Buffalo City Municipality has become the first municipal entity in the Eastern Cape to sign the Cooperative Agreement - a document which sets out the framework for the restructuring of the electricity distribution industry.

The decision to sign the agreement was ratified by the council and signed by municipal manager Mxolisi Tsika recently.

As one of the largest distributors of electricity in the province, Buffalo City Municipality's accession of the agreement is considered to be a significant milestone in the establishment of a single electricity distributor for the Eastern Cape.

It follows the recent re-affirmation of the restructuring process by the South African Local Government Association at a specially convened meeting in Port Elizabeth on October 20.

According to legislation, the 43 municipalities and Eskom, currently licensed to distribute and sell electricity to consumers in the large geographical area comprising the broader Eastern Cape, would merge into a single entity, provisionally called RED Three.

The Electricity Distribution Industry Holdings was established in March 2003 by the Department of Minerals and Energy, for the sole purpose of facilitating the restructure in accordance with the requirement of the Energy White paper and subsequent Cabinet endorsements.

EDI Holdings has appointed former Eskom senior manager Nigel Waters as regional general manager for the Eastern Cape.

Waters is tasked with working with the distribution businesses to reach an optimal system for a single RED.

The formation of the REDs would eliminate varying levels of tariffs and standards of supply reliability and service across the country, he said.