Contents and... · 2019-12-13 · Account (RCA) process. NERSA develops benchmarks to ensure that...

NEWSOfficial Newsletter of the National Energy Regulator of South Africa Volume XI, Edition II, April - June 2016

Contents

Editor’s NoteWe hit the ground running!

From the desk of the CEOOff to a fine start in the new financial year

New Guidelines on resaleShedding light on resale

Municipal Tariff guidelines and Benchmarks 2016/17 Municipal Tariff increase for 2016/17 financial year

NERSA monitor electricity systemElectricity Trends

Public hearingsTaking pertinent issues to the public

Tariff Methodology for Petroleum Loading Facilities and Storage FacilitiesRevised tariff methodology ticks the right NERSA boxes Ex-post Regulatory Impact Assessment concerning the Mozambican Gas Pipeline Successes in the pipeline

Visit• Continental activity continues apace• High-level visit – ZERA Public workshop/ EducationPresenting a positive picture

Employee Interest • Opening the eyes of pupils countrywide• ‘Techno Girl’ programme for 2016• Safety take centre stage• Employment Equity – getting clued up• Performance Management – the key to a successful company

Events Uniform in our solidarity with heroes of 16 June 1976 Calendar of Events Programme for July - September 2016

12

34

578

9

12

12

13

17

18

INSIDE OUT,reflecting our outward-bound activities...

OUTSIDE IN,a glimps at our internal activities…

1 April - June 2016

Editor’s Note

Mr Charles Hlebela

The activities covered in this issue of Nersa News are proof that we are off to a running start in the 2016/17 financial year.

Many important decisions have been made since April, most notably the guideline increase of 7.64% and associated benchmarks for municipal tariffs, as well as the revised tariff methodology for Petroleum Loading Facilities and Storage Facilities.

There is general consensus on the success of the impact assessment conducted on the Mozambican Gas Pipeline Agreement between South Africa and Sasol. The agreement, signed in 2001, was a significant one for both countries, as it facilitated the implementation of the Sasol Mozambique natural gas project.

Also in the pages that follow is useful and essential information on key workplace issues such as safety and employment equity.

Did you know, for example, that around the world, there are 6 300 deaths per day from workplace incidents and accidents? That’s a staggering 2.3 million a year. Obviously there is much work to be done in this area and everyone needs to play their part.

We also ask if you know enough about your rights and responsibilities in terms of employment equity. This is another important issue and essential knowledge for every South African employee.

We shine the spotlight on the importance of performance management to the business process mix of successful companies.

Enjoy sharing our news this quarter and please remember that suggestions on stories and topics of interest that you would like to see featured are always welcome.

All comments and contributions can be sent through to [email protected]

Until next time, keep warm and keep up the good NERSA work.

Best wishesCharles Hlebela

Visit our website at www.nersa.org.za for updates on our activities, public hearings and event calendar.

We hit the ground running!

Newsletter contributors:

Our thanks go to:Bianka Belinska | Buyiswa Bingwa | Faizal Karani | Florence Mosehathebe | Linda Nkuna

Mmoni Serumula | Nokwazi Hlubi | Nomalungelo Simelane | Nthabiseng Mapitsing | Patricia Bahula

Peter Buys | Tabisa Nkopo | Tutu Maluleke | Fhumulani Nenzhelele | Yvette van Zyl | Wanda Langenhoven

Phone: 012 401 4600Fax: 012 401 4700Physical Address: Kulawula House,526 Madiba Street, Arcadia, PretoriaPostal Address: PO Box 40343,Arcadia 0007, South Africa

Publisher: Corporate ServicesEditor: Charles HlebelaSub-editor: Poppie MahlanguWriter: Susan Unsworth Design, Layout and Printing:Msomi Africa Communications

ISSN: 2221-898XKey Title: NERSA NewsAbbreviated Key title:NERSA News

This publication is produced by NERSA Corporate Services and may not be reproduced without the written consent of NERSA

2The Official Newsletter of the National Energy Regulator of South Africa

From the desk of the CEO

Mr Paseka Nku

Off to a fine start inthe new financial year

South Africa’s people face many adversities, especially those associated with the challenging economic environment in which we live at present. Daily pressures can be overwhelming and NERSA has a role to play in ensuring that the industries that power the economy do their best to limit their contribution to the weight on citizens’ shoulders.

I am pleased to report that we at NERSA can reflect with pride on the achievements of the first quarter, as we met 96% of our targets, a 4% increase over our performance for the corresponding period last year. Particularly of note was our 100% achievement against organisational targets – a marked improvement on the 75% of the first quarter of 2015/16.

The Piped-Gas Division could not achieve all its targets as a result of external challenges due to a faulty meter in Mozambique that prevented Sasol Gas from measuring and calculating gas volumes for April and May 2016. A remedial action plan is in place. That aside, the Division was able to approve applications for 12 licences and a registration application for a biogas production facility. We also carried out 18 site inspections to monitor compliance.

Among the first quarter highlights in electricity industry regulation was the approval of the free basic electricity rate for implementation on 01 July, as well as the approval of 19 generation licences and one distribution licence.

Petroleum pipelines regulation activities included the finalisation of nine pipeline and storage facilities tariff applications and three licence applications. The application by TotalGaz for 17 liquefied gas storage licences was declined. The licence conditions of three licensees were reviewed and the licences of six others were revoked.

Interconnection agreements between licensed activities in Saldanha Bay could not be finalised during the quarter, however guidelines were prepared to evaluate these interconnections. A final report from the engineering consultants was noted and a training session will be undertaken by staff.

As we headed into the second quarter, third-party access to uncommitted storage capacity remained problematic. A new entrant third-party submitted information outlining challenges in obtaining access to licensed facilities. NERSA is verifying the claims to determine if further investigation is needed.

All in all, we have kicked off 2016/17 with style – a style that I am confident will soon become a constant way of life for the NERSA team.

Thank you, colleagues, for your dedication to duty and your efforts to exceed expectations whatever the job demands.

Onward and upward!

Warm regardsPaseka NkuActing Chief Executive Officer

We headed into the 2016/17 financial year full of enthusiasm for the tasks ahead and with a renewed commitment to building on the work of the previous year in our bid to make NERSA an ever stronger force for good in the economy.

96%Achieved

of ourtargets

4%increase in

performance100%Achieved

organisationaltargets

3 April - June 2016

INSIDE, REFLECTING OUTWARDS ...In the front section of our quarterly newsletter we provide readers with an ‘inside, reflecting outwards’ perspective of NERSA’s challenges and achievements, as well as our work-in-hand and the status of our regulatory activities as they affect our stakeholders and the public at large.

New Guidelines on resale

SHEDDING LIGHT ON RESALE

The guidelines cover several topics, including registration requirements, tariff principles, complaints and dispute resolution, as well as exclusions.

The document provides electricity resale principles until the Electricity Licensing Regulations have been completed. It will be revised from time to time to include lessons learnt from its implementation.

The resale of electricity in the South African electricity supply industry (ESI) is a growing business. Section 7 of the Electricity Regulation Act, 2006 (Act No. 4 of 2006) makes provision for the licensing of generation, transmission, distribution, export or import and trading activities by the Energy Regulator.

Electricity resale by default falls under trading, where the buying and/or selling actually takes place. However, in South Africa, the resale of electricity remains ‘unregulated’ as businesses involved in electricity resale activities are not licensed or registered with any regulatory authority.

Why resellers should be regulated:• to ensure that where electricity is resold to persons by non-licensed entities, it takes place

in an environment that is efficiently regulated in terms of standards of supply and service, tariffs and other related matters;

• to establish an environment where the licensed authorities can effectively perform, monitor and carry out the supervision of electricity reselling;

• to ensure that resellers have the resources they need so that they can and do satisfy the ongoing needs of the end users they supply; and

• to create a regulatory framework to help with the regulation of electricity resale in South Africa to make sure that resellers comply with policy.


Municipal Tariff guidelines and Benchmarks 2016/17

Tariff guidelines 2016/17

This followed a workshop that was held on 06 April 2016 at Emperors Palace in Gauteng, which provided more than 100 stakeholders with clarification on how the guideline increase and benchmarks were developed.

The increase is based on bulk purchase costs that have been increased by 7.857% in line with Eskom’s tariff increase to municipalities. Repairs and maintenance, capital charges and other costs were increased by the consumer price index (CPI) of 6.6%, and salaries and wages by CPI plus 1%.

Municipal tariffs are approved annually based on applications by licensees. The process is dependent on the approved Eskom prices under the Multi-Year Price Determination (MYPD) or Regulatory Clearing Account (RCA) process. NERSA develops benchmarks to ensure that municipalities charge reasonable and comparable prices. Eskom’s tariffs were considered in developing the benchmarks and a mark-up was added to compensate for the costs of distribution.

This year’s decision, which came into effect on 01 July 2016, will assist municipalities in preparing their tariff reviews. The guideline is not an automatic increase in tariffs and licensees are still required to apply to the Energy Regulator for approval of their tariffs in accordance with the provisions of Section 16(2) of the Electricity Regulation Act, 2006 (Act No. 4 of 2006) before implementation.

Licensees applying for an above-guideline increase will have to justify the increase, providing a detailed plan on the additional funds. The approved funds must be ring-fenced to ensure that they are used strictly for the identified projects and municipalities must report to NERSA six-monthly on how the funds are used. Nine municipalities applied for above-guideline increases.

A guideline increase of 7.64% and associated benchmarks for municipal tariffs were approved for the 2016/17 financial year.

NERSA develops benchmarks to ensure that municipalities charge reasonable and

comparable prices.

NERSA staff presenting to stakeholders during the workshop on guideline increase & benchmarks

5 April - June 2016

ELECTRICITY TRENDS

NERSA monitor electricity system

According to the latest quarterly bulletin, based on Eskom reports, the energy that has been sent out for the year to date stands at 91 097 GWh, compared to 232 605 GWh for the entire 2015 year. This represents a -6.34% growth since 2007. The average plant performance is 74.76% for the year to date, compared to 70.79% for 2015.

The bulletin is published in terms of NERSA’s mandate to monitor the supply/demand balance of the electricity system to achieve efficient, effective, sustainable and orderly development and operation of the electricity supply infrastructure in South Africa. The publication covers historic and current generation system adequacy and performance, as well as capacity outlook for the near future.

The trends in the supply and demand of power in South Africa as at 31 May 2016 are shown in the table below.

ENERGY SENT OUT & PEAK DEMAND

Parameter UnitsCALENDAR YEAR

2007 2008 2009 2010 2011 2012 2013 2014 2015 YTD 2016

Energysent out GWh 245 610 240 096 235 328 244 370 244 885 238 857 236 219 233 777 232 605 91 097

Energysent out growth from 2007

% -2.245% -4 186% -0.505% -0.295% -2.750% -3.82% -4.82% -5.30% -6.34%

Peak Demand MW 35 513 35 959 35 845 36 664 36 219 35 527 34 979 34 768 32 985 33 187

Peak demand growth from 2007

% -1.52% -1.83% 0.14% -0.81% -2.70% -4.20% -4.78% -9.66%

Annual LF - 0.768 0.768 0.749 0.761 0.772 0.767 0.771 0.76 0.759

A snapshot of the system performance in the period from 2013 to 2016 is provided in the table below.

AVERAGE PLANT PERFORMANCE

PLANT PERFORMANCE

PCLF UCLFTotal

capacity inavailable

PCLF UCLFTotal

capacity inavailable

EAF

YEAR MW MW MW MW MW MW MW

2013 4 015 4 993 9 008 9.54% 11.86% 21.39% 78.61%

2014 4 157 5 189 9 346 9.87% 12.32% 22.20% 77.80%

2015 5 592 6 706 12 301 13.28% 15.93% 29.21% 70.79%

YTD 2016 4 695 6 216 10 911 10.86% 14.38% 25.24% 74.76%


The historic capacity outlook is illustrated in the table below.

HISTORIC CAPACITY OUTLOOK 2008-2015

CAPACITY (MW) AND CAPACITY MARGINS (%) AT ANNUAL PEAK

YEA

R

Ann

ual P

eak

Dem

and

Esko

m

Esko

m In

stal

led

Cap

acity

IMPO

RT C

APA

CITY

Firm

MW

Tota

l Esk

om in

stal

led

Cap

acity

plu

s Im

ports

Esko

m p

urch

ases

excl

udin

g RE

Rene

wab

le (R

E)in

clud

ing

Sere

OTH

ER n

on-E

skom

capa

city

Tota

l Esk

om c

apac

ity

incl

udin

g im

ports

, oth

er &

20%

RE

Dem

and

Mar

ket

parti

cipa

tion

(DM

P)M

YPD2

EE &

DSM

(MYP

D1 &

2)

Esko

m R

eser

ve M

argi

n(e

xclu

ding

RE

& ot

her

purc

hase

s

Esko

m R

eser

ve M

argi

n(in

clud

ing

impo

rts, R

E&

othe

r pur

chas

es

MW MW % MW MW MW MW MW MW MW % %

2008 36 139 38 844 1 138 39 982 39 982 590 916 10.63% 10.63%

2009 35 910 40 544 1 138 41 682 41 682 590 372 16.07% 16.07%

2010 36 970 40 981 1 138 42 119 517 42 636 467 289 19.93% 15.33%

2011 36 212 41 201 1 138 42 339 862 43 201 570 301 16.92% 19.30%

2012 35 895 41 696 1 500 43 196 1 142 44 338 651 447 20.34% 23.52%

2013 34 979 41 975 1 500 43 475 1 327 1 593 46 395 3 108 379 28.08% 32.64%

2014 34 590 42 308 1 500 43 808 13 1 212 1 500 45 563 1 737 294 26.69% 31.72%

2015 32 985 42 308 1 500 43 808 13 1 212 1 500 45 563 187 32.85% 38.13%

The Eskom medium-term capacity outlook is illustrated in the table below.

ESKOM MEDIUM-TERM DEMAND FORECAST

CAPACITY (MW) AND CAPACITY MARGINS (%) AT ANNUAL PEAK

YEA

R

Ann

ual P

eak

Dem

and

Esko

m

Esko

m In

stal

led

Cap

acity

IMPO

RT C

APA

CITY

Firm

MW

Tota

l Esk

om in

stal

led

Cap

acity

plu

s Im

ports

Esko

m p

urch

ases

excl

udin

g RE

Rene

wab

le (R

E)in

clud

ing

Sere

OTH

ER n

on-E

skom

capa

city

Tota

l Esk

om c

apac

ity

incl

udin

g im

ports

, oth

er &

20%

RE

Dem

and

Mar

ket

parti

cipa

tion

(DM

P)M

YPD2

EE &

DSM

(MYP

D1 &

2)

Esko

m R

eser

ve M

argi

n(e

xclu

ding

RE

& ot

her

purc

hase

s

Esko

m R

eser

ve M

argi

n(in

clud

ing

impo

rts, R

E&

othe

r pur

chas

es

MW MW % MW MW MW MW MW MW MW % %

2016 40 087 46 197 1 500 47 697 1 018 1 515 1 538 50 556 196 21.52% 26.12%

2017 41 108 48 364 1 500 49 864 1 018 1 515 1 538 52 723 415 23.78% 28.25%

7 April - June 2016

Public Hearings

TAKING PERTINENT ISSUESTO THE PUBLIC

On 02 June, a hearing was conducted on the Multi-Year Price Determination Methodology, following pre-hearings with Eskom, the South African Local Government Association (SALGA), Organisation Undoing Tax Abuse (Outa) and Afribusiness.

The following day, subsequent to a pre-hearing with the municipalities in the NERSA auditorium, the matter of municipal tariff applications was tabled, with municipalities applying for average increases above the NERSA guideline of 7.64%. Nine municipalities were involved, asking for increases ranging from 9.4% to 26.29%.

The City of Cape Town Municipality’s application to take over electricity supply to Paardevlei in Somerset West, previously supplied by AECI Limited, was the discussion point at the 27 May hearing.

Also on 27 May, the spotlight fell on the City of uMhlathuze Municipality’s application for a licence amendment to include Water Stone Development, Hillview, Empangeni Rail, Empangeni Business Park and John Ross Eco-Junction into its area of electricity supply. Also on the agenda was uMjindi Local Municipality’s application to amend its licence to include Sheba Village into its area of electricity supply.

Public hearings are an important part of NERSA’s work, as they inform interested parties of issues that will affect them and the country. Several such hearings were held in recent months.

NERSA is proud to follow the principles of integrity and transparency by including public participation through public hearings in its decision-making processes.

Public hearing on City of Cape Town Municipality’sapplication to take over electricity supply

Paardevlei in Somerset

Stakeholders at public hearing onabove-guideline increases

Stakeholder presenting at public hearing on Multi-Year Price Determination Methodology


REVISED TARIFF METHODOLOGY TICKS THE RIGHT NERSA BOXES

The revisions were necessary following the government’s gazetting of amendments to the Regulations of the Petroleum Pipelines Act, 2003 during 2015. The new tariff lowers the regulatory burden on licensees by offering simpler and more rapid processing of tariff application options. In addition, they place the valuation of different storage assets on a similar footing, achieving similar tariffs and consequently improving the prospects of competition.

They also bring greater harmonisation among NERSA’s tariff methodologies for the electricity, piped-gas and petroleum pipelines sectors.

During May, a workshop on the topic was held for affected stakeholders, during which NERSA explained the interpretation of the methodology, its elements and the practical implications of implementing the new methodology.

The previous methodology was amended due to the following reasons:

• historical records were unavailable or unreliable;

• the ranges in useful life from seven years to 80 years for the same category of assets influenced the trended original cost (TOC) calculations;

• build, own, operate and transfer (BOOT) type agreements created problems when actual useful life was applied.

• the resulting tariffs were different for the same type of service facilities.

• the jurisdiction for storage overlapped with that of the Department of Energy (DoE);

• the DoE used a different methodology (replacement cost, no depreciation);

• there were concerns about the accuracy of some storage tariffs; and

• TOC calculations were difficult and cumbersome.

With the new methodology, licensees will have three options when calculating allowable revenue and tariffs:

• Comprehensive option [if actual investment costs are available, indexed original cost (IOC), and if not available, replacement value (RV)];

• Standard cost option 1 (standard volumes, costing and tariffs); or

• Standard cost option 2 (own volumes and tariff design).

NERSA has approved the revised Tariff Methodology for Petroleum Loading Facilities and Storage Facilities.

Public Hearings

Stakeholders registering and attending the workshop onrevised Tariff Methodology

9 April - June 2016

Mozambican Gas Pipeline

SUCCESSES IN THE PIPELINE

The agreement, signed in 2001, enabled the implementation of the Sasol Mozambique natural gas project, which involved the development of the Pande and Temane gas fields, the associated gas production facilities, and the cross-border gas transmission pipeline between South Africa and Mozambique to transport the natural gas to South Africa. Signed in the absence of a legislative framework to regulate the piped-gas industry in South Africa, the agreement served as a legal instrument to regulate Sasol’s piped-gas activities for 10 years, from March 2004 to March 2014. It also amalgamated the different sets of objectives that the government and Sasol individually intended to achieve through this project.

The assessment was based on a desktop study, and a series of stakeholder consultations (both in South Africa and Mozambique) through interviews, a survey and written submissions. It set out to assess whether the objectives of the agreement had been achieved, and to identify, assess and quantify the impacts that could be directly or indirectly attributed to the agreement. The report is intended to assist NERSA and the policymaker to understand the impacts of the system of regulation by contract and to ascertain its effectiveness for future policy and regulatory decisions concerning the gas sector.

The assessment revealed that:

• Mozambique gas has been monetised;

• natural gas was introduced in the South African economy at the lowest cost and as fast as possible;

• the guarantees provided to Sasol enabled the company to continue to invest in the industry;

• regional trade and growth was promoted,

particularly the bilateral gas trade between South Africa and Mozambique;

• security of supply was secured for the Sasol plants in Secunda and Sasolburg; and

• diversification of energy sources was promoted, however despite the increase in gas supply by 214% from 49.7 MGJ/a in 2004 to 156 MGJ/a in 2014, gas still contributes less than 5% in the country’s energy mix.

Areas identified as lacking were:

• the orderly development of a commercial and competitive piped-gas industry with active participation by the private sector; and

• the empowerment of historically disadvantaged South Africans (HDSAs) in the industry.

Six issues, namely weak gas supply obligation, vertical integration in the gas business, exclusivity in gas distribution, promotion of HDSAs, inadequate competition in the piped-gas industry, and regulatory challenges on cross-border gas trading, continue to stifle effective development in the industry. These issues are supplementary to the conventional challenges of inadequate gas supply and infrastructure impeding development in the industry, which the government is already taking initiatives to address. These initiatives include policy responses such as the gas utilisation master plan and the gas Independent Power Producer procurement programme designed by the Department of Energy.

The report outlines the necessary steps to address the abovementioned inherent issues and the need to contribute towards the development of appropriate policies and continuous improvement of the legislative/regulatory frameworks to further the development of the piped-gas industry.

An overall success.That is the overriding finding of the impact assessment conducted on the Mozambican Gas Pipeline Agreement between South Africa and Sasol.


Visit

CONTINENTAL ACTIVITYCONTINUES APACE

• Regional Electricity Regulators Association (RERA):

- NERSA attended the RERA subcommittee, portfolio committee and executive committee meetings in Namibia from 04 to 20 April.

- Later, NERSA was asked to sit on the International Organising Committee for the RERA annual conference and Annual General Meeting, scheduled for 07 to 11 November in Maseru.

• Zimbabwe Energy Regulatory Authority (ZERA):

- At the request of the Department of Energy (DoE), NERSA participated in a technical meeting on 04 May with a delegation from the Zimbabwe Ministry of Energy and ZERA to discuss and finalise a cooperation agreement between the two countries.

- Subsequently, NERSA hosted a delegation from ZERA from 05 to 06 May. The delegation learnt about Internal Audit systems and processes.

• African Forum for Utility Regulators (AFUR):

- NERSA, as an AFUR executive committee member, was invited to the launch of the African Centre of Excellence for Infrastructure Regulation (ACEIR) on 23 May 2016. ACEIR is a joint initiative of AFUR and the New Partnership for Africa’s Development (NEPAD) Agency that promotes capacity building, research and information sharing in infrastructure regulation.

- In the following month, NERSA participated in the AFUR sectoral and executive committee meetings in Cote d’ Ivoire from 01 to 02 June. The sectoral committees discussed short-term planned activities, while the executive committee tabled the financial status of AFUR and its significant progress in achieving formal recognition as an organ of the African Union.

• Other:

- On 15 June, NERSA met with Dr Peter Zhou, a consultant engaged by the South African Development Community (SADC) secretariat to develop the SADC Renewable Energy and Energy Efficiency Strategy and Action Plan.

- NERSA also attended the SADC senior energy officials meetings from 17 to 19 June in Botswana at the SADC ministerial workshop on the energy and water crisis in the region on 20 June 2016, which was followed the day after by the 35th SADC energy ministers meeting.

NERSA remained prominent on the continental stage over the past three months,which kept the International Coordination and Planning Department on its toes.

NERSA Acting CEO Mr Paseka Nku, staff anddelegates from NARUC & ERA

Activity highlights included the following:

11 April - June 2016

- At the DoE’s request, NERSA participated in a meeting with a Namibian delegation focusing on renewable energy issues on 24 June and with a Botswana delegation on petroleum issues four days later.

NERSA staff presenting during the meetingwith NARUC & ERA

- At the request of National Association of Regulatory Utility Commissioners (NARUC), two officials from Electricity Regulatory Authority (ERA) Uganda visited NERSA from 27 June to 01 July to learn about its Regulatory Reporting Manuals and accounting procedures. This was followed by a workshop in Uganda from 11 to 13 July aimed at finalising the ERA’s uniform system of accounts.

Furthermore, a high-level delegation from ZERA will liaise with NERSA during their upcoming visit to Pretoria for information sharing purposes and discussions on corporate governance issues.

Delegate from SADC, Mr Peter Zhou (third on left row) and NERSA sraff


Visit

HIGH-LEVEL VISITS – ZERA NERSA’s counterpart north of Limpopo, the Zimbabwe Energy Regulatory Authority (ZERA), visited NERSA during May for discussions on auditing and licensing matters.

The two-day visit is the latest among many visits from high-level delegations from across the continent as well as further afield, aimed at fact finding and sharing best practices.

ZERA is a relatively young organisation, having been founded in 2011, and has visited NERSA previously to learn about the South African energy regulatory environment and gain insights into NERSA’s human resource strategies and policies.

During the first day of the visit headed by ZERA’s Rumbidzai Musiyiwa, the discussion centred on the processes involved in internal audit planning and reporting, as well as risk management. On day two, delegates were given an overview of electricity licensing, compliance and dispute resolution. Particular

Public Workshop / Education

PRESENTING APOSITIVE PICTURE Customer awareness continues to be an integral ingredient in the NERSA marketing mix, as it enables NERSA to communicate far and wide about the importance of energy regulation and its impact on the South African economy.

Regular workshops empower stakeholders with relevant energy industry and regulation knowledge and information. During the last quarter, 12 sessions

emphasis was placed on types and terms and conditions of licences, standing operating procedures on compliance, monitoring and enforcement, and regulatory risks and controls.

Over many years, NERSA has nurtured mutually beneficial relationships with like-minded organisations and remains committed to imparting its knowledge on younger regulatory authorities to aid in their success.

were held across seven provinces, exceeding the scheduled nine workshops.

Those who attended were made aware of issues such as the escalating costs of electricity, inclining block tariffs, theft of electricity, quality of service and supply, and participation in NERSA public hearings on pricing determination.

NERSA staff with ZERA delegates during discussions on auditing and licensing matters

were enlightened about the important role of NERSA during workshops held between April and June 2016.

South Africans1 100More than


OUTSIDE, LOOKING IN ...The second section of our quarterly newsletter provides readers with an ‘outside in’ perspective of NERSA’s people and their activities during the previous quarter and how NERSA’s values and goals drive its vision of being a world-class energy regulator.

Employee Interest

OPENING THE EYES OFPUPILS COUNTRYWIDEThe Cell C Take a Girl Child to Work Day has become something of aninstitution in South African workplaces over the last 14 years.

The campaign opens the eyes of grades 10 to 12 female pupils to the many career opportunities available to young talent today.

Over the years, more than 2 400 companies and government departments have participated in the initiative. NERSA is no exception, providing the youngsters with an overview of the crucial role played by the Regulator in the backbone of the South African economy – its energy infrastructure.

This year, on 26 May, NERSA hosted 25 young girls who were familiarised with different departments within NERSA through comprehensive presentations by representatives from these departments. The visitors sat with managers and were treated to a glimpse into the inner workings of NERSA.

‘The day opens up a world of hope and dreams that inspires girls to work hard for their goals,’ says NERSA Acting Chief Executive Officer, Paseka Nku. ‘It goes a long way towards making their dreams and plans tangible and is a practical step towards enabling them to make the connection between what they learn at school and their career plans.’

NERSA also expresses its commitment to young female talent through its three-year Techno Girl programme, which is aimed at empowering disadvantaged pupils to take up a career in science, technology, engineering and mathematics fields.

NERSA Acting CEO Mr Paseku Nku, staff and female learners during the Cell C Take a Girl Child to Work Day


‘Techno Girl’programme for 2016NERSA’s Job Shadowing or ‘Techno Girl’ programme started from 27 June to 01 July 2016. The Techno Girl programme is a three-year programme aimed at encouraging young disadvantaged girls to take up a career in the Science, Technology, Engineering and Mathematics fields.

Employee Interest

SAFETY TAKES CENTRE STAGE

This equates to 6,300 deaths a day or a staggering 2.3 million a year. Around 317 million workplace accidents occur annually. The economic burden of poor occupational health and safety practices is estimated at 4% of global Gross Domestic Product each year.

These eye-opening figures from the International Labour Organisation (ILO) bring home just how important sound health and safety practices are to company life.

As a responsible corporate citizen, NERSA believes its employees need to be informed and be aware of risks and precautions. With this in mind, NERSA recently ran awareness sessions at its offices. The initiatives, which took place over three days, coincided with the ILO’s April theme of ‘Stress in the workplace’.

Natalie Skeepers of Global Safety Resources addressed pertinent issues such as compliance with health and safety rules, emergency procedures, house rules and hazardous substances, concluding the sessions with an entertaining fitness workout.

In terms of the Occupational Health and Safety Act of 1993, employees need to be provided with relevant knowledge and information to enable them to adhere to rules and legislation, adopt good practices and keep abreast of how research outcomes inform and support occupational health and safety decision-making, intervention, evaluation and safety performance measurement.

It is an investment NERSA is more than happy to make in the interest of a safe and happy workplace for all.

Human Resource staff and female learners from Hammanskraal and Mamelodi schools

at the start of the Techno-Girl programme

Every 15 seconds, across the world, a worker dies from a work-related accidentor disease and 153 workers have a work-related accident.

Ms Natalie Skeepers from Global Safety Resources addressing NERSA staff about issues

on health and safety


EMPLOYMENT EQUITY – Getting Clued Up

Employee Interest

Race, gender, disability and other diversity issues are all factors that have denied the majority of South Africans access to opportunities for education, employment, promotion and wealth creation.

Hence the Employment Equity Act, whose aim is to foster and promote sound and fair workplace practices to correct past imbalances and create a workforce that reflects the demographics of the country. Legislation has, however, resulted in certain workplace problems that must be addressed in the interest of understanding and harmony.

Managers, supervisors and employees need to be aware of EE issues. Did you know, for example, that the Act makes it possible for employees to question employers on EE issues or that all employees must be informed about the content and application of the Act?

This is outlined in Section 16, which states that ‘all employees must be informed of the content and application of the Act, including employment equity and anti-discrimination issues, the process to be followed by the employer, and the need for the involvement of all stakeholders as preparation for their participation and consultation’.

Furthermore, the Act requires reporting on any training and awareness creation related to EE.

As an employee in South Africa, it is in your best interest to be aware of the following:

• the stipulations of the EE Act and the relevance of current legislation;

• the function of the EE forum and skills development forums;

• the roles of the members of these forums;

• that the company needs to consult through forum members on EE and skills-related issues;

• what your company is doing in relation to EE and skills development;

• issues of diversity and/or discrimination;

• the advantages of your participation in the process;

• EE and anti-discrimination issues;

• the proposed process to be followed by the employer; and

• the need for the involvement of all stakeholders to generate positive outcomes.

Are you aware? You owe it to yourself to be.

The principles of employment equity (EE) are well-entrenched in the South African work environment. These principles are enforced through legislation, however, awareness of the requirements is sadly lacking.


Employee Interest

PERFORMANCE MANAGEMENT– the key to a successful companyIt is not surprising that strong business performance is aligned to strong employee performance management systems. However, recent research reveals that performance management techniques for both effective and less effective organisations are not very different.

A WorldatWork and Sibson Consulting study involving more than 550 human resources professionals found that the greatest difference between high and low performers is the level of active leadership support and championing of the process.

The study also revealed that organisations enjoying the greatest impact from performance management are those that have strong leadership support and that perform well in differentiating performance and giving performance messages.

According to data collected from more than 600 companies in 21 countries by the Towers Perrin Reward Challenges and Changes Survey, effective performance management is fully aligned with business strategy.

Research from the Institute for Corporate Productivity involving more than 1 000 human resources professionals, shows that there are several well-defined steps that can make performance management an effective process in any organisation.

Nine key practices for effective performance management were found:

• The performance management process includes developmental plans for the future.

• Training is provided to managers on how to conduct a performance evaluation meeting.

• The quality of performance appraisals is measured.

• There is a system in place to address and resolve poor performance.

• The performance appraisal includes information other than that based on the judgment of managers.

• The performance review process is consistent across the organisation.

• Employees can expect feedback on their performance more than once a year.

• The performance management process includes ongoing goal review and feedback from managers.

The Hay Group reports that the most admired companies have created performance management systems that take a well-rounded approach to measuring performance. Such measurements include teamwork, long-term thinking, building human capital, developing and managing talent and customer loyalty.

Additionally, these successful companies have an approach to managing performance that:

• excels at driving accountability through the organisation – they are clear about an individual’s accountabilities for a particular role and they consistently hold people accountable;

• ensures the functions required to execute the strategy are in place – their organisation design is fit for purpose, and employees at all levels understand the organisation’s key priorities;

• aligns reward with performance and, in turn, performance with strategy – they encourage executives to deliver on activities that are of strategic importance to the organisation, reinforcing the message that delivering what is important will lead to more engaged employees; and

• prioritises employee career development as a core accountability for line managers with greater use of planned career assignments, one-on-one coaching, and competency models.


Events

UNIFORM IN OUR SOLIDARITY WITH THE HEROES OF 16 JUNE

‘Long live the spirit of June 16’said Nelson Mandela in 1993 on the 17th anniversary of the Soweto uprising.

Now, 23 years later, the country continues to commemorate that day and those who fell while fighting for their freedom and their rights.

This year, the 40th anniversary saw media focus intensify on locating Mbuyisa Mukhubu, photographed carrying Hector Pieterson in the most iconic image to emerge from that fateful day. Smuggled out of the township in the sock of photographer Sam Nzima once all his other spools had been confiscated by police, it remains forever etched in the minds of people around the world.

In a tribute to one of the most famous events in South African history, many NERSA staff members donned their school uniforms on 15 and 17 June.

(Left) Ms Edith Mkhabela and(top) Ms Sibongile Fumba,wearing school uniforms in

commemoration of 16 June 1976


Schedule of Energy Regulator and Subcommittee meetingsfor the period July - September 2016

The Energy Regulator envisages the following schedule for the 3rd quarter of 2016

TYPE OF MEETING DATE OF MEETING PURPOSE

JULY 2016

Piped-Gas Subcommittee Tuesday, 5 July 2016 13:00 – 15:00 • Reports/Delegated matters

Electricity Subcommittee Wednesday, 6 July 2016 09:00 – 12:00 • Reports and Delegated matters

Petroleum Pipelines Subcommittee Wednesday, 6 July 2016 13:00 – 15:00 • Reports and Delegated matters

Public Hearing Thursday, 7 July 2016• 1st Quarter Performance Report• 1st Quarter Management Accounts• Strategic Risk Register

Executive Committee Operational Risk Committee Friday, 8 July 2016 09:00 – 12:00

• 1st Quarter Performance Report• 1st Quarter Management Accounts• Performance Against Predetermined Objectives• Reports/Governance/Delegated matters• Budget Assumptions and Parameters

Regulator Executive Committee Monday, 11 July 2016 09:00 – 11:00

• Municipal Tariff Increases• Unaudited Performance Against Predetermined Objectives• Unaudited Annual Report• Unaudited Financial Statements• Reports/Governance/Delegated matters

Human Resources and Remuneration Committee Monday, 11 July 2016 13:00 – 16:00 • Reports/Delegated matters

Finance Committee Monday, 18 July 2016 09:00 – 13:00• 1st Quarter Management Accounts• Audited Annual Financial Statements (noting)• Budget Assumptions and Parameters• Reports/Governance/Delegated matters

Audit and Risk Committee Monday, 18 July 2016 13:30 – 16:30

• 1st Quarter Management Accounts• 1st Quarter Performance Report• Audited Annual Financial Statements• Audited Performance Against Predetermined Objectives• Audited Annual Report• Strategic Risk Register• Reports/Governance/Delegated matters

Budget Workshop Friday, 22 July 2016 09:00 – 11:00• Draft Budget for 2017/18• Levy rates per industry for 2017/18• Capital expenditure

Regulator Executive Committee Monday, 25 July 2016 09:00 -11:00 • Reports/Governance/Delegated matters

Energy Regulator Thursday, 28 July 2016 09:00 – 13:00

• 1st Quarter Management Accounts• 1st Quarter Performance Report• Budget Assumptions and parameters• Audited Annual Financial Statements• Audited Performance Against Predetermined Objectives• Audited Annual Report • Subcommittee reports

Calendar of Events

19


AUGUST 2016

Regulator Executive Committee Monday, 1 Aug 2016 09:00 – 11:00 • Reports/Governance/Delegated matters

Public Hearing Thursday, 4 Aug 2016

Executive Committee Friday, 5 Aug 2016 09:00 – 12:00

• NERSA Budget 2017/18• Risk Register• Draft Annual Performance Plan (2017/18 – 2019/20)• Draft revised Strategic Plan (2015/16 – 2019/20) if necessary

Electricity Subcommittee Wednesday, 10 Aug 2016 09:00 -12:00 • Reports/Governance/Delegated matters

Petroleum Pipelines Subcommittee Wednesday, 10 Aug 201613:00 – 15:00 • Reports/Governance/Delegated matters

Piped-Gas Subcommittee Thursday, 11 Aug 2016 09:00 – 12:00 • Reports/Governance/Delegated matters

Extended Finance Committee Thursday, 11 Aug 2016 13:00 – 15:00 • NERSA Budget for 2017/18

Regulator Executive Committee Monday, 15 Aug 2016 09:00 -11:00

• Reports/Governance/Delegated matters• NERSA budget 2017/18• Draft Annual Performance Plan (2016/16 – 2016/17)• Draft revised Strategic Plan (2015/16 – 2019/20) if necessary

Finance Bid Adjudication Committee Thursday, 18 August 2016 09:00 – 12:00 • Tenders/Bids

Energy Regulator Thursday, 25 Aug 2016 09:00 – 13:00

• Draft Annual Performance Plan (2017/18 – 2019/20)• Draft revised Strategic Plan (2015/16 – 2019/20) if necessary• NERSA Budget for 2017/18• Subcommittee Reports

Calendar of Events


SEPTEMBER 2016

Public Hearing Thursday, 1 Sept 2016

Executive Committee Friday, 2 Sept 2016 09:00 – 12:00 • Reports/Governance/Delegated matters

Regulator Executive Committee Monday, 5 Sept 2016 09:00 -11:00 • Reports/Governance/Delegated matters

Electricity Subcommittee Tuesday, 6 Sept 2016 09:00 – 12:00 • Reports/Governance/Delegated matters

Petroleum Pipelines Subcommittee Tuesday, 6 Sept 2016 13:00 – 15:00 • Reports/Governance/Delegated matters

Piped-Gas Subcommittee Wednesday, 7 Sept 201609:00 – 12:00 • Reports/Governance/Delegated matters

Regulator Executive Committee Monday, 19 Sept 2016 09:00 – 11:00 • NERSA Budget for 2017/18

Finance Bid Adjudication Committee Wednesday, 21 Sept 201613:00 – 15:00 • Tenders/Bids

Energy Regulator Thursday, 29 Sept 2016 • Subcommittee Reports

The Official Newsletter of the National Energy Regulator of South Africa

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