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NERSA Strategic Plan (2012/13 – 2016/17) and Annual Performance Plan (2013/14 – 2015/16)
23 April 2013
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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
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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
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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
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A. INTRODUCTION
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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
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B. FRAMEWORK FOR STRATEGIC PLANS AND ANNUAL PERFORMANCE
PLANS
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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.
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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.
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C. PLANNING CONCEPTS
PLANNING CONCEPTS
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D. MISSION, VISION, VALUES AND
REGULATORY PRINCIPLES
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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”
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VALUES
• Passion • Spirit of Partnership • Excellence • Innovation • Integrity • Responsibility • Professionalism
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REGULATORY PRINCIPLES
Underpinned by NERSA’s legal mandate • Transparency • Neutrality • Consistency and Predictability• Independence • Accountability • Integrity• Efficiency
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E. MANDATE
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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)
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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)
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F. ACHIEVEMENTS (2012/13)
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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).
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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.
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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
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G. STRATEGIC PLAN (2012/13 – 2016/17)
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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;
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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
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H. CHALLENGES, NERSA’s RESPONSE AND LINKS TO
PROGRAMMES
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I. Electricity Industry Regulation
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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
Licensing and Registration
Transport and reliability Assessment and evaluation of projects in Eskom’s approved Transmission Development Plan
Setting of rules, guidelines and codes
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Challenge (2) NERSA’s Response Programme
Distribution and reticulation Compliance framework implementation and monitoring
Compliance monitoring and enforcement
Cost of supply studies for electricity distributors
Setting of rules, guidelines and codes
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
Establishing NERSA as an efficient and effective regulator
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II. Piped-Gas Industry Regulation
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Challenge (1) NERSA’s Response Programme
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
Establishing NERSA as an efficient and effective regulator
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
Setting and/or approval of prices and tariffs
Compliance monitoring and enforcement
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Challenge (2) NERSA’s Response Programme
Entry to and competition within the gas market
Promote entry and competitionoLicence construction applicationsoCompliance framework implementation and monitoringoThird Part Access enforcement and advocacy
Licensing and Registration
Compliance monitoring and enforcement
Loss of credibility and regulatory reputation can deter development of the gas market
Create regulatory certainty Establishing NERSA as an efficient and effective regulator
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III. Petroleum Pipelines Industry Regulation
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Challenge (1) NERSA’s Response Programme
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
Setting and/or approval of prices and tariffs
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
Setting and/or approval of prices and tariffs
Security of supply of petroleum to the inland areas
Monitoring security of inland supply
Establishing NERSA as an efficient and effective regulator
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Challenge (2) NERSA’s Response Programme
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
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IV. Cross-Cutting Regulatory
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Challenge (1) NERSA’s Response Programme
Information Asymmetry Implementation of the Regulatory Reporting Manuals (Financial and Non-Financial)
Establishing NERSA as an efficient and effective regulator
Advise policy makers of NERSA views, policy gaps and NERSA’s mandate
Regulator communication with Policy Maker
Establishing NERSA as an efficient and effective regulator
Coordinate NERSA activities with other regulators with concurrent jurisdiction
Memoranda of Understanding
Establishing NERSA as an efficient and effective regulator
Consumer Advocacy o Consumer Education
o Improve access of customers to public hearing notices
Establishing NERSA as an efficient and effective regulator
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Challenge (2) NERSA’s Response Programme
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
Establishing NERSA as an efficient and effective regulator
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V. Organisational
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Challenge (1) NERSA’s Response Programme
Legislative amendmentoNational Energy Regulator Amendment BilloElectricity Regulation Amendment BilloIndependent System and Market Operator BillPossible change in institutional character
Institutional and Organisational Review
Establishing NERSA as an efficient and effective regulator
Attraction and retention of requisite skills
o Improved Human Resource Policies, Procedures and Systems
oCulture recalibrationoConditions of Service
Establishing NERSA as an efficient and effective regulator
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Challenge (2) NERSA’s Response Programme
Enabling technology oBusiness Process Analysiso Improvement of IT systems and
processesoKnowledge Management
Establishing NERSA as an efficient and effective regulator
Conducive working environment
oOrganisational culture development
oRefurbishment of the NESRA building
Establishing NERSA as an efficient and effective regulator
Image of NERSA Stakeholder perception survey Establishing NERSA as an efficient and effective regulator
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I. ANNUAL PERFORMANCE PLAN (2013/14 – 2015/16)
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I. ELECTRICITY INDUSTRY REGULATION
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NUMBER OF KPI’S PER PROGRAMME
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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.
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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
100%
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
6
% of licensed distributors for residential customers with Approved Inclining Block Tariffs (IBTs)
80%
Annually approved Free Basic Electricity Rate for Eskom
Free Basic Electricity Rate for 2013/14 approved and communicated
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Programme 1: Setting and/or approval of tariffs and prices (2)
Programme KPI Target for 2013/14
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
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Programme 2: Licensing and Registration
• Processing of licence applications
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Programme 2: Licensing and Registration
Programme KPI Target for 2013/14
% of licence applications processed within statutory time frames
80% of licence applications processed within 120 days from application
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Programme 3: Compliance Monitoring and Enforcement
• Conducting of compliance audits; and• Monitoring implementation of action plans arising from
compliance audits.
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Programme 3: Compliance monitoring and enforcement
Programme KPI Target for 2013/14
Number of licencees audited per annum to determine their level of compliance with licence conditions
10
Number of audit reports on the state on compliance of licencees with licence conditions
10
Number of corrective action plans received from non-complying licencees monitored
5
Annual report on state of compliance in the electricity industry published
Annual report on state of compliance in the electricity industry published
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Programme 4: Dispute resolution, including mediation, arbitration and handling of
complaints
• Resolution of complaints
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Programme 4: Dispute resolution, including mediation, arbitration and handling of complaints
Programme KPI Target for 2013/14
% 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
Annual report on the trends regarding to and status of complaints in the electricity industry published
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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.
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Programme 5: Setting of rules, guidelines and codes for the regulation of the electricity industry (1)
Programme KPI Target for 2013/14
% 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
80%
% 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
80%
Updated grid code Annually published updated Grid Code
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Programme 5: Setting of rules, guidelines and codes for the regulation of the electricity industry (2)
Programme KPI Target for 2013/14
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
1
Number of approved audit reports for the review of EEDSM and compliance with the MYPD
1
Number of action plans for the annual EEDSM audits
1
Number of reports on the performance and progress of Renewable Energy
4
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Programme 6: Establishing NERSA as an efficient and effective regulator
• Establishment of end-user forums
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Programme 6: Establishing NERSA as an efficient and effective regulator
Programme KPI Target for 2013/14
Number of end-user forums established 5
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II. PIPED-GAS INDUSTRY REGULATION
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NUMBER OF KPI’S PER PROGRAMME
72
Programme 1: Setting and/or approval of tariffs and prices
• 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.
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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
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Programme 1: Setting and/or approval of tariffs and prices (2)
Programme KPI Target for 2013/14
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
75
Programme 2: Licensing and Registration
• 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.
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Programme 2: Licensing and Registration
Programme KPI Target for 2013/14
% of all licence applications finalized according to licensing procedures
50%
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
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Programme 3: Compliance Monitoring and Enforcement
• Assessment of volume balance reports;• Conducting of audits on ROMPCO pipeline;• Conducting investigations / inspections; and• Reports on uncommitted capacity.
78
Programme 3: Compliance Monitoring and Enforcement
Programme KPI Target for 2013/14
Number of monthly volume balance reports assessed and discrepancies investigated
12
Number of audits on the ROMPCO pipeline conducted
2
Number of investigations / inspections conducted
4
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
79
Programme 4: Dispute resolution, including mediation, arbitration and handling of
complaints
• Resolution of received complaints; and• Finalisation of investigations.
80
Programme 4: Dispute resolution, including mediation, arbitration and handling of complaints
Programme KPI Target for 2013/14
% of complaint investigations completed within 9 months and non-compliance notices issued (where applicable)
50%
% of initiated investigations completed within 9 months and non-compliance notices issued (where applicable)
50%
81
Programme 5: Setting of rules, guidelines and codes for the regulation of the piped-
gas industry
• Developed, approved and implemented HDI scorecard.
82
Programme 5: Setting of rules, guidelines and codes for the regulation of the piped-gas industry
Programme KPI Target for 2013/14
Developed, approved and implemented HDI scorecard
Approved HDI scorecard implementation framework
83
Programme 6: Establishing NERSA as an efficient and effective regulator
• Proposed amendments to legislation and other engagements with policy maker; and
• Stakeholder workshops.
84
Programme 6: Establishing NERSA as an efficient and effective regulator
Programme KPI Target for 2013/14
Ongoing engagements with policy makers
Continued engagement policy makers and comment on legislative amendments where applicable
Number of stakeholder workshops and media engagements
4
85
III. PETROLEUM PIPELINES INDUSTRY REGULATION
86
NUMBER OF KPI’S PER PROGRAMME
87
Programme 1: Setting and/or approval of tariffs and prices
• Setting of pipeline tariffs (Transnet and others);• Approval of storage and loading facility tariffs.
88
Programme 1: Setting and/or approval of tariffs and prices
Programme KPI Target for 2013/14
Number of pipelines tariffs applications approved
Approved Transnet pipeline tariffs for 2014/15Approved tariffs for Chevron
% of licensed storage and loading facilities’ tariffs approved
40%
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
89
Programme 2: Licensing and Registration
• Processing of licence applications; and• Investigation of suspected unlicensed activities.
90
Programme 2: Licensing and Registration
Programme KPI Target for 2013/14
% of licences approved within statutory deadlines
100%
Number of suspected unlicensed facilities investigated
5
91
Programme 3: Compliance Monitoring and Enforcement
• 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.
92
Programme 3: Compliance Monitoring and Enforcement
Programme KPI Target for 2013/14
Number of infrastructure utilisation reports
2
% of reports analysed and ready for noting within 60 days
90%
Published status report on HDSA indicators based on a % of licensees
70%
Published storage allocation mechanisms based on a % of licensees
70%
Number of reports on the analysis of specified licensees’ implementation of the pipelines and loading facilities access principles
2
93
Programme 4: Dispute resolution, including mediation, arbitration and handling of
complaints
• Resolution of complaints
94
Programme 4: Dispute resolution, including mediation, arbitration and handling of complaints
Programme KPI Target for 2013/14
% of complaints received investigated and concluded in line with legal requirements
100% of complaints received investigated and reported on within 60 days.
95
Programme 5: Setting of rules, guidelines and codes for the regulation of the
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.
96
Programme 5: Setting of rules, guidelines and codes for the regulation of the petroleum pipelines industry (1)
Programme KPI Target for 2013/14
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
97
Programme 5: Setting of rules, guidelines and codes for the regulation of the petroleum pipelines industry (2)
Programme KPI Target for 2013/14
Number of reports on contributions towards alignment between Petroleum Pipelines Act and Petroleum Pipelines Levies Act and government policies and regulations
Quarterly
98
Programme 6: Establishing NERSA as an efficient and effective regulator
• 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.
99
Programme 6: Establishing NERSA as an efficient and effective regulator
Programme KPI Target for 2013/14
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
100
IV. CROSS-CUTTING REGULATION
101
NUMBER OF KPI’S PER PROGRAMME
102
Programme 6: Establishing NERSA as an efficient and effective regulator
• 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.
103
Programme 6: Establishing NERSA as an efficient and effective regulator (1)
Programme KPI Target for 2013/14
Benchmark report on regulatory decisions by category
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
25
104
Programme 6: Establishing NERSA as an efficient and effective regulator (2)
Programme KPI Target for 2013/14
Approved proposals / comments on policy changes
Approved proposals / comments on policy changes (if and when necessary)
105
V. ORGANISATIONAL
106
NUMBER OF KPI’S PER PROGRAMME
107
Programme 6: Setting of rules, guidelines and codes for the regulation of the
electricity industry
• Implementation of Annual Performance Plan;• Organisational structure filled;• Training and Development; • Customer satisfaction; • Unqualified audit; and• Payment of creditors.
108
Programme 6: Establishing NERSA as an efficient and effective regulator (1)
Programme KPI Target for 2013/14
% 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
80%
Level of (%) customer satisfaction 68%
Result of annual audit Unqualified
% of creditors paid within 30 days after all relevant documentation have been received
100%
109
J. BUDGET AND FUNDING (2013/14)
110
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%
111
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
112
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
113
K. CONCLUSION
114
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.
115
THANK YOUvisit us at www.nersa.org.za