NERSA Strategic Plan (2012/13 – 2016/17) and
Annual Performance Plan (2013/14 – 2015/16)
23 April 2013
1

CONTENT (1)
A. Introduction
B. Framework for Strategic Plans and Annual Performance
Plans
C. Planning Concepts
D. Vision, Mission, Values and Regulatory Principles
E. Mandate
F. Achievements (2012/13)
I.
Electricity Industry Regulation
II.
Piped-Gas Industry Regulation
III. Petroleum Pipelines Industry Regulation
2

CONTENT (2)
G. Strategic Plan (2012/13 – 2016/17)
I.
Strategic Outcome Oriented Goals
II.
Contribution to Service delivery through the link to Twelve
Government Outcomes
III. Compliance with other Government Strategies
IV. Strategic Objectives
V. Programmes
VI. Programme Strategic Objectives
H. Challenges, NERSA’s Response and Link to
Programmes
I.
Electricity Industry Regulation
II.
Piped-Gas Industry Regulation
III. Petroleum Pipelines Industry Regulation
IV. Cross-Cutting Regulatory
V. Organisational
3

CONTENT (3)
I.
Annual Performance Plan (2013/14 – 2015/16)
I.
Electricity Industry Regulation
II.
Piped-Gas Industry Regulation
III. Petroleum Pipelines Industry Regulation
IV. Cross-Cutting Regulation
V. Organisational
J. Budget and Funding (2013/14)
I.
Ring-fencing Methodology
II.
Budget and Funding (2013/14)
III. Programme Budgets (2013/14)
K. Conclusion
4

5

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
6

7

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.
8

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; and o There were no significant gaps in the approved Strategic Plan.
• Strategic Plan was not amended.
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10

PLANNING CONCEPTS
11

12

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”
13

VALUES
• Passion
• Spirit of Partnership
• Excellence
• Innovation
• Integrity
• Responsibility
• Professionalism
14

REGULATORY PRINCIPLES
Underpinned by NERSA’s legal mandate
• Transparency
• Neutrality
• Consistency and Predictability
• Independence
• Accountability
• Integrity
• Efficiency
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16

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)
17

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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19

I. ELECTRICITY INDUSTRY REGULATION
• Tariffs o Approved an average annual increase of 8% in the revenue requirements for Eskom for the next five years; and o Received 183 out of 186 (98%) municipal and private distributor tariffs applications for 2012/13 and approved all for implementation.
• Generation o Approved 47 Renewable Energy Generation licences (within 90 days from application instead of the 120 days legislated timeframe); and o 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.
• Distribution o 9 distribution licences were issued for connection facilities between the Eskom delivery point and IPP generation facilities.
• Other o 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.
• Licensing o 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.
21

III. PETROLEUM PIPELINES INDUSTRY
REGULATION
• Tariffs o Approved an increase of 8.53% in allowable revenue for Transnet
Petroleum Pipelines for the period 2013/14; and o Made decisions on 60 storage and loading facilities.
• Licensing o Approved 8 construction licences and 3 operation licences; o Amended 7 construction and storage licences; and o Revoked 13 storage licences.
• Other o 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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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 sociopolitical development agenda. The strategic outcome oriented goals are:
1.
To facilitate Security of Supply in order to support sustainable socioeconomic 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 socioeconomic 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.
25

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 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.
27

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 socioeconomic 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.
28

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 3 rd party access to facilities; and o Monitoring compliance and undertaking technical audits leading to regulatory efficiency.
29

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; and o Dispute resolution, including mediation, arbitration and handling of complaints.
30

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; and o Facilitating the transition to a low carbon economy.
31

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; and o Corporate Social Investment – Luvuyo House, Techno Girl.
32

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.
33

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; and o Ensure that NERSA is established and positioned as a credible and reliable regulator.
34

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.
35

VI. PROGRAMME STRATEGIC OBJECTIVES
Programme Programme Strategic Objective
Setting and/or approval of tariffs and prices
Licensing and registration
Compliance monitoring and enforcement
Dispute resolution including mediation, arbitration and handling of complaints
Setting of rules, guidelines and codes for regulation
To set and approve tariffs and/or prices that facilitate affordability and accessibility whilst balancing the economic interests of all stakeholders
To control entry and ensure orderly development of the industry
To monitor and enforce compliance to legislation and licence conditions in order to ensure the efficient operation of licensed activities within the legislative framework
To create a fair balance between the needs of all stakeholders
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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37

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Challenge (1)
Demand and Supply
Transport and reliability
NERSA’s Response
Streamlining IPP licensing process
Energy Efficiency and
Demand Side
Management
Energy Conservation
Scheme for emergency conditions
Create space for maintenance of the generation fleet
Assessment and evaluation of projects in
Eskom’s approved
Transmission
Development Plan
Programme
Licensing and Registration
Setting of rules, guidelines and codes
Licensing and Registration
Setting of rules, guidelines and codes
39

Challenge (2) NERSA’s Response
Distribution and reticulation Compliance framework implementation and
Programme
Compliance monitoring and enforcement monitoring
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
Monitoring the prices and tariffs implementation of
MYPD3
Municipal tariff approvals
Establishment of consumer forums
Establishing NERSA as an efficient and effective regulator
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41

Challenge (1)
Lack of credible gas anchor customers
Ensure that prices are equitable and competitive for all categories / classes of customers
NERSA’s Response
Development of a gas market o Monitor trends in alternative sources of supply o Continue the dialogues on impediments to gas infrastructure investment
Sending correct price signals o Implement maximum pricing methodology o Market value pricing investigations o Enforce pricing provisions of the Agreement
Programme
Establishing NERSA as an efficient and effective regulator
Setting and/or approval of prices and tariffs
Compliance monitoring and enforcement
42

Challenge (2)
Entry to and competition within the gas market
Loss of credibility and regulatory reputation can deter development of the gas market
NERSA’s Response
Promote entry and competition o Licence construction applications o Compliance framework implementation and monitoring o Third Part Access enforcement and advocacy
Create regulatory certainty
Programme
Licensing and
Registration
Compliance monitoring and enforcement
Establishing NERSA as an efficient and effective regulator
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44

Challenge (1)
Construction delays have resulted in increased capital costs which will attract higher tariffs
Tariff increases may incentivise other modes of transport (road and rail) when pipelines need higher volumes
Security of supply of petroleum to the inland areas
NERSA’s Response o Determining “prudently incurred” costs in the increased capital costs due to infrastructure construction delays o Monitor impact on
Transnet’s financial state
Setting of appropriate tariffs in line with the published methodology
Monitoring security of inland supply
Programme
Setting and/or approval of prices and tariffs
Setting and/or approval of prices and tariffs
Establishing NERSA as an efficient and effective regulator
45

Challenge (2)
Applicants for storage construction licences need to find areas of low/no competition to remain competitive
Promotion of 3 access rd party
NERSA’s Response
Evaluation of storage construction licence applications
Monitoring and inspection of licences issued
Identification of and appropriate action against unlicensed facilities
Common carriage and 3 rd party access: monitoring facilitation and enforcement
Programme
Licensing and registration
Compliance Monitoring and Enforcement
Compliance Monitoring and Enforcement
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47

Challenge (1) NERSA’s Response Programme
Information Asymmetry Implementation of the
Regulatory Reporting o Consumer
Education o Improve access of customers to public hearing notices
Establishing NERSA as an efficient and
Manuals (Financial and
Non-Financial) effective regulator
Advise policy makers of NERSA Regulator views, policy gaps and
NERSA’s mandate
Coordinate NERSA activities with other regulators with communication with
Policy Maker
Memoranda of
Understanding
Establishing NERSA as an efficient and effective regulator
Establishing NERSA as an efficient and concurrent jurisdiction
Consumer Advocacy effective regulator
Establishing NERSA as an efficient and effective regulator
48

Challenge (2)
Assess NERSA’s processes and methodologies against best in world practices through regulatory analysis, research, benchmarking and auditing
NERSA’s Response o Regulatory Impact
Analysis / Assessment o Benchmarking of regulatory decisions o Harmonisation of regulatory processes
Programme
Establishing NERSA as an efficient and effective regulator
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50

Challenge (1)
Legislative amendment o National Energy
Regulator
Amendment Bill o Electricity Regulation
Amendment Bill o Independent System and Market Operator
Bill
Possible change in institutional character
Attraction and retention of requisite skills
NERSA’s Response
Institutional and Organisational
Review o Improved Human Resource
Policies, Procedures and
Systems o Culture recalibration o Conditions of Service
Programme
Establishing NERSA as an efficient and effective regulator
Establishing NERSA as an efficient and effective regulator
51

Challenge (2)
Enabling technology
Conducive working environment
Image of NERSA
NERSA’s Response o Business Process Analysis o Improvement of IT systems and
Programme
Establishing NERSA as an efficient and processes o Knowledge Management o Organisational culture effective regulator
Establishing NERSA as an efficient and development o Refurbishment of the NESRA building effective regulator
Stakeholder perception survey Establishing NERSA as an efficient and effective regulator
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I. ELECTRICITY INDUSTRY REGULATION
54

NUMBER OF KPI’S PER PROGRAMME
55

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.
56

Programme 1: Setting and/or approval of tariffs and prices (1)
Programme KPI
% of tariff applications of all licensed distributors approved
Annually published Guidelines for
Municipal tariff increases and
Benchmarks
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
Target for 2013/14
100%
Published Guidelines for Municipal tariff increases and Benchmarks for 2014/15
6
80%
Free Basic Electricity Rate for 2013/14 approved and communicated
57

Programme 1: Setting and/or approval of tariffs and prices (2)
Programme KPI
Annual approved report on Eskom’s actual revenue recovery
Annually approved Regulatory Financial
Reports of Eskom
Target for 2013/14
Annual report on Eskom’s actual revenue recovery
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
58

Programme 2: Licensing and Registration
• Processing of licence applications
59

Programme 2: Licensing and Registration
Programme KPI
% of licence applications processed within statutory time frames
Target for 2013/14
80% of licence applications processed within 120 days from application
60

Programme 3: Compliance Monitoring and
Enforcement
• Conducting of compliance audits; and
• Monitoring implementation of action plans arising from compliance audits.
61

Programme 3: Compliance monitoring and enforcement
Programme KPI
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
Target for 2013/14
10
10
5
Annual report on state of compliance in the electricity industry published
62

Programme 4: Dispute resolution, including mediation, arbitration and handling of complaints
• Resolution of complaints
63

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 Annual report on the trends regarding to and status of complaints in the electricity and status of complaints in the industry published electricity industry published
64

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.
65

Programme 5: Setting of rules, guidelines and codes for the regulation of the electricity industry (1)
Programme KPI
% 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
Target for 2013/14
80%
80%
Updated grid code Annually published updated
Grid Code
66

Programme 5: Setting of rules, guidelines and codes for the regulation of the electricity industry (2)
Programme KPI
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
Target for 2013/14
1
1
1 Number of action plans for the annual EEDSM audits
Number of reports on the performance and progress of Renewable Energy
4
67

Programme 6: Establishing NERSA as an efficient and effective regulator
• Establishment of end-user forums
68

Programme 6: Establishing NERSA as an efficient and effective regulator
Programme KPI
Number of end-user forums established
Target for 2013/14
5
69

II. PIPED-GAS INDUSTRY REGULATION
70

NUMBER OF KPI’S PER PROGRAMME
71

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.
72

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 information

Programme 1: Setting and/or approval of tariffs and prices (2)
Programme KPI
Number of days for completing the calculation of aggregate prices of gas for each province in line with legal requirements
Target for 2013/14
Approval of aggregate prices of gas for 2012 in each province within 120 days after receipt of the relevant information
74

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.
75

Programme 2: Licensing and Registration
Programme KPI
% of all licence applications finalized according to licensing procedures
Number of days taken to finalise registration applications
Target for 2013/14
50%
Annual reports on the implementation of gas to power in
IRP
100% of registration applications are processed within 60 days and approved within 90 days.
Draft implementation framework developed and communicated
76

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.
77

Programme 3: Compliance Monitoring and Enforcement
Programme KPI
Number of monthly volume balance reports assessed and discrepancies investigated
Number of audits on the ROMPCO pipeline conducted
Target for 2013/14
12
2
Number of investigations / inspections conducted
4
Quarterly monitoring reports on RRM
Compliance
Evaluation reports on uncommitted capacity in transmission pipelines
Full year financial reports submitted by
50% of licensees included in the pilot project
ROMPCO + 1
78

Programme 4: Dispute resolution, including mediation, arbitration and handling of complaints
• Resolution of received complaints; and
• Finalisation of investigations.
79

Programme 4: Dispute resolution, including mediation, arbitration and handling of complaints
Programme KPI
% 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)
Target for 2013/14
50%
50%
80

Programme 5: Setting of rules, guidelines and codes for the regulation of the pipedgas industry
• Developed, approved and implemented HDI scorecard.
81

Programme 5: Setting of rules, guidelines and codes for the regulation of the piped-gas industry
Programme KPI
Developed, approved and implemented
HDI scorecard
Target for 2013/14
Approved HDI scorecard implementation framework
82

Programme 6: Establishing NERSA as an efficient and effective regulator
• Proposed amendments to legislation and other engagements with policy maker; and
• Stakeholder workshops.
83

Programme 6: Establishing NERSA as an efficient and effective regulator
Programme KPI
Ongoing engagements with policy makers
Number of stakeholder workshops and media engagements
Target for 2013/14
Continued engagement policy makers and comment on legislative amendments where applicable
4
84

III. PETROLEUM PIPELINES INDUSTRY
REGULATION
85

NUMBER OF KPI’S PER PROGRAMME
86

Programme 1: Setting and/or approval of tariffs and prices
• Setting of pipeline tariffs (Transnet and others);
• Approval of storage and loading facility tariffs.
87

Programme 1: Setting and/or approval of tariffs and prices
Programme KPI
Number of pipelines tariffs applications approved
Target for 2013/14
Approved Transnet pipeline tariffs for 2014/15
Approved tariffs for Chevron
% of licensed storage and loading facilities’ tariffs approved
40%
Updated published storage tariff
Annual Report on benchmarking of storage tariffs
Updated published financial and information
Published storage tariffs
Conduct a benchmark study on storage tariffs
Financial and tariff information published on NERSA website
88

Programme 2: Licensing and Registration
• Processing of licence applications; and
• Investigation of suspected unlicensed activities.
89

Programme 2: Licensing and Registration
Programme KPI
% of licences approved within statutory deadlines
Number of suspected unlicensed facilities investigated
Target for 2013/14
100%
5
90

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.
91

Programme 3: Compliance Monitoring and Enforcement
Programme KPI
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
Target for 2013/14
2
90%
70%
70%
2
92

Programme 4: Dispute resolution, including mediation, arbitration and handling of complaints
• Resolution of complaints
93

Programme 4: Dispute resolution, including mediation, arbitration and handling of complaints
Programme KPI
% of complaints received investigated and concluded in line with legal requirements
Target for 2013/14
100% of complaints received investigated and reported on within 60 days.
94

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
95 different Acts and government policies and regulations.

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
Approved tariff guidelines for storage facilities published on NERSA website
Updated annual tariff guidelines for storage facilities published on NERSA
Approved annually reviewed FAQ published
Approved guidelines to determine the
SRAB of storage facilities published
Approved Minimum Information
Requirements for Tariff Applications
(MIRTA) published website
Approved reviewed FAQ published on
NERSA website
Guidelines to determine the SRAB of storage facilities published
Approved updated MIRTA published on
NERSA website
96

Programme 5: Setting of rules, guidelines and codes for the regulation of the petroleum pipelines industry (2)
Programme KPI
Number of reports on contributions towards alignment between Petroleum
Pipelines Act and Petroleum Pipelines
Levies Act and government policies and regulations
Target for 2013/14
Quarterly
97

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.
98

Programme 6: Establishing NERSA as an efficient and effective regulator
Programme KPI
Approved 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
Approved RRM for non-financial information (NFI) Volume 7
Target for 2013/14
Implementation plan for the findings and recommendations in the Report on investigated infrastructure and bottlenecks in the petroleum pipelines infrastructure in Durban
Biannual
Finalised RRM for NFI
99

IV. CROSS-CUTTING REGULATION
100

NUMBER OF KPI’S PER PROGRAMME
101

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.
102

Programme 6: Establishing NERSA as an efficient and effective regulator (1)
Programme KPI
Benchmark report on regulatory decisions by category
Report on the impact of regulatory decisions
Research reports on new sources of energy
Published quarterly newsletters
Target for 2013/14
Benchmark report on regulatory decisions by category
Approved framework for conducting impact assessment
Research reports
Quarterly newsletters published
Number of stakeholder engagement and education programmes conducted
25
103

Programme 6: Establishing NERSA as an efficient and effective regulator (2)
Programme KPI
Approved proposals / comments on policy changes
Target for 2013/14
Approved proposals / comments on policy changes (if and when necessary)
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V. ORGANISATIONAL
105

NUMBER OF KPI’S PER PROGRAMME
106

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.
107

Programme 6: Establishing NERSA as an efficient and effective regulator (1)
Programme KPI
% of targets in the Annual Performance
Plan met
% of organisational structure filled
Target for 2013/14
Baseline to be determined in 2012/13
95%
% of staff undergoing training and development
Level of (%) customer satisfaction
80%
68%
Result of annual audit
% of creditors paid within 30 days after all relevant documentation have been received
Unqualified
100%
108

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• According to Section 13 of the National Energy Regulator
Act, all accounts for the three regulated industries have to be ring-fenced o all direct costs attributable to an industry are allocated to that industry o 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%
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BUDGET AND FUNDING FOR 2013/14
Expenditure Income Levies
Electricity
Piped-Gas
Petroleum
Pipelines
Other
Total
R159 225 099
R56 942 531
R59 739 715
R275 907 345
R137 043 936
R48 808 067
R50 933 740
R39 121 602*
R275 907 345
0.05468 c/kWh
30.166 c/GJ
0.28777 c/l
*Over recovery from previous years from regulated industries
– approved by National Treasury
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Programme
PROG 1 - Setting and/or approval of tariffs and prices
PROG 2 - Licensing and
Registration
PROG 3 - Compliance monitoring and enforcement
PROG 4 - Dispute resolution including mediation, arbitration and the resolution of complaints
PROG 5 - Setting of rules, guides and codes for regulation
PROG 6 - Establishing NERSA as an efficient and effective organisation
Total per Industry
NATIONAL ENERGY REGULATOR OF SOUTH AFRICA
Budget per programme
2013/14
Electricity Piped-Gas
Petroleum
Pipelines
51 820 027
23 216 712
15 477 808
10 318 539
40 070 485
18 321 528
159 225 099
12 358 916
7 867 285
7 867 285
1 866 190
10 697 091
16 285 764
56 942 531
26 623 264
11 974 737
8 708 092
3 110 072
3 776 296
5 547 255
59 739 715
Total per
Programme
90 802 206
43 058 734
32 053 185
15 294 801
54 543 872
40 154 547
275 907 345
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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.
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visit us at www.nersa.org.za
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