional electricity distributors (REDs). The decision is a significant one, coming ahead of a final cabinet decision on the ultimate structure of electricity distribution in the country.

The committee was dominated by African National Congress (ANC) MPs and chaired by that party's Nkosinathi Mthethwa.

Its move has echoed the robustly independent stance it has taken on other matters. In May, the committee expressed anger when it heard that, without the plan being properly tested, the cabinet had decided to have seven REDs.

"Does this mean all our work has been shortchanged?" Mthethwa asked at the time.

She also demanded to know who had advised the cabinet to change the plan to have six REDs anchored by the six metropolitan councils, which would cross- subsidise poorer municipalities.

The committee has held further public hearings on the proposal, taking submissions from trade unions, municipalities, metropolitan councils, Eskom and the National Energy Regulator for SA. It then formulated its position in a report, which was adopted at its meeting yesterday.

"The committee does not favour the 'national' seventh RED option," the report said.

The committee argued that the hearings had not yielded any convincing argument to establish a seventh RED or shown that it would be financially viable.

The report called for the electricity distribution restructuring process to be accelerated.

It opposed any further delay by the introduction of new models that would require more time and financial resources.

These resources should be spent on ensuring the six-RED model was viable.

The committee said it believed a wall-to-wall six-RED model would achieve government's objectives to provide low-cost, reliable electricity to all consumers, with equitable tariffs.

"The committee fails to understand how the proposed national RED can address these objectives in the absence of any evaluation which might prove the six-RED model ineffective," the report said.

The committee found it problematic that municipalities could be given the choice to join the national or the metropolitan REDs.

The committee also called on the national treasury to finalise the process of providing "clear policy guidelines" for the transfer of assets from Eskom to municipalities, and for the department to provide clarity on problems such as reticulation, competition and contestable customers.

Most metropolitan councils have expressed preference for metropolitan REDs supported by a national RED, with conditions.

Business said it could live with any model provided that safety, quality and reliability of supply would maintain South African companies' competitiveness on the export market.

Business Day     AllAfrica.com