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OVERVIEW ON THE MYPD3 PUBLIC CONSULTATION PROCESS

OVERVIEW ON THE MYPD3 PUBLIC CONSULTATION PROCESS. PRESENTATION TO THE SELECT COMMITTEE ON ECONOMIC DEVELOPMENT : 04 DECEMBER 2012. Contents. Overview of Eskom’s application Our planned approach to the application Information sharing session The consultation process and determination.

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OVERVIEW ON THE MYPD3 PUBLIC CONSULTATION PROCESS

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  1. OVERVIEW ON THE MYPD3 PUBLIC CONSULTATION PROCESS PRESENTATION TO THE SELECT COMMITTEE ON ECONOMIC DEVELOPMENT : 04 DECEMBER 2012

  2. Contents • Overview of Eskom’s application • Our planned approach to the application • Information sharing session • The consultation process and determination

  3. Eskom’s application • NERSA confirms that we have received an application from Eskom • Five year application which proposes increases of 16 % per annum over the period • Application also includes a request for restructuring of tariffs • To simplify residential tariffs but also protect the poor • To recalculate tariff charges based on an updated cost to serve study • To unbundle tariff components to show cross subsidisation and transparency • To Revise Eskom’s time of use tariff to reduce the peak high-demand (winter) energy price

  4. Our planned approach • NERSA is required by the Electricity Regulation Act to allow an efficient supplier to recover its costs to supply plus a fair rate of return • To achieve this NERSA uses a MYPD methodology based on a rate of return mechanism • The summary the mechanism • Allowable revenues = costs to supply + ROA

  5. MYPD Process/Procedure • There are 6 pillars used in the MYPD determination process: • Pillar 1 : Planning • Review of previous decisions and current regulatory rules • Analysis of current/prevailing economic, political, social and legal environment • Draft Process plan that includes timelines etc • Pillar 2: Organising • The MYPD application is broken down into key elements/teams for the ease of management of the work.

  6. MYPDProcess/Procedure (Contd) • Pillar 3: Analysing • Actual analysis of the data received from Eskom • Pillar 4: Consultation • In MYPD , a broad spectrum of stakeholders are consulted for their views and comments. Written comments are solicited and Public Hearings are held in all provinces of South Africa

  7. MYPD Process/Procedure (Contd) • Pillar 5: Determination • This is mainly the consolidation of all evidence that has been gathered (spreadsheets, comments etc). After consolidation of the evidence, the Regulator will consider the regulatory objectives to be achieved including the public interest • Pillar 6: Communication • After the decision by the Energy Regulator, it is communicated to Eskom and the Minister of Energy. • NERSA then holds a media conference

  8. MYPD Process/Procedure (Contd) • Public Consultation Processes • Requests for written comments • Discussions (Information Sharing) with stakeholders and the public on Eskom’s application • Radio Talk Shows (SABC & Community Radio Stations) • SABC TV • Public Hearings in all provinces

  9. Radio Talk Shows conducted

  10. Public Hearings (15 – 31 January 2013)

  11. Timelines for processing Eskom’s MYPD3 Application

  12. Conclusion • NERSA is committed to a transparent consultative process in its decision making process • Discussions with the general public and stakeholders will provide a platform to interrogate the application • NERSA will also ensure engagement with the following high level stakeholders and decision makers • PPC on Energy, Economic Development, Local Government, Public Enterprises and NCOP; • Department of Energy; • Mayors of identified towns/cities; and • Traditional Leaders in relevant towns/cities

  13. Thank YouTel: 012 401 4600 Fax: 012 401 4700 Website: www.nersa.org.zaPhysical Address:Kulawula House526 Madiba StreetArcadia,0083Pretoria

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