NERSA's Revised Bilateral Trading Rules Close for Comment on 23 May: What the Non-Bypassable Charge Structure and Six-Year Volume Glide Path Mean for C&I Wheeling Contracts Signed Today

The Clock Is Ticking: NERSA's Revised Bilateral Trading Rules Close for Comment on 23 May 2026

South Africa's commercial and industrial (C&I) energy sector has four days left to shape the rules that will govern wheeled electricity for the next decade. NERSA has published its revised draft Trading Rules for the bilateral trading market (Version 01, dated 12 April 2026) together with a consultation paper inviting stakeholder comment by 23 May 2026. For any business that has signed — or is considering signing — a wheeling power purchase agreement (PPA) today, the implications are profound and immediate.

How We Got Here: A Turbulent Regulatory Journey

This is the second round of consultation, following the initial draft published in November 2025 and the subsequent public hearings in January 2026 at which Eskom raised significant objections. The process has been anything but smooth. On 24 July 2025, Eskom initiated application proceedings in the High Court seeking to review and set aside NERSA's decision to grant five electricity trading licences, namely those issued to Green Electron Market, CBI Electric Apollo, GreenCo Power Services, Discovery Green, and NOA Group Trading.

Following a period of constructive engagement, the parties jointly agreed to stay the review application — not withdraw it — as a procedural measure pending the finalisation of the applicable regulatory framework. The legal sword, in other words, remains drawn. Industry participants should understand that the rules now out for comment are being written in the shadow of active litigation.

The Four-Phase Framework and Who It Covers

The revised rules run to 44 pages and set out a four-phase framework for the transition to retail electricity competition. Critically, the reach of these rules is broader than many C&I customers realise. The rules apply to all licensed traders, all network service providers (NSPs) operating under distribution licences, all retailers operating under distribution licences, and — critically — all generators of capacity greater than 100 kW that are registered with NERSA and involved in bilateral agreements supplying wheeled energy to consumers, whether directly or via traders.

In plain terms: if your business has a direct wheeling PPA with an IPP, these rules apply to you just as much as they apply to a licensed trader. An IPP with a direct wheeling PPA to a customer faces the same volume restrictions, the same contestable customer thresholds, the same non-bypassable charge (NBC) framework, and the same reconciliation and reporting obligations as a licensed trader.

The Non-Bypassable Charge: Understanding What You Will Always Pay

The most consequential structural element for C&I wheeling customers is the non-bypassable charge (NBC). Subsidies and surcharges will be embedded in retail tariffs and recovered through a non-bypassable charge applied uniformly to all demand-side customers, ensuring fairness and preventing cross-subsidisation.

The scope of what is classified as "non-bypassable" is vast. Clause 9.16 designates the following categories as recoverable through NBCs: all network costs; legacy REIPPP programme costs for the duration of existing contracts; ancillary services costs; generation capacity costs; government-mandated social obligation subsidies (including lifeline tariffs, cross-subsidies, electrification, and new connections for poor households); Negotiated Pricing Agreement subsidies for energy-intensive, trade-exposed industrial customers; and the NERSA regulatory levy.

These categories, taken together, cover virtually every significant cost component in the electricity supply chain. The energy component — which is the only portion a third-party supplier can displace — represents a diminishing share of the total customer bill as NBCs increase. This structurally limits the value proposition for competitive supply.

For C&I customers evaluating the economics of a wheeling contract signed today, the NBC framework means the competitive saving is carved out of an increasingly narrow energy-only slice of your total bill. The ANBC tariff structure proposed in the rules is reported to cap competitive headroom at approximately one-third of the total bill — a critical data point when stress-testing the financial case for a 15- or 20-year PPA.

The Six-Year Volume Glide Path: Patience Required

The second major variable for C&I wheeling is the volume glide path — the phased schedule by which customers are permitted to source an increasing proportion of their energy from third-party suppliers. The consultation paper provides no quantitative basis for the specific pace of the glide path, and the starting point of 20% for two full years is conservative by any international comparison.

A six-year volume glide path, a decade-plus timeline to full retail competition, NBCs covering the full cost stack, and an ANBC tariff that caps competitive headroom do not suggest a framework designed for rapid market opening. Businesses signing wheeling contracts today must model scenarios in which the volume they can competitively source remains constrained for the first two years and only incrementally expands thereafter. Contracts structured around an assumption of 100% third-party supply from day one will face regulatory headwinds.

Phase 1 and the High-Voltage Access Problem

The initial phase of the framework presents an additional access challenge for medium-voltage C&I customers. Phase 1 allows transmission and high-voltage customers to source part of their energy from traders, while managing risks associated with early market opening and metering readiness for smaller customers. This effectively means that factories, retail parks, and commercial buildings connected to medium-voltage distribution networks may be excluded from early market participation for an undefined period — a concern raised vocally by industry bodies including the Junior Mining Council.

The Junior Mining Council raised concerns about the financial impact of standby, top-up supply, and back-up capacity charges imposed by NSPs, warning that poorly defined or non-transparent tariffs could be used to cross-subsidise other network costs. The Council called on NERSA to introduce a transparent and standardised methodology for calculating non-bypassable charges to prevent arbitrary or punitive pricing.

The Bigger Policy Debate: Market Reform or Market Containment?

Industry commentators are divided on what the revised rules represent. Many see the framework as overly cautious — a system of volume caps, delayed market access, and non-bypassable charges aimed at protecting incumbents rather than unlocking competition. Others argue that the incumbent's position is at least understandable: a utility carrying legacy debt, social obligations, ageing infrastructure, and a declining sales base will naturally prioritise revenue stability during transition, and no responsible operator would accelerate structural risk without a plan to manage it.

The emerging consensus from industry voices is a call for a "co-investment" model. South Africa cannot regulate from scarcity alone. The rules need to distinguish between speculative bypass and productive partnership. The country does not need private investment that extracts value from the grid — it needs investment that shares risk, builds infrastructure, supports weak nodes, and stabilises the system alongside Eskom.

What C&I Buyers and Their Advisers Should Do Right Now

The consultation paper asks 19 questions across eligibility criteria, volume restrictions, the ANBC tariff, wheeling arrangements, and reporting requirements. With the comment window closing on 23 May 2026, this is your last opportunity to influence the final rules before gazetting — currently anticipated for June 2026.

• Review your PPA term and volume assumptions. Model your contract financials under scenarios of 20%, 40%, 60%, and 80% third-party supply to stress-test returns against the glide path.
• Understand your NBC exposure. Request from your energy advisor a bill unbundling that separates the energy-only component from network, legacy, and social-obligation costs. Only the energy component is contestable.
• Check your voltage connection level. If you are on a medium-voltage network, Phase 1 access may be delayed — factor this into the timeline for any new wheeling contract.
• Submit your stakeholder comments. These rules deserve serious scrutiny from the entire electricity supply industry — not just licensed traders, but every IPP with a wheeling contract, every aggregator, and every customer with embedded generation, because these rules apply to all of them.
• Watch the Eskom litigation status. The rules arrive in the context of Eskom's court challenge to the five trading licences granted by NERSA in 2025 — a challenge that was stayed, not withdrawn. The finalisation of the regulatory framework will be the trigger for Eskom's next legal move.

The SolarXgen View

The revised bilateral trading rules represent the most consequential regulatory development for C&I wheeling since the lifting of the generation licensing threshold in 2021. The NBC structure and six-year volume glide path will require that every wheeling contract signed from today accounts for a constrained, phased ramp-up of competitive supply — not an immediate, full displacement of grid power. The economics still work, but the modelling must be done correctly.

SolarXgen is actively engaging with the consultation process and advising C&I clients on contract structures that are resilient under the proposed framework. Contact our energy advisory team before 23 May to align your current or planned wheeling PPA with the regulatory reality.