Set rules for determination of bulk raw water tariffs. Approve bulk raw water tariffs . Recommend bulk raw water tariffs where a municipality has own supply/supplies other entities. Ensure reasonable charge for bulk raw water customers. Sustainability of institutions. Monitor cost implications of compliance with bulk raw water quality standards. Costs of compliance with aw water quality service standards. Sustainable institutions. Customer /user protection. Environmental/ Technical Assess reliability of supply (strategic asset management). Specifying asset Conditions. Norms and standards complied with. Technical/ social Customer/consumer protection. Norms and standards complied with. Monitor efficiency and serviceability of supply Specifying efficiency and performance targets. Benchmarking. Technical / social Dispute resolution/ regulatory review. Deal with disputes/appeals. Contractual/legal Retail water tariffs and service standards Set rules for determination of retail water tariffs. Assess compliance with retail tariff determination rules and make recommendations. Ensure reasonable charges for retail water to customers. Sustainability of institutions. Norms and standards complied with. Monitor costs for compliance with drinking water quality standards. of compliance with water quality service standards (SANS 241). Consumer protection. Health Monitor reliability of supply (strategic management). Specifying asset Conditions. Norms and standards complied with. Technical/social Customer protection. Norms and standards complied with.
Monitor efficiency and serviceability of supply Specifying efficiency and or performance targets. Benchmarking. Technical/social Service coverage. Service coverage targets met. Social Dispute resolution/regulatory review. Deal with disputes/appeals. Contractual/legal Sanitation Charges and service standards. Set for determination of sanitation charges (tariffs). Assess compliance with sanitation charges (tariffs) determination rules and make recommendations. Ensure reasonable charge for sanitation services to customers. Sustainability of institutions. Monitor reliability of service (strategic asset management). Specifying asset Conditions. and standards complied with. Technical/social Customer protection. Norms and standards complied with. Monitor efficiency and serviceability of supply. Specifying efficiency and or performance targets. Benchmarking. Technical/social Monitor service coverage. Service coverage targets met. Social Dispute resolution and regulatory review. Deal with disputes/ appeals. Contractual/legal Bulk waste water charges and service standards Set rules for determination of bulk sanitation/waste water charges (tariffs). Assess compliance with bulk sanitation/waste water tariff determination rules and make recommendations Ensure reasonable charge for sanitation customers. Financial sustainability of institutions. Monitor reliability of service. Specifying asset conditions. Norms and standards met. Technical/social Customer protection. Norms and standards met. Monitor efficiency and serviceability of supply. Specifying efficiency and or performance targets. Technical/social
Table 3: current economic regulatory functions being performed by DWA REGULATED ENTITY REGULATED ACTIVITY ECONOMIC REGULATION FUNCTION PERFORMED BY DWA DWA Setting of Water Resource Management charges, waste discharge charges (to come) and water resources consumptive charges; Use of income from users to build, operate, maintain, and refurbish water resources infrastructure; Use of income from users to fund water resources management in Water Management Areas; Value for money of costs incurred vs planned costs No regulation/self regulation TCTA Raising of off budget finance to develop water resources infrastructure Structuring and raising of project finance Determination of CUC for off-budget infrastructure Value for money of costs incurred vs planned costs No regulation/self regulation. As shareholder/ executive authority the Minister, through DWA, is mainly performing an oversight role in respect of the setting of the CUC for each project. CMA Setting of Water Resource Management Charge for its WMA (when delegated). Use of income from to manage water resources in the WMA No formal regulation of charge. Oversight role by DWA on behalf of Minister as shareholder/ executive authority. The business plan and financial reports submitted to DWA as Executive Authority not regulator WRC Setting of research charge Use of income from research charge to achieve objectives in business plan WRC submits annual proposal on research charge increase to Minister for approval. Minister determines allowable increase. WSA/ WSP Bulk and retail tariff setting Compliance with section 9 and 10 regulations S9 (technical regulation but has implication on economic regulation) s10 regulation (economic regulation). It is unclear to what extent economic regulation is taking in terms of this section. An added complexity is that
Industry Ave charge (c/m³) : 2012/2013 ER charge (c/m³) % of existing charge D&I 74.03 1.03 1% IRR 9.16 1.03 11% Table 11. Impact of adding the ER charge to the NWRI charge See the below Table 12 for the analysis of one of the Western Cape schemes, the Bergriver (Voelvlei Dam). The impact of the addition of the Economic Regulator charge is not significant, an overall increase in Billing of approximately 4%. SMP ID Sector Registered Volume ('000 m³) 2011/2012 Charges (c/m³) Theoretical Billing (R'000 ) ER charge (c/m³) New charge (c/m³) Revised Billing (R'000 ) Additional Billing (R'000 ) % of existing Billing 4 Irr 11 518 2.10 242 1.03 3.13 360 119 49% 45 D&I 4 274 18.02 770 1.03 19.05 814 44 6% 121 D&I 70 400 38.96 27 428 1.03 39.99 28 153 725 3% 127 Irr 14 552 9.64 1 403 1.03 10.67 1 553 150 11%
complement of approximately 64 staff is achieved. In the initial years after establishment, it is anticipated that the use of fixed term contracts will be necessary. If the Economic Regulator is established as a NPE, the summary of expected over a five year establishment cycle has been projected as follows: Total Costs: NPE Year 1 Year 2 Year 3 Year 4 Year 5 R'000 Costs 10 546 22 320 37 370 53 544 71 478 Consultants - 32 828 35 126 19 534 - Overheads 8 294 10 997 11 895 13 100 14 700 Board Costs 5 217 5 525 5 851 6 196 6 562 Establishment 2 821 2 714 2 680 2 162 2 347 Total 26 878 74 384 92 922 94 538 95 087 In comparison, the Government Component’s and Internal unit’s total expenses are expected to be R82 million and R58 million respectively in year 5. There are a number of costs savings in the case of the internal unit, as the assumption is that an internal unit would make use of DWA’s corporate services.