TARIFF DECISION FOR FFS REFINERS (PTY) LTD FOR ITS CAPE TOWN HARBOUR STORAGE FACILITY LOCATED AT PORT CAPE TOWN, WESTERN CAPE PROVINCE FOR 2020 ...
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TARIFF DECISION FOR FFS REFINERS (PTY) LTD FOR
ITS CAPE TOWN HARBOUR STORAGE FACILITY
LOCATED AT PORT CAPE TOWN, WESTERN CAPE
PROVINCE FOR 2020, 2021 AND 2022 LICENCE
NUMBER: PPL.sf.F3/80/10/2008
10 September 2020TABLE OF CONTENTS
Introduction ........................................................................................................................... 6
Applicable Law ...................................................................................................................... 7
The Methodology .................................................................................................................. 7
Decision-Making Process ..................................................................................................... 7
The Application ..................................................................................................................... 8
ASSESSMENT OF THE APPLICATION ...................................................................................... 8
Calculation of The Allowable Revenue (AR)......................................................................... 8
Regulatory Asset Base (RAB)............................................................................................... 8
Property, Plant And Equipment (PPE) .................................................................................. 9
Net Working Capital ............................................................................................................ 10
Deferred Tax ............................................................ERROR! BOOKMARK NOT DEFINED.
Weighted Average Cost of Capital (WACC) ....................................................................... 11
COST OF EQUITY ............................................................................................................... 12
COST OF DEBT .................................................................................................................. 12
Debt To Equity Ratio ........................................................................................................... 12
Operational Expenditure (E) ............................................................................................... 13
Depreciation and Amortisation ............................................................................................ 14
Tax Expense (T).................................................................................................................. 15
Allowable Revenue (AR) ..................................................................................................... 16
Volumes .............................................................................................................................. 16
Tariff ................................................................................................................................... 16
Conclusion .......................................................................................................................... 17
LIST OF TABLES
Table 1: Tariff approved for the storage facility ........................................................... 4
Table 2: Calculation of Net Working Capital .............................................................. 10
Table 3: WACC calculation ........................................................................................ 13
Table 4: Operating Expenses .................................................................................... 14
Table 5: Tax Expense Calculation ............................................................................. 15
Table 6: AR Calculation ............................................................................................. 17
Table 7: Tariff calculation ........................................................................................... 18
Page 2 of 17ABBREVIATIONS AND ACRONYMS
AR Allowable Revenue
BER Bureau of Economic Research
CAM Cost Allocation Manual
CAPM Capital Asset Pricing Model
CPI Consumer Price Index
CPIf Consumer Price Index Forecast
Cpl Cents per litre
APP Application
FC Forecast
Act Actual
NERSA National Energy Regulator of South Africa
NRBTA Net Revenue Before Tax Allowance
PPE Property, Plant, Vehicles and Equipment
RAB Regulatory Asset Base
PPS Petroleum Pipelines Sub-Committee
RFR Regulatory Financial Report
RRM Regulatory Reporting Manuals
SRAB Starting Regulatory Asset Base
the Act the Petroleum Pipelines Act, 2003 (Act No.60 of 2003)
TOC Trended Original Cost
VAT Value Added Tax
WACC Weighted Average Cost of Capital
Page 3 of 17THE NATIONAL ENERGY REGULATOR OF SOUTH AFRICA
In the matter regarding
THE 2020, 2021 AND 2023 TARIFF APPLICATION FOR THE STORAGE FACILITY IN
CAPE TOWN HARBOUR, WESTERN CAPE PROVINCE
By
FFS REFINERS (PTY) LTD (LICENCE NUMBER: PPL.SF/F3/80/10/2008)
THE DECISION
1. On 10 September 2020, the National Energy Regulator of South Africa (NERSA or ‘the
Energy Regulator’) approved tariffs for the 2020 Financial Year (FY), 2021 FY and 2022
FY, as a condition of FFS Refiners (Pty) Ltd’s operation licence, for the operation of its
petroleum storage facility located at Cape Town Harbour Tank Farm in Western Cape
Province (Licence Number: PPL.sf.F3/80/10/2008).
2. The tariffs approved by NERSA for the petroleum storage facility are maximum tariffs,
expressed in Rands per cubic metre (R/m3/month) and are exclusive of the Value Added
Tax (VAT). The tariffs for the petroleum storage facility are shown in Table 1 below.
Table 1: Tariff approved for the storage facility
2020 2021 2022
(R/m3/month) (R/m3/month) (R/m3/month)
FFS Refiners 423 460 441
3. The tariffs will be applicable for the periods starting from 10 September 2020 to 31
December 2020, 1 January 2021 to 31 December 2021, 1 January 2022 to 31 December
2022. Upon lapsed of the 2022 tariff period, the 2022 tariff will remain in force until
NERSA takes a decision to approve a new tariff for the storage facility in line with section
28(5)(b) of the Petroleum Pipelines Act, 2003 (Act No. 60 of 2003) [‘the Act’].
4. Although NERSA approved the tariffs applied for, for future tariff applications, FFS is
required to use the elements of the Allowable Revenue (AR) calculated by NERSA
and/or the actual costs incurred as a base when submitting future tariff applications. The
elements of AR determined by the Energy Regulator may still be subjected to a further
prudency assessment and verification.
Page 4 of 175. Furthermore, FFS is required to comply with the requirements of Regulation 9 of the
Regulations made in terms of section 33(1) of the Act (‘the Regulations’) and make a
financial provision for the rehabilitation of land used in connection with the licensed
activity.
Page 5 of 17REASONS FOR DECISION
Introduction
1. On 8 January 2010, the National Energy Regulator South Africa (NERSA or ‘the Energy
Regulator) issued a license with conditions to FFS Refiners (Pty) Ltd to operate its
petroleum storage facility located at Cape Town Harbour Tank Farm in Western Cape
Province (License number: PPL.sf.F3/80/10/2008). The facility is owned and operated
by FFS Refiners, a privately owned company with limited liability established in terms of
the Companies Act, 1973 (Act No.61 of 1973).
2. On 22 September 2014, the Energy Regulator approved the first amendment of the
conditions of a licence issued to FFS for the operation of its petroleum storage facility at
Cape Town Harbour Tank Farm in Western Cape Province.
3. The amendment sought to add a new storage tank. After the amendment, the Cape
Town Harbour facility consists of five storage tanks.
4. FFS is a private company registered in terms of the company laws of South Africa, with
Company Registration No. 1986/003962/07. FFS Refiners recycles and stores a variety
of used petroleum products.
5. On 20 February 2020, FFS submitted a tariff application for its Cape Town Harbour
storage facility for the period 1 January 2020 to 31 December 2022 (3 years). The
application was declared adequate on 2 March 2020.
6. This is the FFS’s first tariff application after amendment of the conditions of the licence.
7. The application is based on the Tariff Methodology for the approval of Tariffs for
Petroleum Loading Facilities and Petroleum Storage Facilities, Version 4, approved on
24 August 20171 (‘the Tariff Methodology’).
1
Available at www.nersa.org.za
Page 6 of 178. In this tariff application, FFS is applying for tariffs of R430/m3/month for the 2020 FY, R1
446/m3/month for the 2021 FY and R463/m3/month for the 2022 FY. The tariffs applied
for are maximum tariffs and are exclusive of Value Added Tax (VAT). The tariff
application by FFS is based on the Tariff Methodology for the approval of Tariffs for
Petroleum Loading Facilities and Petroleum Storage Facilities, Version 4, approved on
24 August 2017 (‘the Tariff Methodology’).
Applicable Law
9. The legal basis for NERSA to approve tariffs for petroleum loading and storage facilities
is derived from the National Energy Regulator Act, 2004 (Act No. 40 of 2004) (‘NERSA
Act’), read with the Petroleum Pipelines Act, 2003 (Act No. 60 of 2003) (‘the Act’)2.
The Methodology
10. NERSA is required by section 28(2)(a)(i) of the Act to approve tariffs based on a
systematic methodology applicable on a consistent and comparable basis. The tariff
application by the FFS was prepared using the Tariff Methodology.
11. The Tariff Methodology prescribes the use of the Trended Original Cost (TOC) method
for the valuation of assets.
12. FFS has in this case used the TOC valuation method to determine its Property, Plant,
Vehicles and Equipment (PPE) values.
Decision-Making Process
13. As part of the public consultation process, NERSA published the non-confidential
version of the tariff application on its website for public comment. Notices inviting the
public to submit written comments on the tariff application were published in the Beeld
and the Business Day Newspapers on 24 June 2020. The closing date for receiving
public comments was 4 August 2020. The public participation process was carried out
in accordance to section 4 of the Promotion of Administrative Justice Act, 2000 (Act No.
3 of 2000).
14. No comments were received from stakeholders or members of the public by closing
date.
2 Available at www.nersa.org.za
Page 7 of 1715. Due to the COVID-19 pandemic restrictions, the Energy Regulator waived the public
hearing for this application. NERSA considers the request for submission of written
comments as a sufficient form of public consultation for this application.
THE APPLICATION
Assessment of the Application
16. NERSA used the TOC Tariff Methodology to assess the outcome of the tariffs applied
for by FFS for the Cape Town Harbour storage facility.
17. Data supplied by FFS was used for most of the calculations performed in this evaluation.
Where this is not the case, the reasons for not using the FFS’ supplied data are
provided.
Calculation of the Allowable Revenue (AR)
18. In accordance with the Tariff Methodology, the following formula was used to determine
the FFS’ AR:
AR = (RAB x WACC) + E + D ± C +T
Where:
RAB = Regulatory Asset Base
WACC = Weighted Average Cost of Capital
E = Expenses: Operating and Maintenance Expenses for the tariff period
under review
D = Depreciation Expense for the tariff period under review
C = Clawback Adjustment from a preceding tariff period in relation to the latest
estimates for that tariff period
T = Tax: estimated Tax Expense for the tariff period under review
19. The elements of the AR are discussed in more detail in the paragraphs below.
Regulatory Asset Base (RAB)
20. According to the Tariff Methodology, RAB is to be determined by applying the following
formula:
Page 8 of 17RAB = (V - d) + w ± dtax
Where:
V = Value of Operating Property, Plant, Vehicles and Equipment
d = Accumulated Depreciation and Accumulated Amortisation of inflation
write-up for the period up to the commencement of the tariff period under
review
w = Net Working Capital
dtax = Deferred Tax
Property, Plant and Equipment (PPE)
21. FFS states that the Starting Regulatory Asset Base (SRAB) as approved by NERSA
has been trended to arrive at the qualifying RAB values for each tariff period. The TOC
asset valuation method was used in accordance with the Tariff Methodology. The SRAB
was trended using the Consumer Price Index forecast (CPIf).
22. In its application, FFS determined the PPE values of R199.57 million, R202.75 million,
and R205.16 million for the 2020 FY, 2021 FY, 2022 FY, respectively. NERSA
calculated the PPE value to be R200.52 million, R204.69 million, and R208.70 million
for the 2020 FY, 2021 FY, 2022 FY, respectively.
23. The difference between the PPE value submitted by FFS and those determined by
NERSA emanates from the different Consumer Price Index forecast (CPIf) values used
in trending the asset values. NERSA used the most recent CPIf for the period under
review (5.60%), while FFS used the latest CPIf available at the time the tariff application
was compiled (5.10%). The CPIf data used by NERSA was sourced from the Bureau of
Economic Research (BER) and is published on the NERSA website.
24. Any difference between the asset values used in the determination of tariffs and the
actual prudently incurred costs will be subject to clawback in the subsequent tariff
periods, once the audited costs are submitted and verified through the Regulatory
Reporting Manuals (RRM).
Page 9 of 17Net Working Capital
25. Net Working Capital (w) refers to the various regulated business operation’s funding
requirements other than PPE in service. These funding requirements include
Inventories, Trade Receivables, Operating Cash and Trade Payables.
26. The following formula from the Tariff Methodology was used to determine the Net
Working Capital.
Net Working Capital = Inventory + Trade Receivables + Operating Cash – Trade Payables
27. FFS calculated its working capital by considering the following elements:
Trade receivables are based on 30 days of turnover based on current customer
contract;
External trade payables are settled within 45 days; and
The allowance for operating cash is taken as a standardized factor of 45 days
operating expenditure.
28. NERSA calculated the net working capital based on 30 days of AR for receivables,
operating cash is based on 45 days of operating expenditure (opex) and trade payables
are based on 45 days of operating expenditure. The comparison of working capital is
shown in Table 2 below.
Table 2: Calculation of Net Working Capital
FFS NERSA
Net Working
Capital R’000 2020 2021 2022 2020 2021 2022
AR 76 965 79 816 82 742 75 637 78 854 82 293
Operating
Expenses 31 505 33 402 35 518 31 505 33 402 35 518
Receivables 6 195 6 449 6 755 6 126 6 386 6 665
Operating cash 2 582 2 745 2 919 3 884 4 118 4 379
Less Payables (2 582) (2 745) (2 919) (3 884) (4 118) (4 379)
Net Working
6 195 6 449 6 755 6 126 6 386 6 665
Capital
29. The difference between the Net Working Capital calculated by FFS and NERSA is due
to the different AR values used in determining the Trade Receivables value and also the
different days used to calculate operating cash and trade receivables.
Page 10 of 1730. The Net Working Capital and the PPE value were added to determine the RAB value
on which a return is earned. The RAB values are depicted in Table 3 below.
Table 3: Calculation of the RAB
FFS NERSA
Net Working
Capital (R’000) 2020 2021 2022 2020 2021 2022
PPE-d 199 567 202 753 205 159 200 516 204 687 208 696
Net Working
6 195 6 449 6 755 6 126 6 386 6 665
Capital
- - - - - -
Dtax(liability)
RAB 205 762 209 642 211 914 206 642 211 073 215 361
31. The difference in the RAB values calculated by FFS and NERSA is due to the difference
in the PPE and Net Working Capital values calculated by both parties.
Weighted Average Cost of Capital (WACC)
32. Section 5 of the Tariff Methodology stipulates that the following formula must be used
to determine the WACC:
E
q
D
t
W
A
C
C
*
K
e
*
K
d
D
t
E
q
D
t
E
q
Where:
Eq = Shareholders’ Equity
Dt = Interest Bearing Debt
Ke = Post-tax, real Cost of Equity derived from the Capital Asset Pricing
Model (CAPM)
Kd = Post-tax, real3 Cost of Debt
33. In the tariff application, FFS states that the WACC calculation is in line with the Tariff
Methodology. In calculating the WACC, the following components of the WACC were
analysed:
a) Cost of Equity;
b) Cost of Debt; and
c) Debt to Equity Ratio.
3
First convert from pre- to post-tax and then from nominal to real.
Page 11 of 17Cost of Equity
34. The Tariff Methodology prescribes that the Cost of Equity be determined according to
the Capital Asset Pricing Model (CAPM). FFS applied the CAPM to calculate their Cost
of Equity.
35. FFS applied a Risk Free Rate (Rf) of 5.30%, a Market Risk Premium (MRP) of 5.20%
and Beta of 0.82, which resulted in a Cost of Equity of 18.56%.
36. NERSA applied a Rf of 5.31%, MRP of 4.75% and a Beta of 0.75, which resulted in a
Cost of Equity of 17.87%.
37. The Tariff Methodology requires that data used to calculate the Cost of Equity be that
of 12 months prior to the commencement of the tariff period under review. In this regard,
the data used by NERSA in its determination of Cost of Equity is that of December 2018,
while FFS used data as at August 2018, hence the difference between the Cost of Equity
values.
Cost of Debt
38. FFS calculated a Cost of Debt of 2.00% (post-tax, real) using a CPIf for the tariff period
under review of 5.10% and a nominal Cost of Debt of 10.0% for the tariff periods under
review.
39. NERSA calculated a real Cost of Debt of 1.52% using the most recent CPIf for the period
under review, namely 5.60% and a nominal Cost of Debt of 10%. Therefore, NERSA’s
and the FFS’ calculations differ due to the use of different CPIf values.
Debt to Equity Ratio
40. The Tariff Methodology requires a minimum debt to equity ratio of 30:70 for the efficient
operation of the licenced activity.
41. The Tariff Methodology states that, “the actual interest bearing debt and the equity
pertaining to the regulated assets for the tariff period under review must be subject to
the Energy Regulator finding the licensee’s debt to equity ratio reasonable. If after
conducting reasonableness checks, the Energy Regulator finds the debt ratio to be
unreasonable, the Energy Regulator must assume a reasonable debt ratio. A minimum
debt to total capital level of 30% will be assumed reasonable”.
Page 12 of 1742. FFS indicated that its actual debt ratio to equity ratio is 20:80. Therefore, FFS had to
base its calculations on the minimum debt to equity ratio of 30:70 in calculating its
WACC value.
43. NERSA also used a debt to equity ratio of 30:70 in determining its WACC as the Tariff
Methodology requires a minimum debt to equity ratio of 30:70 for the efficient operation
of the licenced activity.
WACC
44. FFS calculated its real WACC to be 13.59% and NERSA calculated a WACC of 13%.
The difference in the WACC calculated by FFS and that calculated by NERSA is due to
the different Cost of Equity and Cost of Debt values. The WACC calculation by the FFS
and by NERSA is depicted in Table 3 below.
Table 3: WACC calculation
Detail Formula FFS NERSA
Risk Free Rate (before-tax real) a 5.30% 5.31%
Market Risk Premium (real) b 5.20% 4.75%
Beta c 0.82 0.75
Cost of Equity (post-tax real) e=(a+(b*c)) 18.56% 17.87%
Cost of Debt (Pre-tax) e 10.00% 10.25%
Corporate tax rate f 28% 28%
Nominal Cost of Debt g=e*(1-f) 7.20% 7.20%
CPI forecast h 5.10% 5.60%
Cost of Debt (post-tax real) I=(1+g)/(1+h)-1 2.00% 1.52%
Capital Structure:
Debt ratio j 30% 30%
Equity Ratio k 70% 70%
WACC l=(d*k)+(i*j) 13.59% 13.00%
Operating Expenditure (E)
45. Regulation 5(2) read with regulation 4(2)(a) of the Regulations made under the
Petroleum Pipelines Act, 2003 (Act No. 60 of 2003) [‘the Regulations’], provides that the
tariffs approved by the Energy Regulator must enable an efficient licensee to recover the
reasonable operational and maintenance expenses of the storage facility in the year in
which they are incurred.
46. The FFS licensed storage facility does not generate any revenue from external
customers, as the facility is used entirely for FFS’s own use. The licensed activity
Page 13 of 17accounts for 80% of the group’s total expenses allocated according to throughput
percentage.
47. FFS states that expenses are planned for the efficient operation and maintenance of the
core business. These expenses are to be categorised in accordance with the Regulatory
Reporting Manual (RRM). The fully allocated cost attribution approach for the allocation
of costs is used.
48. NERSA accepts the operational expenses projections by FFS. (refer to Table 4). Any
difference between the expenses provided in this tariff application and actual expenses
incurred will be subject to a giveback or clawback in the next tariff period.
49. The yearly increases of estimated expenses are based on a CPI values for the tariff
periods applied for. The CPI forecasts are published on the Energy Regulator’s website
and are sourced from the BER.
Table 4: Operating Expense
2020 2021 2022
Expense Description R R R
Fixed Cost 31 505 000 33 402 000 35 518 000
Total 31 505 000 33 402 000 35 518 000
50. NERSA allows the projected costs subject to further verifications and audits. Any
difference between the expenses provided in this tariff application and actual expenses
incurred would be subject to a clawback in favour of the customers or FFS in the next
tariff determinations.
Depreciation (D)
51. Section 8.1 of the Tariff Methodology prescribes that Depreciation be calculated on a
straight line basis over the service life of each of the assets or classes of assets.
52. FFS depreciated its assets on a straight line basis using the useful life of 25 years and
arrived at the values of R6.33 million for the 2020 FY, 2021 FY and 2022 FY.
53. NERSA also applied a straight line basis to calculate depreciation and arrived at the
same values for the 2020 FY, 2021 FY and 2022 FY.
Page 14 of 17Tax Allowance (T)
54. Section 7.1 of the Tariff Methodology states that:
“Each licensee must make a once off election between the use of either (a) flow-through
(actual tax) payment, or (b) notional tax payment”.
55. FFS has elected to use notional tax. NERSA interprets a notional tax expense to mean
the tax due according to accounting requirements rather than the actual tax payable in
the period under review.
56. Section 7.3 of the Tariff Methodology prescribes the following formula for calculating the
notional tax expense:
Tax = {(NRBTA)/ (1-t)*t}
Where:
NRBTA = Net Revenue before Tax Allowance
= {(RAB*WACC) + E + D (historic & write up) ±C} - {E + Depreciation (historic))}
t = Prevailing Corporate Tax Rate of the licensee
57. The tax calculation is shown in Table 5 below.
Table 5: Tax Expense Calculation
FFS NERSA
R’000
2020 2021 2022 2020 2021 2022
Allowable Revenue before tax
66 008 68 592 71 291 65 052 67 900 70 968
allowance
Less: Operational Expenses 31 505 33 402 35 518 31 505 33 402 35 518
Less: Depreciation (historic) 6 329 6 329 6 329 6 329 6 329 6 329
Less: Clawback 0 0 0 0 0 0
Taxable income before Gross
28 174 28 861 29 444 27 218 28 168 29 121
up
Taxable income after Gross
39 131 40 084 40 895 37 803 39 123 40 446
up (taxable income/1-t)
Tax Component in income
10 957 10 585 11 451 10 585 10 954 11 325
(i.e. Gross up * 28%)
58. Table 5 above shows that there is a difference in tax allowance expense due to a
different AR (before tax) being used by FFS and NERSA in calculating tax expense.
Page 15 of 17Allowable Revenue (AR)
59. FFS calculated the AR based on Rate of Return (ROR) approach. This is in accordance
with the Tariff Methodology.
60. NERSA also performed the calculations of AR based on the ROR approach. The
comparison between the AR calculated by FFS and NERSA are shown in Table 6 below.
Table 6: AR Calculation
FFS NERSA
R’000
2020 2021 2022 2020 2021 2022
Asset value (PPE – d) – ToC 199 567 202 753 205 159 200 516 204 687 208 696
Net Working Capital (w) 6 195 6 449 6 755 6 126 6 386 6 665
RAB 205 762 209 642 211 914 206 642 211 073 215 361
Ke 18.56% 18.56% 18.56% 17.87% 17.87% 17.87%
Kd 2.00% 2.00% 2.00% 1.52% 1.52% 1.52%
WACC 13.59% 13.59% 13.59% 13.00% 13.00% 13.00%
Return on Investment 27 851 28 198 28 447 26 864 27 440 27 997
Operating Expenses 31 505 33 402 35 518 31 505 33 402 35 518
Depreciation 6 329 6 329 6 329 6 329 6 329 6 329
Amortisation 323 662 998 354 729 1 124
Tax Expense 10 957 11 224 11 451 10 585 10 954 11 325
Allowable Revenue 76 965 79 816 82 742 75 636 78 854 82 293
61. The difference in AR is mainly due to the RAB, WACC, tax expenses and Amortisation
calculated by FFS and NERSA.
Volumes
62. FFS states that Cape Town Harbour Depot is totally committed to Petro SA and Eskom
as a strategic stockholding, no estimate of volume throughput can be given. The
throughput depends totally on the availability of electricity through the Eskom grid and
the extent that Eskom needs to run the emergency peaking plant generators. FFS has
assumed 12 stock turns per annum.
63. NERSA accepts the use of total operating capacity as proposed way of estimating
volumes for FFS. NERSA will continuously monitor this against the volumes submitted
to NERSA on a monthly basis, any difference will be subject to a clawback adjustment
in future tariff periods.
Page 16 of 17Tariff
64. The tariffs calculated by FFS and NERSA are based on the total AR divided by the total
operating capacity. The proposed tariffs are expressed as Rands per cubic metre of
tank capacity per month and are exclusive of VAT.
65. The tariffs calculated by FFS and NERSA are summarised in Table 7 below.
Table 7: Tariff calculation
FFS NERSA
2020 2021 2022 2020 2021 2022
Allowable Revenue (R’000) 76 965 79 816 82 742 75 637 78 854 82 293
Volume (m3) 179 179 179 179 179 179
Tariff ( Rands/m3 /month) 430 446 463 446 441 460
% difference 1.73% 1.20% 0.54%
66. The differences in the tariffs applied for by FFS and those determined by NERSA are
due to the following:
a) the RAB values in the application are different from those determined by the NERSA
due to different net working capital and amortisation;
b) the different WACC values for the tariff periods under review, resulted in different
returns on investments due to the different Risk free, MRP and CPIf applied by both
parties; and
c) the different values in RAB, WACC resulted in different ARs and ultimately resulted
in different tariffs.
67. FFS is required to use the elements of the AR calculated by NERSA and/or the actual
costs incurred as a base when submitting future tariff applications.
Conclusion
68. From a conspectus of the facts and evidence, it is appropriate and in compliance with
the requirements of the National Energy Regulator Act, 2004 (Act No. 40 of 2004) to
make the decision set out above. The decision finds a reasonable balance between the
interests of customers on the one hand and the interests of investors on the other.
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