nersa strategic plan (2012/13 – 2016/17) and annual performance plan (2013/14 – 2015/16)

NERSA Strategic Plan (2012/13 – 2016/17) and Annual Performance Plan (2013/14 – 2015/16)

23 April 2013

CONTENT (1)A. IntroductionB. Framework for Strategic Plans and Annual Performance

PlansC. Planning ConceptsD. Vision, Mission, Values and Regulatory PrinciplesE. MandateF. Achievements (2012/13)

I. Electricity Industry RegulationII. Piped-Gas Industry RegulationIII. Petroleum Pipelines Industry Regulation

CONTENT (2)G. Strategic Plan (2012/13 – 2016/17)

I. Strategic Outcome Oriented GoalsII. Contribution to Service delivery through the link to Twelve

Government OutcomesIII. Compliance with other Government StrategiesIV. Strategic ObjectivesV. ProgrammesVI. Programme Strategic Objectives

H. Challenges, NERSA’s Response and Link to ProgrammesI. Electricity Industry RegulationII. Piped-Gas Industry RegulationIII. Petroleum Pipelines Industry RegulationIV. Cross-Cutting RegulatoryV. Organisational

CONTENT (3)

I. Annual Performance Plan (2013/14 – 2015/16)I. Electricity Industry RegulationII. Piped-Gas Industry RegulationIII. Petroleum Pipelines Industry RegulationIV. Cross-Cutting RegulationV. Organisational

J. Budget and Funding (2013/14)I. Ring-fencing MethodologyII. Budget and Funding (2013/14)III. Programme Budgets (2013/14)

K. Conclusion

A. INTRODUCTION

INTRODUCTION• The National Energy Regulator (NERSA), a Schedule 3A

Public Finance Management Act, 1999 (Act No. 1 of 1999) Public Entity was established on 1 October 2005 in terms of the National Energy Regulator Act, 2004 (Act No. 40 of 2004) to regulate:o Electricity industry (Electricity Regulation Act, 2006 (Act No. 4 of

2006))o Piped-Gas industry (Gas Act, 2001 (Act No. 48 of 2001))o Petroleum Pipelines industry (Petroleum Pipelines Act, 2003 (Act

No. 60 of 2003))• In executing its mandate NERSA endeavours to balance the

interest of both licensed entities and end users/consumers

B. FRAMEWORK FOR STRATEGIC PLANS AND ANNUAL PERFORMANCE

FRAMEWORK FOR STRATEGIC PLANS AND ANNUAL PERFORMANCE PLANS (1)

• Published by National Treasury in August 2010• Applicable to all national and provincial departments,

constitutional institutions and public entities in the development of their strategic plans

• Applicable from 2012/13 for Schedule 3A Public Entities• NERSA is required to:

o Produce and table a Strategic Plan with a five-year planning horizon;o Produce and table an Annual Performance Plan including forward

projections for a further two years, with annual and performance targets, where appropriate; and

o Identify a core set of indicators needed to monitor institutional performance.

FRAMEWORK FOR STRATEGIC PLANS AND ANNUAL PERFORMANCE PLANS (2)

• In line with the Framework NERSA published a Strategic Plan (2012/13 – 2016/17)

• According to the Framework a “Strategic Plan may be changed during the five-year period that it covers. However, such changes should be limited to revisions related to significant policy shifts or changes in the service-delivery environment”

• Upon revision it was found:o There were no significant policy shifts or changes; ando There were no significant gaps in the approved Strategic Plan.

• Strategic Plan was not amended.

C. PLANNING CONCEPTS

PLANNING CONCEPTS

D. MISSION, VISION, VALUES AND

REGULATORY PRINCIPLES

VISION

“To be a world-class leader in energy regulation”

MISSION

“To regulate the energy industry in accordance with government laws and policies, standards and international best practices in support of sustainable development”

VALUES

• Passion • Spirit of Partnership • Excellence • Innovation • Integrity • Responsibility • Professionalism

REGULATORY PRINCIPLES

Underpinned by NERSA’s legal mandate • Transparency • Neutrality • Consistency and Predictability• Independence • Accountability • Integrity• Efficiency

E. MANDATE

MANDATE (1)

NERSA’s Mandate is anchored in: • 4 Primary Acts:o National Energy Regulator Act, 2004 (Act No. 40 of 2004)o Electricity Regulation Act, 2006 (Act No. 4 of 2006)o Gas Act, 2001 (Act No. 48 of 2001) o Petroleum Pipelines Act, 2003 (Act No. 60 of 2003)

• 3 Levies Acts:o Gas Regulator Levies Act, 2002 (Act No. 75 of 2002)o Petroleum Pipelines Levies Act, 2004 (Act No. 28 of 2004) o Section 5B of the Electricity Act, 1987 (Act No. 41 of 1987)

MANDATE (2)

• 3 Facilitating Acts:o Public Finance Management Act, 1999 (Act No. 1 of 1999)

(PFMA)o Promotion of Access to Information Act, 2000 (Act No. 2 of 2000)

(PAIA)o Promotion of Administrative Justice Act, 2000 (Act No. 3 of 2000)

(PAJA)

F. ACHIEVEMENTS (2012/13)

I. ELECTRICITY INDUSTRY REGULATION• Tariffso Approved an average annual increase of 8% in the revenue requirements for

Eskom for the next five years; ando Received 183 out of 186 (98%) municipal and private distributor tariffs

applications for 2012/13 and approved all for implementation.• Generationo Approved 47 Renewable Energy Generation licences (within 90 days from

application instead of the 120 days legislated timeframe); ando Approved 7 licences under the Short Term Power Purchase Programme

(STPPP) as part of the short term mitigation programme during maintenance of Eskom generation fleet.

• Distributiono 9 distribution licences were issued for connection facilities between the Eskom

delivery point and IPP generation facilities.• Othero Assessed and concurred with three determinations of the Minister of Energy in

terms of Section 34 of the Electricity Regulation Act, 2006 (Act No. 40 of 2006).

II. PIPED-GAS INDUSTRY REGULATION• Pricing and Tariffs

o Approved the maximum prices of piped-gas for Sasol Gas in terms of section 21(1)(p) of the Gas Act, (Act No. 48 of 2001), for the period 26 March 2014 to 30 June 2017 for various customer categories / classes;

o Approved the transmission tariffs for Sasol Gas in terms of section 4(h) of Gas Act, (Act No. 48 of 2001), for the period 26 March 2014 to 30 June 2015; and

o Approved preliminary tariff assessment for Transnet Pipelines’ gas multi-year tariff determination for the Lilly Pipeline for the periods 2013/14, 2014/15 and 2015/16.

• Licensingo Granting of 5 licences for the construction of gas distribution facilities,

2 licences for trading in gas and 1 licence for the operation of a gas facility; and

o Amending 5 gas trading licences and 5 licences for the operation of gas facilities.

III. PETROLEUM PIPELINES INDUSTRY REGULATION

• Tariffso Approved an increase of 8.53% in allowable revenue for Transnet

Petroleum Pipelines for the period 2013/14; ando Made decisions on 60 storage and loading facilities.

• Licensingo Approved 8 construction licences and 3 operation licences; o Amended 7 construction and storage licences; ando Revoked 13 storage licences.

• Othero Investigated 67 suspected unlicensed activities – only 4 of these do

not require a licence. All the others indicated that they will apply for a licence

G. STRATEGIC PLAN (2012/13 – 2016/17)

I. STRATEGIC OUTCOME ORIENTED GOALS (1)

• The strategic outcome oriented goals of NERSA are cascaded from the mandate and reflect the 12 National outcomes as well as those of the Department of Energy. These goals attest to NERSA’s role in facilitating the achievement of the national socio-economic and socio-political development agenda. The strategic outcome oriented goals are:1. To facilitate Security of Supply in order to support sustainable socio-

economic development in South Africa;

2. To facilitate investment in infrastructure in the energy industry to support sustainable socio-economic development in South Africa;

I. STRATEGIC OUTCOME ORIENTED GOALS (2)

3. To promote competitive and efficient functioning of the energy industry in order to sustain socio-economic development in South Africa;

4. To facilitate affordability of and accessibility to the energy industry to balance economic interests of all stakeholders in support of socio-economic development of South Africa and a better life for all; and

5. To position and establish NERSA as a credible and reliable regulator in order to create regulatory certainty.

II. CONTRIBUTION TO SERVICE DELIVERY THROUGH THE LINK TO THE TWELVE

NATIONAL OUTCOMES• The strategic outcome oriented goals of NERSA are linked to

the following 12 National outcomes: 2. A long and healthy life for all South Africans;

4. Decent employment through inclusive economic growth;

6. An efficient, competitive and responsive economic infrastructure network;

8. Sustainable human settlements and improved quality of household life;

10. Environmental assets and natural resources that are well protected and continually enhanced; and

12. An efficient, effective and development oriented public service and an empowered, fair and inclusive citizenship.

OUTCOME 2: A LONG AND HEALTHY LIFE FOR ALL SOUTH AFRICANS

• NERSA contributes through: o Offering advice/comment with regards to cleaner fuels;o Driving renewable energy programmes and promoting the introduction of

renewables and gas into the energy mix;o In determining electricity pricing, NERSA has set aside 3.2c/kWh in the

second Multi-Year Price Determination (MYPD2) for the Electrification Cross-subsidy;

o Taking affordability into consideration when setting and/or approving tariffs and prices;

o Implementing inclining block tariffs to protect the low income electricity consumers; and

o Regulating in a manner which facilitates security of supply.

OUTCOME 4: DECENT EMPLOYMENT THROUGH INCLUSIVE ECONOMIC GROWTH• NERSA contributes through:

o Licensing and the setting and/or approving of tariffs and prices. In this manner NERSA creates pre-conditions towards the achievement of this outcome;

o Approving renewable energy licensees to ensure that the socio-economic development commitments specified in the DoE bidding process are met; and

o Promoting companies that are owned and controlled by Historically Disadvantaged Individuals (HDIs) to become competitive.

OUTCOME 6: AN EFFICIENT, COMPETITIVE AND RESPONSIVE ECONOMIC INFRASTRUCTURE NETWORK

• NERSA contributes through: o Regulating in a manner which facilitates security of supply;o Setting rules and frameworks that facilitate the building of new

infrastructure;o Setting and/or approving cost reflective tariffs and prices that

encourage investment;o Facilitating 3rd party access to facilities; ando Monitoring compliance and undertaking technical audits leading to

regulatory efficiency.

OUTCOME 8: SUSTAINABLE HUMAN SETTLEMENTS AND IMPROVED QUALITY OF

HOUSEHOLD LIFE• NERSA contributes through:

o Facilitating access to electricity / energy services;o Facilitating reliability of supply;o Monitoring maintenance of infrastructure;o Compliance monitoring to licence conditions; ando Dispute resolution, including mediation, arbitration and handling of

complaints.

OUTCOME 10: ENVIRONMENTAL ASSETS AND NATURAL RESOURCES THAT ARE WELL PROTECTED AND CONTINUALLY

ENHANCED• NERSA contributes through:

o Incorporating compliance with the National Environmental Management Act, 1998 (Act No. 107 of 1998) into licence conditions;

o Promoting energy efficiency in licencees and in the NERSA building;o Saving of electricity (MYPD1 and MYPD2);o We have concurred with determinations made by the Minister of

Energy in line with section 34 of the Electricity Regulation Act, 2006 (Act No. 4 of 2006) regarding Open Cycle Gas Turbines in order to give effect to the Integrated Resource Plan (IRP);

o Monitoring the implementation of the IRP; ando Facilitating the transition to a low carbon economy.

OUTCOME 12: AN EFFICIENT, EFFECTIVE AND DEVELOPMENT ORIENTED PUBLIC

SERVICE AND AN EMPOWERED, FAIR AND INCLUSIVE CITIZENSHIP

• NERSA contributes through: o Transparent Processes;o All Decisions and Reasons thereof are made public through being

published on the web site;o The Public is invited to make comments prior to decisions being

made (written or in public hearing);o Customer education;o Training and development of staff and stakeholders;o Clean Energy Education and Empowerment; ando Corporate Social Investment – Luvuyo House, Techno Girl.

III. COMPLIANCE WITH OTHER GOVERNMENT STRATEGIES

• NERSA’s Strategic Plan was not revised in 2013/14 (no amendment in legislation);

• Other Government Strategies such as National Development Plan (NDP), Industrial Plan and Action Programme (IPAP) and the Strategic Infrastructure Programme (SIP) were not completed at the time of finalisation of the Strategic Plan (2012/13 – 2016/17); and

• All of these will be taken into consideration in the new planning cycle starting in June 2013.

IV. STRATEGIC OBJECTIVES

• The strategic objectives of NERSA, expressed as the desired end state of the energy industry are stated as:o A Regulatory environment that facilitates investment in energy

infrastructure;o Ensuring energy supply that is certain and secure for current and

future user needs;o Ensure that fair competition exists within the energy industry;o Ensure that regulatory certainty exists within the energy industry; o Ensure that energy is accessible and affordable for all citizens; ando Ensure that NERSA is established and positioned as a credible and

reliable regulator.

V. PROGRAMMES

• In order to achieve its outcome oriented goals NERSA will deliver on its strategic objectives through the following structured programmes:1. Setting and/or approving tariffs and prices;

2. Licensing and registration;

3. Compliance monitoring and enforcement;

4. Dispute resolution including mediation, arbitration and the handling of complaints;

5. Setting of rules, guidelines and codes for the regulation of the three industries; and

6. Establishing NERSA as an efficient and effective regulator.

VI. PROGRAMME STRATEGIC OBJECTIVESProgramme Programme Strategic Objective

Setting and/or approval of tariffs and prices

To set and approve tariffs and/or prices that facilitate affordability and accessibility whilst balancing the economic interests of all stakeholders

Licensing and registration To control entry and ensure orderly development of the industry

Compliance monitoring and enforcement

To monitor and enforce compliance to legislation and licence conditions in order to ensure the efficient operation of licensed activities within the legislative framework

Dispute resolution including mediation, arbitration and handling of complaints

To create a fair balance between the needs of all stakeholders

Setting of rules, guidelines and codes for regulation

To ensure the setting of appropriate rules, guidelines and codes of best practices in the quest to promote uniformity and standardise practices in the regulation of the three energy industries

Establishing NERSA as an efficient and effective regulator

To facilitate the effectiveness and efficiency of NERSA as a regulator in the energy industry

H. CHALLENGES, NERSA’s RESPONSE AND LINKS TO

PROGRAMMES

I. Electricity Industry Regulation

Challenge (1) NERSA’s Response Programme

Demand and Supply Streamlining IPP licensing process

Licensing and Registration

Energy Efficiency and Demand Side Management

Setting of rules, guidelines and codes

Energy Conservation Scheme for emergency conditionsCreate space for maintenance of the generation fleet

Transport and reliability Assessment and evaluation of projects in Eskom’s approved Transmission Development Plan

Distribution and reticulation Compliance framework implementation and monitoring

Cost of supply studies for electricity distributors

Access, affordability and investments

Customisation of the IBTs

Setting and/or approval of prices and tariffs

Monitoring the implementation of MYPD3Municipal tariff approvalsEstablishment of consumer forums

II. Piped-Gas Industry Regulation

Lack of credible gas anchor customers

Development of a gas marketoMonitor trends in alternative sources of supplyoContinue the dialogues on impediments to gas infrastructure investment

Ensure that prices are equitable and competitive for all categories / classes of customers

Sending correct price signalso Implement maximum

pricing methodologyo Market value pricing

investigationso Enforce pricing provisions

of the Agreement

Entry to and competition within the gas market

Promote entry and competitionoLicence construction applicationsoCompliance framework implementation and monitoringoThird Part Access enforcement and advocacy

Loss of credibility and regulatory reputation can deter development of the gas market

Create regulatory certainty Establishing NERSA as an efficient and effective regulator

III. Petroleum Pipelines Industry Regulation

Construction delays have resulted in increased capital costs which will attract higher tariffs

oDetermining “prudently incurred” costs in the increased capital costs due to infrastructure construction delays

oMonitor impact on Transnet’s financial state

Tariff increases may incentivise other modes of transport (road and rail) when pipelines need higher volumes

Setting of appropriate tariffs in line with the published methodology

Security of supply of petroleum to the inland areas

Monitoring security of inland supply

Applicants for storage construction licences need to find areas of low/no competition to remain competitive

Evaluation of storage construction licence applications

Licensing and registration

Monitoring and inspection of licences issued

Compliance Monitoring and Enforcement

Identification of and appropriate action against unlicensed facilities

Promotion of 3rd party access

Common carriage and 3rd party access: monitoring facilitation and enforcement

Compliance Monitoring and Enforcement

IV. Cross-Cutting Regulatory

Information Asymmetry Implementation of the Regulatory Reporting Manuals (Financial and Non-Financial)

Advise policy makers of NERSA views, policy gaps and NERSA’s mandate

Regulator communication with Policy Maker

Coordinate NERSA activities with other regulators with concurrent jurisdiction

Memoranda of Understanding

Consumer Advocacy o Consumer Education

o Improve access of customers to public hearing notices

Assess NERSA’s processes and methodologies against best in world practices through regulatory analysis, research, benchmarking and auditing

o Regulatory Impact Analysis / Assessment

o Benchmarking of regulatory decisions

o Harmonisation of regulatory processes

V. Organisational

Legislative amendmentoNational Energy Regulator Amendment BilloElectricity Regulation Amendment BilloIndependent System and Market Operator BillPossible change in institutional character

Institutional and Organisational Review

Attraction and retention of requisite skills

o Improved Human Resource Policies, Procedures and Systems

oCulture recalibrationoConditions of Service

Enabling technology oBusiness Process Analysiso Improvement of IT systems and

processesoKnowledge Management

Conducive working environment

oOrganisational culture development

oRefurbishment of the NESRA building

Image of NERSA Stakeholder perception survey Establishing NERSA as an efficient and effective regulator

I. ANNUAL PERFORMANCE PLAN (2013/14 – 2015/16)

I. ELECTRICITY INDUSTRY REGULATION

NUMBER OF KPI’S PER PROGRAMME

Programme 1: Setting and/or approval of tariffs and prices

• Municipal tariff approvals;• Implementation of inclining block tariffs;• Free Basic Electricity;• Monitoring the implementation of MYPD3; and• Structural adjustment approvals.

Programme 1: Setting and/or approval of tariffs and prices (1)

Programme KPI Target for 2013/14

% of tariff applications of all licensed distributors approved

Annually published Guidelines for Municipal tariff increases and Benchmarks

Published Guidelines for Municipal tariff increases and Benchmarks for 2014/15

Number of metros’ Regulatory Reporting Manual (RRM) implementation plans approved

% of licensed distributors for residential customers with Approved Inclining Block Tariffs (IBTs)

Annually approved Free Basic Electricity Rate for Eskom

Free Basic Electricity Rate for 2013/14 approved and communicated

Annual approved report on Eskom’s actual revenue recovery

Annual report on Eskom’s actual revenue recovery

Annually approved Regulatory Financial Reports of Eskom

Approved Eskom’s Regulatory Financial Reports for 2012/13

Annually approved retail tariffs (ERTSA) of Eskom

Approved Eskom’s retail tariffs (ERTSA) for 2014/15

Programme 2: Licensing and Registration

• Processing of licence applications

% of licence applications processed within statutory time frames

80% of licence applications processed within 120 days from application

Programme 3: Compliance Monitoring and Enforcement

• Conducting of compliance audits; and• Monitoring implementation of action plans arising from

compliance audits.

Programme 3: Compliance monitoring and enforcement

Number of licencees audited per annum to determine their level of compliance with licence conditions

Number of audit reports on the state on compliance of licencees with licence conditions

Number of corrective action plans received from non-complying licencees monitored

Annual report on state of compliance in the electricity industry published

Programme 4: Dispute resolution, including mediation, arbitration and handling of

complaints

• Resolution of complaints

Programme 4: Dispute resolution, including mediation, arbitration and handling of complaints

% of complaints processed within statutory timelines

75% of complaints processed within 120 days from receipt

Annual report on the trends regarding to and status of complaints in the electricity industry published

Programme 5: Setting of rules, guidelines and codes for the regulation of the

electricity industry

• Grid Code administration;• Audits of Transmission development plans;• Audits on EEDSM and compliance with the MYPD; and• Reports on performance and progress of Renewable

Energy.

Programme 5: Setting of rules, guidelines and codes for the regulation of the electricity industry (1)

% of applications from the ESI relating to fair and equitable access to electricity infrastructure requiring exemptions to the South African distribution and transmission grid code, considered in line with legal requirements

% of applications from the ESI relating to fair and equitable access to electricity infrastructure requiring amendment to the South African distribution and transmission grid code, considered in line with legal requirements

Updated grid code Annually published updated Grid Code

Programme 5: Setting of rules, guidelines and codes for the regulation of the electricity industry (2)

Number of approved audit reports that details the assessment and evaluation of projects in Eskom’s approved Transmission Development Plan for compliance with the South African Grid Code

Number of approved audit reports for the review of EEDSM and compliance with the MYPD

Number of action plans for the annual EEDSM audits

Number of reports on the performance and progress of Renewable Energy

Programme 6: Establishing NERSA as an efficient and effective regulator

• Establishment of end-user forums

Number of end-user forums established 5

II. PIPED-GAS INDUSTRY REGULATION

• Approval of maximum prices;• Approval of transmission and storage tariffs;• Report on Sasol Gas compliance with all pricing provisions

in terms of Schedule One to the Agreement; and• Calculation of aggregate prices.

Programme 1: Setting and/or approval of tariffs and prices (1) Programme KPI Target for 2013/14

Finalised number of maximum prices applications approved within 120 days from the date of publishing the (final) price application

Finalise maximum price applications for all licensees other than Sasol Gas within 120 days from the date of publishing the (final) price application

Finalised number of transmission and storage tariffs applications within 120 days from the date of publication of the tariff application

Decision on Transnet transmission tariff and all storage licensee tariff applications within 120 days of the date of publication of the (final) tariff application

Draft/consultation (Gauteng) gas transmission pipeline tariffs for Sasol Gas

Number of days for providing a report on Sasol Gas compliance with all pricing provisions in terms of Schedule One to the Agreement

Report on Sasol Gas compliance with all pricing provisions contained in Schedule One to the Agreement to be completed within 110 days after receipt of the relevant information

Number of days for completing the calculation of aggregate prices of gas for each province in line with legal requirements

Approval of aggregate prices of gas for 2012 in each province within 120 days after receipt of the relevant information

• Processing of licence and registration applications and implementation of decisions;

• Investigation of industry investigated to identify unregistered import and production activities; and

• Reporting on the implementation of the gas to power component of IRP2010.

% of all licence applications finalized according to licensing procedures

Number of days taken to finalise registration applications

100% of registration applications are processed within 60 days and approved within 90 days.

Annual reports on the implementation of gas to power in IRP

Draft implementation framework developed and communicated

• Assessment of volume balance reports;• Conducting of audits on ROMPCO pipeline;• Conducting investigations / inspections; and• Reports on uncommitted capacity.

Number of monthly volume balance reports assessed and discrepancies investigated

Number of audits on the ROMPCO pipeline conducted

Number of investigations / inspections conducted

Quarterly monitoring reports on RRM Compliance

Full year financial reports submitted by 50% of licensees included in the pilot project

Evaluation reports on uncommitted capacity in transmission pipelines

ROMPCO + 1

complaints

• Resolution of received complaints; and• Finalisation of investigations.

% of complaint investigations completed within 9 months and non-compliance notices issued (where applicable)

% of initiated investigations completed within 9 months and non-compliance notices issued (where applicable)

Programme 5: Setting of rules, guidelines and codes for the regulation of the piped-

gas industry

• Developed, approved and implemented HDI scorecard.

Programme 5: Setting of rules, guidelines and codes for the regulation of the piped-gas industry

Developed, approved and implemented HDI scorecard

Approved HDI scorecard implementation framework

• Proposed amendments to legislation and other engagements with policy maker; and

• Stakeholder workshops.

Ongoing engagements with policy makers

Continued engagement policy makers and comment on legislative amendments where applicable

Number of stakeholder workshops and media engagements

III. PETROLEUM PIPELINES INDUSTRY REGULATION

• Setting of pipeline tariffs (Transnet and others);• Approval of storage and loading facility tariffs.

Number of pipelines tariffs applications approved

Approved Transnet pipeline tariffs for 2014/15Approved tariffs for Chevron

% of licensed storage and loading facilities’ tariffs approved

Updated published storage tariff Published storage tariffs

Annual Report on benchmarking of storage tariffs

Conduct a benchmark study on storage tariffs

Updated published financial and information

Financial and tariff information published on NERSA website

• Processing of licence applications; and• Investigation of suspected unlicensed activities.

% of licences approved within statutory deadlines

Number of suspected unlicensed facilities investigated

• Infrastructure utilisation reports;• Completion of assessment reports;• HDSA reporting;• Storage allocation reporting; and• Reporting on specified licensees’ implementation of the

pipelines and loading facilities access principles.

Number of infrastructure utilisation reports

% of reports analysed and ready for noting within 60 days

Published status report on HDSA indicators based on a % of licensees

Published storage allocation mechanisms based on a % of licensees

Number of reports on the analysis of specified licensees’ implementation of the pipelines and loading facilities access principles

complaints

• Resolution of complaints

% of complaints received investigated and concluded in line with legal requirements

100% of complaints received investigated and reported on within 60 days.

petroleum pipelines industry• Publish licensing guidelines;• Publish tariff guidelines for storage facilities;• Review and publish Frequently Asked Questions document on tariff

applications;• Publish guidelines for calculation of Starting Regulatory Asset Base;• Publish Minimum Information Requirements for Tariff Applications;

and• Reporting on contributions towards alignment between different Acts

and government policies and regulations.

Programme 5: Setting of rules, guidelines and codes for the regulation of the petroleum pipelines industry (1)

Approved licensing guidelines published Updated licensing guidelines published on NERSA website

Approved tariff guidelines for storage facilities published

Updated annual tariff guidelines for storage facilities published on NERSA website

Approved annually reviewed FAQ published

Approved reviewed FAQ published on NERSA website

Approved guidelines to determine the SRAB of storage facilities published

Guidelines to determine the SRAB of storage facilities published

Approved Minimum Information Requirements for Tariff Applications (MIRTA) published

Approved updated MIRTA published on NERSA website

Programme 5: Setting of rules, guidelines and codes for the regulation of the petroleum pipelines industry (2)

Number of reports on contributions towards alignment between Petroleum Pipelines Act and Petroleum Pipelines Levies Act and government policies and regulations

Quarterly

• Approved implementation plan for the findings and recommendations in the Report on investigated infrastructure and bottlenecks in the petroleum pipelines infrastructure in Durban; and

• Report on the inland supply forecast.

Approved implementation plan for the findings and recommendations in the Report on investigated infrastructure and bottlenecks in the petroleum pipelines infrastructure in Durban

Implementation plan for the findings and recommendations in the Report on investigated infrastructure and bottlenecks in the petroleum pipelines infrastructure in Durban

Number of reports on the inland supply forecast

Biannual

Approved RRM for non-financial information (NFI) Volume 7

Finalised RRM for NFI

IV. CROSS-CUTTING REGULATION

• Benchmark report on regulatory decisions by category;• Impact of regulatory decisions;• Research on new sources of energy;• Stakeholder engagement and education; and• Approved proposals / comments on policy changes.

Programme 6: Establishing NERSA as an efficient and effective regulator (1)

Benchmark report on regulatory decisions by category

Report on the impact of regulatory decisions

Approved framework for conducting impact assessment

Research reports on new sources of energy

Research reports

Published quarterly newsletters Quarterly newsletters published

Number of stakeholder engagement and education programmes conducted

Approved proposals / comments on policy changes

Approved proposals / comments on policy changes (if and when necessary)

V. ORGANISATIONAL

electricity industry

• Implementation of Annual Performance Plan;• Organisational structure filled;• Training and Development; • Customer satisfaction; • Unqualified audit; and• Payment of creditors.

% of targets in the Annual Performance Plan met

Baseline to be determined in 2012/13

% of organisational structure filled 95%

% of staff undergoing training and development

Level of (%) customer satisfaction 68%

Result of annual audit Unqualified

% of creditors paid within 30 days after all relevant documentation have been received

J. BUDGET AND FUNDING (2013/14)

RING-FENCING METHODOLOGY• According to Section 13 of the National Energy Regulator

Act, all accounts for the three regulated industries have to be ring-fencedo all direct costs attributable to an industry are allocated to that industryo the ratio of the staff compliment attributed to the industry-specific

functions is used to allocate the remaining (common) costs to the respective industries

o the common costs allocation ratio for electricity, piped-gas and petroleum pipelines industries is 58%:21%:21%

BUDGET AND FUNDING FOR 2013/14

*Over recovery from previous years from regulated industries – approved by National Treasury

Expenditure Income Levies

Electricity R159 225 099 R137 043 936 0.05468 c/kWh

Piped-Gas R56 942 531 R48 808 067 30.166 c/GJ

Petroleum Pipelines

R59 739 715 R50 933 740 0.28777 c/l

Other R39 121 602*

Total R275 907 345 R275 907 345

NATIONAL ENERGY REGULATOR OF SOUTH AFRICABudget per programme

2013/14

Programme Electricity Piped-Gas Petroleum Pipelines

Total per Programme

PROG 1 - Setting and/or approval of tariffs and prices 51 820 027 12 358 916 26 623 264 90 802 206

PROG 2 - Licensing and Registration 23 216 712 7 867 285 11 974 737 43 058 734

PROG 3 - Compliance monitoring and enforcement 15 477 808 7 867 285 8 708 092 32 053 185

PROG 4 - Dispute resolution including mediation, arbitration and the resolution of complaints

10 318 539 1 866 190 3 110 072 15 294 801

PROG 5 - Setting of rules, guides and codes for regulation 40 070 485 10 697 091 3 776 296 54 543 872

PROG 6 - Establishing NERSA as an efficient and effective organisation

18 321 528 16 285 764 5 547 255 40 154 547

Total per Industry 159 225 099 56 942 531 59 739 715 275 907 345

K. CONCLUSION

CONCLUSION• NERSA would like to thank the Portfolio Committee for the

opportunity to present its Strategic Plan and Annual Performance Plan;

• Ongoing refinement of processes is taking place;• NERSA is conscious of the regulatory burden it imposes;• NERSA is striving for regulatory certainty to create a

conducive environment for attracting and ensuring orderly investment;

• Filling legislative gaps is a priority; and• Regulatory challenge - balance the interests of suppliers and

customers.

THANK YOUvisit us at www.nersa.org.za

nersa strategic plan (2012/13 – 2016/17) and annual performance plan (2013/14 – 2015/16)

nersa strategic plan

energy industry

approved strategic plan

strategic plansapplicable

pipedgas industry gas

performance targets

institutional performance

national energy regulator

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