Chevron Oil South Africa (Pty) Limited

Transcription

1 Chevron Oil South Africa (Pty) Limited NERSA s Storage Tariff Submission: Tariffs applicable for 2012/2013 For Waltloo and East London depots Initial submission 17 October 2011 Resubmission 10 August 2012 Chevron has adopted the following tariff methodology based on NERSA s revised Tariff Methodology for Petroleum Loading and Storage Facilities, version 2 (31 March 2011) in order to calculate the storage tariff for Chevron s Waltloo and East London depots as required by the National Energy Regulator of South Africa (NERSA). These depots are solely owned and operated by Chevron. The following formula reflects the methodology NERSA will use to evaluate the application for storage and loading fees tariffs with which Chevron has complied in determining our proposed tariff for these depots: Allowable Revenue = (RAB x WACC) + E + T + D + C where RAB = Regulatory Asset Base WACC = effective Weighted Average Cost of Capital E = Operating Expenses for the period under review T = Tax for the period under review D = Depreciation expense for the period under review C = Claw back adjustment to correct for differences between actual and forecast in formula elements for the period under review 1

2 Regulatory Asset Base (RAB): Property, Plant and Equipment and Depreciation: For all assets in operation, the guideline has been applied whereby assets with a book value and for which historical costs exists in that those values are restated to reflect a residual value based on an indexed historical cost. This is determined by inflating the original cost at the time of purchase, year by year, by the published consumer price index (source: Statistics South Africa) from the time of purchase to current. In each year of CPI inflation, we have deducted the actual depreciation charged for that particular year to derive the Cumulative Residual. Working Capital: The formula used for computation of net working capital is inventory (storage only) + receivables + operating cash + minimum cash balance trade receivables as per NERSA s guidelines. For these Chevron depots, only the storage inventory has been included in determining each depot s working capital. Weighted Average Cost of Capital: Chevron s debt/equity ratio is 0000 and based on its audited Balance Sheets for 2009 and 2010, is the same ratio forecasted for Cost of Debt: The forecasted Real post tax cost of debt (Kd) has been calculated based on a forecasted CPI of 5.18% and a nominal cost of debt of 9% (in line with the prevailing prime interest rate). Cost of Equity: The forecasted Real post tax real cost of equity (Ke) is calculated based on the Risk Free Rate on a pre tax basis and then adjusted for Beta. 2

3 The Beta used was as per the guideline provided by NERSA in their most recent guidelines of Beta values based on the debt %. Chevron s range was and we therefore applied a Beta of The Risk Free Rate was determined by using an average of monthly rates for the preceding 300 months (i.e. 25 years) for all government bonds with at least a 10 year maturity as at 12 months before the commencement of the tariff period under review. The data on the government bonds is sourced from the South African Reserve Bank and published by NERSA on their website. The Market risk premium used was the JSE All Share Total Return Index for the preceding 300 months as at 12 months before the commencement of the tariff period under review. This was obtained from the NERSA website Operating Expenses: Operating expenditure comprises of the forecasted depot expenditure and allocated costs. Allocated costs compromises of local and regional operations management support costs plus Service support costs that can be attributed to storage and handling activities. The Services costs allocated comprises of Finance, Human Resources, Information Technology, Legal, Procurement, Health Environment and Safety, Supply and Trading and Business Planning departments. The total forecasted storage and handling allocated costs for Chevron s South Africa depots has been apportioned across the depots basis the projected throughput volume for the period under review. 3

4 Tax: The tax expense is calculated based on a corporate tax rate of 28%. Depreciation: Depreciation expense planned for Claw back adjustment: This adjustment was not applied in the tariff work up. Annual terminal throughput volume: Planned volume for Products: Tariff calculated is based on all petrol grades, diesel and illuminating paraffin. The storage tariffs for all licensed Chevron storage locations will be reviewed annually and submitted to NERSA for approval. 4

5 The rate determined for these depots for the period under review is detailed below: 1. Waltloo (PPL.sf.F3/31/10/2006): Tariff Workup Summary R' million Regulated Asset Base 0000 WACC 0000 Expenditure 0000 Direct 0000 Allocated 0000 Depreciation 0000 Clawback Adjustment Taxation 0000 Total Allowable Revenue 0000 Litres per day 0000 operating days 365 Tariff per litre per day (cpl) East London (PPL.sf.F3/31/20/2006): Tariff Workup Summary R million Regulated Asset Base 0000 WACC 0000 Expenditure 0000 Direct 000 Allocated 0000 Depreciation 0000 Clawback Adjustment Taxation 0000 Total Allowable Revenue 0000 Litres per day 0000 operating days 365 Tariff per litre per day (cpl)