leaderin electricity distribution

a

Annual ReportETHEKWINI ELECTRICITY

Head: Electricity UnitSandile Maphumulo

Deputy Head:HV Operations

Raj Dhrochand

Deputy Head:MV/LV Operations

Roy Wienand

Deputy Head:Technical Support

Veer Ramnarain

Deputy Head:Customer & Retail Services

Sewraj Harilal

Deputy Head:Commercial

Keith Moulder

Senior Manager:Human Resources

Vincent Mthembu

VisionM I S S I O Nleaderin electricity distribution

a

EThekwini Electricity supplies more than 711 095 customers in an area covering

nearly 2 000 square kilometres. This encompasses the area of the

eThekwini Metropolitan Region and some adjacent areas.

Electricity for the main supply to the Metro Region is purchased at

275 000 Volts from Eskom at three in-feed points. EThekwini Electricity also

purchases electricity from Eskom for Winkelspruit, Mpumalanga and Magabeni.

From these points electricity is transmitted and distributed for use by the full

spectrum of customers ranging from the large industrial and commercial sector

to the residential communities. EThekwini Electricity purchases just over 5%

of the total energy generated by Eskom. EThekwini Electricity operates under

the Electricity Regulation Act, 2006. Its policies are determined by the

Metropolitan Council of Durban and the National Energy Regulator of South

Africa (NERSA).

SCOPE

STRATEGYTo develop the Electricity Unit as an undertaking that

maximises the value of its electricity supplies and makes

effective use of all its resources

OUR MISSIONTo provide electricity, public lighting and other energy

services that satisfy our customers and community whilst

maintaining sound business principles.

EThekwini Electricity - a leader in electricity distribution

providing energy for the future.

OUR VISION

VisionM I S S I O N

GRAPHS• Annual Capital Expenditure• Annual Revenue• Systems Maximum Demand• Energy Sales per annum• Growth of Bulk Customers• Average MWh per Bulk Customer• Growth of Business and General Customers• Average kWh per Business and General Customer• Growth of Credit Residential Customers• Average kWh per Credit Residential Customer• Growth of Prepayment Customers

HV OPERATIONSDEPARTMENT• Department Overview• HV Planning Branch• HV Projects Branch• HV Substations Branch• HV Lines Branch• HV Cables Branch• HV Network Control Branch

• Average kWh per Prepayment Customer• Overall Growth of Customers• Overall Average kWh per Customer

per month• Number of Employees• Energy sold per Employee• Free Basic Electricity Claims per month• Average Free Basic Electricity Claims

per year• Distribution of Energy Sales• Distribution of Revenue from Sales• Distribution of Expenditure• New Connections per region

ANNUAL FINANCIALSTATEMENTS• Statement of Financial Position

at 30 June 2013• Statement of Financial • Performance for the year ended

30 June 2013• Statement of Financial Changes

in net assets for the year ended • 30 June 2013• Notes to the Financial • Statements for the year ended

30 June 2013

ContentsMV/LV OPERATIONS DEPARTMENT• Department Overview• Network Control Branch• Construction Planning

and Works Branch• Maintenance Branch• Lighting Works Branch• Lighting Planning Branch

TECHNICAL SUPPORTDEPARTMENT• Department Overview• Communications Networks Branch• Electrical Workshops Branch• Mechanical Workshops Branch• Network Drawing Office

and Survey Branch• Protection and Test Branch• Technology Services Branch• SHERQ and Training Branch

CUSTOMER AND RETAIL SERVICES DEPARTMENT• Department Overview• Pricing and Marketing Branch• Revenue Protection Branch• Meter Engineering Branch• Customer Services Branch• Contact Centre Branch

COMMERCIALDEPARTMENT• Department Overview• Administration Branch• Productivity Branch• Information Technology Branch• Finance Branch• Procurement Branch• Business Risk Branch

HUMAN RESOURCESDEPARTMENT• Department Overview• Human Resources Services Branch• Human Resources Administration Branch• Training/Skills Development Branch

Statistical Data • Customer Base Statistics • Expenditure per annum• Maximum Demand and Energy Sales per annum

I am delighted to report on the Electricity Unit's performance for the 2012/2013 financialyear. It was a challenging yet rewarding year, filled with technical difficulties and servicedelivery success.

The financial footing of the Electricity Unit was strong as we closed off for the year, yieldinga total of R 10.2 billion in sales. Eskom Bulk electricity costs accounted for R 6.4 billion ofthis, leaving behind R 3.8 billion to keep the electrical grid going and growing. With ageinginfrastructure in service, almost R 1 billion was dedicated to repairs and maintenance andthe balance spent on resources, general expenses and expansion/upgrade projects.

A key aspect of our integrated business plan is to expand our network and provide electricityto communities in need. Whilst balancing safety and technical criteria, we were able toelectrify a total of 15 informal communities since inception of the project in 2011. Wemanaged to complete 8 areas within this year despite, matters arising around land ownership,budget and internal capacity constraints. We are committed to continue withthe electrification program and will keep uplifting our communities in need.

Our electricity tariff increase was set at 11% for the year, with residential tariffs peakingat 9.8%. Business and Industrial tariffs saw a price hike of 12% on average. Relief for theindigent sector was provided in the form of access to Free Basic Electricity and a reducedtariff increase of 5.41%.

With the rising tariffs and the slow moving economy, we experienced negative growth(-) 0.44 % as opposed to the forecasted (+) 1% that we hoped for. Whilst sales are declining,we maintain a positive outlook. We are continuing with capital expansion programs, ensuringthat the network is available and in “tip top” condition to support the future recoveringeconomy. This includes moving towards Smart Grid technologies with the aim of optimizingour network control and efficiency.

Health and safety of staff is of paramount importance. We are pushing the boundarieshard, to ensure that safety is entrenched within the minds of all staff working on the network.Stricter controls and measures have been implemented, including a proposed DemeritSystem to address safety violations by contract service providers. We experienced anaverage of 15 safety related incidents per month, over the last year. Going forward, we arehoping that our new control measures will slash this number, helping us move closer to a“zero injury rate”.

In an effort to build capacity and promote skills transfer, we have embarked on a rigoroustraining program via the Work Skill Portal (WSP) to ensure staff is adequately preparedto work on the network. We are aiming to build technically competent individuals that areable to uphold the services, values and systems of the Municipality in a professional anddignified manner.

In conclusion, I want to salute my team for the unified support that they provided throughoutthe year. Whilst further challenges and obstacles are sure to cross our paths, we mustkeep on going, and not lose sight of our vision to make eThekwini the most caring and livablecity in Africa ……….

Sizobonana ngonyaka ozayo !!

RS MAPHUMULO

ELECTRICITY

SALES

R 10.2 Billion

ELECTRICITY

PURCHASES

R 6.4 Billion

STAFF

COMPLIMENT

*2240

TOTAL

CUSTOMERS

*711 095

ELECTRICITY

TARIFF INCREASE

11 %

TOTAL

ENERGY SOLD

10 744 964 MWh

MAXIMUM

DEMAND

1 828 MVA

TOTAL

ENERGY BOUGHT

11 412 377 MWh

Head’sOverview

HV OperationsDepartment

The HV Operations Department is responsible for the planning, construction, operation and maintenance of eThekwini

Electricity's primary network of high voltage lines, cables and substations. The projects undertaken by this Department

are to provide for increased bulk capacity and to improve the reliability of the regions electricity supply.

Accordingly they are typically large, high cost projects which require considerable time and attention to satisfy

environmental legislation in the first instance and then 30 months or more in the construction phase.

Our Department prides itself in providing reliable, state of the art solutions for the delivery of high voltage power from

our intake points to our customers and secondary networks.

Senior Manager:HV Substations

Planning, construction,

operation and

maintenance of high

voltage lines, cable and

substations

Executive Secretary

Senior Manager:HV Planning

Senior Manager:HV Projects

DEPUTY HEAD:HV OPERATIONS

Senior Manager:HV Lines

Senior Manager:HV Network Control

Senior Manager:HV Cables

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HV PLANNING BRANCHThe HV Planning Branch is responsible for planning the unit's primary network of high voltagecables, lines and substations. The timelines for providing HV infrastructure spans severalyears and therefore necessitates careful planning so as to ensure that there is sufficientHV infrastructure in place to meet the City's ever increasing demand in a sustainablemanner. The HV Planning Branch is the custodian of the transmission network master planwhich is inclusive of a twenty year capital program that allows for HV network development,reliability requirements and refurbishment requirements. Key initial capital project life cycleprocesses; namely application for council funding, acquisition of land and servitudes,environmental impact assessment approvals and completion of preliminary designs is alsocompleted by the branch.

HIGHLIGHTS AND LOWLIGHTS� Handed over to HV Projects for execution - establishment of Springpark 132/11 kV

Substation.� Handed over to HV Projects for execution - upgrade of Rossburgh 132/33/11 kV

Substation.� Handed over to HV Projects for execution - upgrade of Prospecton 33/11 kV Substation.� Handed over to HV Projects for execution - upgrade of Congella 132/11 kV Substation.� Delays in securing servitude for new 132 kV supply to Sapref due to sale of land by ACSA

to Transnet for the new dig out port.� Delays in acquiring servitudes for the overhead transmission line to the proposed new

Mahogany Ridge Substation

PROGRESS ON EXISTING PROJECTS� Bulwer 132/11 kV Substation - Design Proposal stage� Austerville 132/11 kV Substation - Land Acquisition stage� Frametex 132/11 kV Substation - Land Acquisition stage� Verulam Switching Station - Land Acquisition stage� Verulam 132/11 kV Substation - Land Acquisition stage� Mahogany Ridge 132/11 kV Substation - Land Acquisition stage� Kloof 132/11 kV Substation - Land Acquisition stage� Stockville Switching Station - Land Acquisition stage� Reunion 132/11 kV Substation - Land Acquisition stage� Bellair 275/132 kV Substation - Design Proposal stage� Klaarwater-Umgeni OHTL upgrade - Design Proposal stage� Woodlands 132/11 kV Substation - Design Proposal stage

KEY CHALLENGES� Long acquisition time lines for sites and servitudes - foster a closer working relationship

with Real Estates Department.� Long turn-around times for wayleave approvals by third parties - meet with management

of third parties with a view to agreeing on an approval process and reasonable turn-around time for both parties.

� Registering servitudes for properties where HV infrastructure exists without servitudeagreements - work jointly with Real Estates Department to work through backlog.

� Retention of experienced Planning Engineers - the Branch lost two Engineers during theperiod under review.

ACHIEVEMENTS� Planning Engineers have acquired the skills to maintain the Geograhical Load Forecasting

model in house rather than outsourcing this activity to the private sector.

HV PROJECTS BRANCHThe HV Projects Branch is responsible for the detailed design and specification of equipmentand management of major system reinforcement projects. There were 32 projects inprogress during the 2012/2013 year.

PROGRESS ON EXISTING PROJECTS:� Phoenix Industrial 132/11 kV Substation: Replacement of the ageing and unreliable

11 kV switchgear. First phase complete. Second phase in progress.� Hillcrest 132/11 kV Substation: Replacement of the ageing and unreliable 11 kV

switchgear. Fourth phase of the replacement has been commissioned. Fifth and final stage in progress.

� Phoenix North 132/11 kV Substation: The commercial and residential load demand has increased and the firm capacity needs to be upgraded from 30 MVA to 60 MVA. Commissioned.

� Fynnlands 132/11 kV Substation: The commercial and residential load demand has increased and the firm capacity needs to be upgraded from 30 MVA to 60 MVA. Commissioned.

� Umbogintwini 132/33 kV Substation: Replace the 33/11 kV transformers with132/11 kV transformers and associated equipment. Final commissioning in progress.

� Umhlanga Ridgeside 132/11 kV Substation: This substation will provide supply to thevarious Umhlanga developments and also facilitate the de-commissioning of the old andunreliable Umhlanga and Glenashley 33/11 kV Substations. Final commissioning inprogress.

� Pineside 132/11 kV Substation: Conversion required from the 33/11 kV system to themore reliable 132/11 kV system. Commissioned.

� Kingsburgh 132/11 kV Substation: New substation for the anticipated demand in theWinkelspruit and Illovo areas and de-commissioning of parts of the old and unreliable33 kV network in the Southern region. Installed 2 x 132/11 kV transformers andassociated 132 and 11 kV switchgear. Commissioned.

� Klaarwater 275/132 kV Substation: Upgrade current 250 MVA transformers to315 MVA due to the increase in load. The fifth transformer and all its associated equipmenthas been installed and commissioned. Procurement for the replacement of the other4 x 250 MVA 275/132 kV transformers and their associated equipment are in progress.

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� Randles 132/11 kV Substation: New substation being fed by the more reliable132 kV system due to the Sydenham 33/11 kV Substation reaching its firm capacity.Commissioned.

� Mondi 132/33 kV Substation: Establishment of a new 132/33 kV substation to increasereliability to large industrial customers in the Southern Industrial Basin. New142 MVA 132/33 kV transformer have been installed. 33 kV switchgear and feedercables are on order.

� Pinetown 132/11 kV Substation: The commercial and residential load demand in thePinetown, New Germany and Cowies Hill areas has increased and the firm capacity needsto be upgraded from 30 MVA to 60 MVA. Advanced stage of pre-commission testing ofthe plant.

� Newlands 132/11 kV Substation: The commercial and residential load demand in thearea has increased and the firm capacity needs to be upgraded from 30 MVA to60 MVA. Installed 2 x 30 MVA transformers and associated 132 kV equipment and infinal stages of being commissioned. First phase commissioned. Second phase in progress.

� Blair Atholl 132/11 kV Substation: The commercial and residential load demand in theWestville area has increased and the firm capacity needs to be upgraded from 30 MVAto 60 MVA. Advanced stage of pre-commission testing of the plant.

� Havenside 132/11 kV Substation: The commercial and residential load demand in theChatsworth area has increased and the firm capacity needs to be upgraded from30 MVA to 60 MVA. 132 kV switchgear has been installed and final testing is in progress.

� Karim Lane: Replacement of the 11 kV switchgear required due to its age and unreliability. First phase of the replacement is complete. Second phase in progress.� Ridgeview 132/11 kV Substation: The commercial and residential load demand in the

Cato Manor area has increased and the 11 kV system needs to be reinforced. Awaitingfinal energizing.

� Clermont 132/11 kV Substation: The commercial and residential load demand in thearea has increased and the firm capacity needs to be upgraded from 30 MVA to60 MVA. Commissioned.

� Mobeni South 132/11 kV Substation: The commercial and residential load demand inthe Mobeni South area has increased and the firm capacity needs to be upgraded from30 MVA to 60 MVA. New 11 kV switchgear has been energised through the existing11 kV switchgear.

� Greenbury 132/11 kV Substation: The commercial and residential load demand in thearea has increased and the firm capacity needs to be upgraded from 30 MVA to60 MVA. All primary plant has been installed and final testing in progress.

� Umdloti Beach 132/11 kV Substation: The commercial and residential load demand inthe area has increased and the firm capacity needs to be upgraded from 30 MVA to60 MVA. Transformers relocated.

� Ottawa 132/11 kV Substation: Transformers were moved to more critical substationsand two new transformers are required. 132/11 kV transformers have been installed.Commissioned.

� Dalton Rd 132/11 kV Substation: The commercial and residential load demand in thearea has increased and the firm capacity needs to be upgraded from 30 MVA to60 MVA. Pre commission testing in progress.

� Plangweni 132 kV Substation: New 132 kV switchyard required to feed the TransnetPump station. All primary plant has been installed and final testing in progress.

� Spare 11 kV Mobile Switchgear: Required for on-going projects and maintenance. Sparemobile switchgear is on order.

� Marrianridge 132/11 kV Substation: The commercial and residential load demand inthe area has increased and the firm capacity needs to be upgraded from 30 MVA to60 MVA. Commissioned.

� Chamberlain Road: Replacement of the 11 kV switchgear required due to its age andunreliability. To follow after completion of Karim Lane project due to availability of temporary11 kV switchboard.

� Jameson Park 132/11 kV Substation: The commercial and residential load demand inthe area has increased resulting in the need to upgrade the existing 33/11 kV Substationand replace it with two new 30 MVA 132/11 kV transformers and associated plant and

equipment. Detailed Architectural design and plant procurement in progress.� Umlazi 132/11 kV Substation: The commercial and residential load demand in the area

has increased and the firm capacity needs to be upgraded from 30 MVA to 60 MVA. Civil work complete. Installation of plant and equipment in progress.

� Sapref 132/33 kV Substation: The 33 kV supply to Sapref refinery replaced with moresecure supply from the new Sapref Substation. Civil work complete. Installation of plant and equipment in progress.

� Durban South 275 kV Bus Section: Required to improve the security of supply at thisstrategic substation. Installation of plant and equipment in progress.

� K E Masinga 132/11 kV Substation: The commercial and residential load demand in thecity area has increased and the 11 kV system needs to be reinforced. Detailed Architecturaldesign and plant procurement in progress.

HV SUBSTATIONS BRANCHThe HV Substations Branch of HV Operations deals with the operation and maintenanceof equipment that has voltage ranging from 11 kV to 275 kV. There are five National keypoint substations that import energy from Eskom at 275 kV. The 275 kV is then transformedto 132 kV, 132 kV transformed to 33 kV and 11 kV, and 33 kV is then transformed to11 kV and in few cases to 6.6 kV. The types of equipment that the HV Substation Branchworks on, covers switchgear, power transformers, instrument transformers, busbars, surgearresters, lightning masts, and power line carriers. The different types of insulating mediumin circuit breakers are oil, vacuum and gas. The oil circuit breakers are of old technologythat render themselves uneconomical to maintain and unsafe to operate. Consequentlythey are gradually being phased out and replaced by vacuum and gas circuit breakers.

However there is still a large amount of oil circuit breakers present in HV substationsespecially at 11 kV and also at 33 kV. As a result more resources (staff, labour, material,and time) are spent on maintaining this type of switchgear.

7

A significant amount of plant is older than 30 years of age. There are frequent problemsassociated with their old age such as shortage of spares and mal-operation and severefailures. The decision was taken to phase out 33 kV plant and equipment because of ageand other associated problems such as unavailability of spares and multi transformation.The decommissioning of such plant and equipment has been made possible by constructionof new 132/11 kV substations.

HIGHLIGHTS� The diagnostic testing and condition monitoring programs have been improved.� The securing of Doble international contract to perform the transformer fleet screening.� The continuous Endeavour to do full maintenance of transformers and its ancillaries,

switchgear, isolators, and earth switches in HV yards and switchgear rooms.� The reduction of outstanding maintenance work orders.� The reduction of equipment that is out of commission.

LOWLIGHTS� The incidents of copper theft in HV substations are on the rise and they are threatening

substations' stability. The copper theft cases are occurring despite the existence ofSecurity guards in those substations that are manned.

� The delay in the installation of CCTV cameras in substations to deter the prospectivecopper thieves.

� The failure of three panels at City Central substations.� The outage at Congella substation due to the failure of glass disc insulator on the

132 kV busbar.� The outages caused by monkeys at Umbongotwini substation that feed one of our major

customers.� The delay in the restoration of the 315 MVA transformer at Lotus Park due to the

unavailability of the suitable tap changer in South Africa.� The Network protection mal-operations subjecting the plant to severe and lengthy fault

currents.

CHALLENGES� The maintenance of substation stability during this era of many cases of copper theft.

The copper theft has become a crisis.� The insufficient human resource to fulfill the requirements of the branch.� The supply chain management policy contributes to the delays in securing services

and products that help in restoring good condition of plant and equipment.� The usage of two different Enterprise Asset Management Systems (JDE and Ellipse) that

are unable to interface and resulting in delaying projects where Electricity work isoutsourced to Architectural Services. This also results in a lot of unnecessary paper work.

� The shortage of office space leads to difficulty in filling some critical posts.� The category 8 pay curve still poses a threat in the filling of critical posts such as electrical

Inspectors.� The condition and ageing of vehicle fleet.� Keeping the aged equipment such old oil circuit breakers, running.

� Lengthy procurement processes.� Difficulty in getting plant and equipment to maintain due to inability to shift loads to other

parts of the network. This problem makes it difficult to maintain plant and equipmentduring normal working hours. Hence increases overtime hours.

HV LINES BRANCHThe HV Lines Branch is responsible for the operation and maintenance of the high voltageoverhead line system presently consisting of 141 circuit kilometers of 275 kV,478 circuit kilometers of 132 kV and 13 circuit kilometers of 33 kV overhead line.

CHALLENGES:� There are still on- going theft of tower steel members in-spite of the division embarking

on increasing patrol on HV Lines.� Suitable off road (4x4) vehicles is becoming quite a challenge as the access roads are

becoming more difficult to negotiate with the encroachment of informal settlements anddevelopments within the power line corridors.

� Maintaining full compliment of trained staff is still a challenge due to high number of vacancies and movement within various departments and the country as a whole.

ACHIEVEMENTS:� The commissioning of the 132 kV Avoca substation in the north and the Kingsburgh

substation in the south, has reinforced the security of supply in the region, it has enabledus to eliminate 23km of 33 kV copper overhead line previously supplying this region,which was unreliable and continually being stolen.

� The Branch is in the process of finalizing the award of theft detection units which it willstart rolling out on our high risk strategic power lines with the proposed initial purchaseof 250. (Contrat E9135)

� Refurbishment project (E8960) is in progress with the following stages of completion• 275 kV Illovo - Lotus Park 90%• 275 kV Avon - Ottawa 35%• 132 kV Ottawa - Canelands 85%• 132 kV Durban South - Lotus Park 75%• 132 kV Bellair - Rossbrugh 60%• 132 kV Bellair - Mayville 10%• 132 kV Avoca - Tee Ottawa 10%

� All management and supervisory staff are attending PRAGMA asset management courseswhich is aimed at improving managing of assets and the utilizing best practices andpolicies and to meet GRAP 17 requirements

� One electrician has successfully achieved his switching authorisation up to 275 kV with4 more staff in the process of being trained.

8

� As part of improving skills of staff in the branch some of our staff have attended HV Linesmaintenance course , Infrared scanning course and also Design and construction course.

FUTURE PLANS:� In future the branch is looking at building a specialized line to assist with training of our

electrician and electrician assistants. This will be used for new HV Lines staff training onclimbing and working at heights safely.

� To purchase a 4X4 , aerial platform truck for easy & safe working at heights.

Also the awarded contract (E.8960) will continue to carry out refurbishment project. Inaddition to the above work in progress the following projects will be starting under thiscontract:1. 275 kV Ottawa - Durban North - Steel replacement and painting.2. 132 kV Durban North to Park Hill - Steel replacement and painting.3. 132 kV Tee SATS Canelands - Full refurbishment.4. 132 kV Tee Duffs Road - Steel replacement and painting.5. 132 kV Tee Marianridge - Steel replacement and painting.6. 132 kV Ottawa - Parlock - Steel replacement and painting.

HV CABLES BRANCHThe High Voltage (HV) Cables Branch is responsible for the maintenance and operation ofall 132 kV and 33 kV underground transmission cables, as well as all the 11 kV cables thatform part of the primary network infrastructure.

The chart below is an illustration of the cable system types and circuit lengths that thebranch is responsible for, as at the end of 2012/2013 financial year.

CHALLENGES� The maintenance of pressurised gas-filled and fluid-filled cables continues to be a problem

especially on the gas-filled cables. However, major projects are under way to replaceseveral unreliable cable circuits of this type in the near future. Some of these projectswill see unreliable gas-filled cable circuits viz Mayville-Huntley's Hill 1&2 and Mayville-Sydenham 2&3 decommissioned within 2013/2014 financial year. In 2012/2013financial year two of these gas-filled cable circuits were replaced with the reliable XLPEcable circuits. Although there is progress being made regarding these problematic cables,it will take some time before they are completely phased out of the network, thereforethe Branch is also investigating some short term solutions to efficiently maintain thesecables and solve problems associated with these cables, such as the bulk gas storagein order to reduce the frequency of gas re-filling, thus allowing electricians to focus moreon tactical maintenance.

� Cable jointing and terminating is a routine activity for the branch, this is intricate, timeconsuming and a specialised process. Over the past years this branch has been underpressure when it comes to performing these jointing and terminating duties due to issuessuch as resource availability and difficulty in hiring new skilled electricians due to thegeneral lack of skill in this field countrywide. To strengthen and enhance the skills of in-house electricians, the Branch appointed a specialist to conduct a week long theoreticaland practical training course for electricians. In 2013/2014, the Branch intendsorganising more of these courses which will be highly beneficial more importantly to thenewly appointed electricians.

HIGHLIGHTS AND LOWLIGHTS� In 2012 - 2013, the Branch experienced an unprecedentedly high number of 132 kV

fault, with three faults on 132 kV fluid-filled cables and two faults on 132 kV XLPE cables.Although two of these faults were a result of third-parties (damages and theft), three ofthese faults were cable electrical faults which highlighted the need for the Branch tofocus more on tactical maintenance in order to prevent these faults before they occur.

� The Branch also went out on a public tender and appointed a contractor on a genericmaintenance contract that, moreover jointing and terminating, includes other type ofwork that is frequently performed by the branch. This will assist in reducing the overduemaintenance and ensure that more focus is on tactical and preventive maintenanceinstead of non-tactical and reactive maintenance.

FUTURE PLANSIn 2013 - 2014 the Branch will give more attention in researching and evaluating thediagnostic testing equipment for 33 kV and 132 kV cables. Once the Branch has identifiedthe technically and economically viable equipment, this will be budgeted for and purchasedin order to undertake diagnostic testing of cables to reduce the risk of unplanned and costlyoutages. The Branch also intends purchasing the ready-to-use stand-by cable links that willbe used to bypass 'some' substation equipment during maintenance and or repair operations,offering the continuity of supply to maintain end-consumer satisfaction and avoid businesslosses.

Circ

uit L

engt

hs (k

m)

0

CABLE TYPES

20

40

60

80

100

120

132 kVFluid Filled

132 kVXLPE

33 kVFluid Filled

33 kVGas Filled

33 kVXLPE

33 kVPILC

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HV NETWORK CONTROL BRANCHThe Network Control Branch comprises of four Divisions: HV Network Control, SystemPerformance, Network Management and Control Systems.

The HV Network Control Division is responsible for the safe operation and efficient performanceof the High Voltage Network, which incorporates a 24-hour, manned HV Network ControlCentre with remote control and alarm facilities. eThekwini Electricity's primary transmissionnetwork, being the supply from 275 000 V down to 6 600 V, is monitored and controlledfrom this Control Room using a sophisticated Supervisory Control and Data Acquisition(SCADA) system.

The System Performance Division is responsible for network optimization, ensuring the HVNetwork can meet the demand for electricity, statistical reporting and quality of supply tothe bulk supply points for the 11 000/6 600 V distribution system and large industrialcustomers that are connected directly to the HV network.

Network Management and Control Systems Divisions are responsible for the planning,operation, maintenance and reinforcement of systems to monitor, protect and control theUnit's primary supply infrastructure.

HIGHLIGHTS AND LOW LIGHTS� The new quality of supply management system has proven valuable to customers and

the HV Network Control Division. The system includes a new custom-built performance analysis tool.

� A legacy Remote Terminal Unit (RTU) replacement program is well underway. To date,30 % have been substituted with state-of-the-art hardware featuring increased functionalityand provision for electrical network expansion.

NEW TECHNOLOGIES� To improve quality of supply to customers, the Branch has commenced a drive to roll out

remote master trip resets which will facilitate improved remote restoration of supply.� The Branch is investigating the Fault Detection Isolation and Restoration (FDIR) tool t o

limit/prevent the amount load lost when a network fault occurs. The reduced risk of loss of supply on the HV network will permit a higher volume of maintenance.� The Branch is finalising the incorporation of Under Frequency Load Shedding (UFLS) into

the Integrated Control and Protection (ICAP) system which will ensure eThekwini Electricitysheds the required amount of load during an under frequency event to prevent a nationalblackout.

� With different branches utilising various applications and platforms, data transfer fromSCADA system to other application platforms has become necessary. The Branch iscurrently establishing a data exchange server to facilitate bi-directional real-time datatransfer between SCADA platform and other applications within the organization.

� Using existing communication systems infrastructure, the Branch is investigating thefeasibility of Integrated Volt-Var Control (IVVC), to minimize losses and manage voltagewithin an acceptable range.

� The Division has also embarked on a cyber security drive over the last year. A securitypolicy has been drafted for phase one of the security audits which will begin in early 2014.

CHALLENGES� Staffing of the HV Control Room continues to be a challenge given that Eskom and other municipalities compete for a very small pool of scarce skilled employees.� EThekwini Electricity faces the same security challenges as other major electricity

distribution organizations in South Africa. Theft of plant and equipment from substationsis a growing concern and the Branch is embarking on the following projects to combattheft:- An organization level substation security policy is currently being developed and compiled.- Closed-Circuit Television (CCTV) camera system is currently being rolled out at substation

sites. These cameras achieve high resolution and perform world class video analyticswhich then enables the business to achieve a high apprehension rate as well as make

provision to study break-in loopholes within the substation infrastructure.- Upgrading the existing access control system with a design improvement based on

current experience and security systems best practice.

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MV/LV OperationsDepartment

The MV/LV Operations Department is responsible for the planning, construction, operation and maintenance of the Unit's

medium and low voltage network. The department plays a major role in connecting new customers to the electrical grid

thus helping to spread electrical services to all sectors of the community. The department is also responsible for providing

public/street lighting and has a strategic focus of introducing new and improved energy efficient lighting technologies into

the city. Further to the above roles, the department manages and controls all medium to low voltage substations.

Advancements in technology with the benefit of cost/operational optimization is driving significant changes in the

electricity supply industry and the MV/LV Department is strategically embracing these advancements to improve the

overall operation, stability and reliability of the network.

Planning, construction,

operation and maintenance

of medium and low voltage

network

Executive Secretary

DEPUTY HEAD:MV/LV

OPERATIONS

Senior Manager:Maintenance

Senior Manager:Lighting Works

Senior Manager:Lighting Planning

Senior Manager:ConstructionPlanning &

Works

Senior Manager:Network Control

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NETWORK CONTROL BRANCHThe reliability of our electrical network is vitally important as disruptions in power supplyleads to economic losses, lost productivity and it affects public health and safety. The NetworkControl Branch closely monitors network performance and manages incident responseson a twenty four (24) hour basis. We play an important role in providing solutions to ensurethe security, stability and continuity of supply to eThekwini Municipality's area of supply. Ourdedicated team are responsible for running the electrical network and in the event of asystem disruption, we must respond appropriately and promptly to facilitate the co-ordinationof the system and customer load restoration.

The various contributing factors to power outages include theft on our network, inclementweather conditions and defective equipment. For the period under review the following faultswere attended to;

Type of Fault Number of incidents

Individual Faults 251 011

LV Faults 10 272

MV Faults 5 683

Total 266 966

HIGHLIGHTSWe take pride in providing dedicated teams and standby staff at special events such asElections, Conventions and Sport Tournaments. Our staff works behind the scenes toensure a stable power supply and backup power where necessary.

Last financial year the project for new offices for the Faults Division of Network Controlreached completion. We are pleased to announce that the staff moved into the new premisesin Springfield and the operational efficiencies have pleasantly improved.

CHALLENGESThe growth in the demand for electricity is ever increasing given our population growth andthe exponential increase in the number of power-hungry digital components, bigger houses,air conditioners and computers. However as demand skyrockets, further limiting efficiencyand reliability of our network, there is a need to reinforce and upgrade our electricinfrastructure. The evolution of the Smart Grid has the potential to transform day to dayoperations of Network Control. A Smart Grid enables vastly improved system reliability.Distribution operations will become proactive instead of reactive, identifying and repairingequipment, cables and lines before failure occurs and shedding load to operate within designlimits of transformers, circuits, and substations.

Theft on our electrical network is still on the rise, resulting in delays in service delivery toour consumers.

One of the main threats is that of copper conductor theft and it is estimated to be in excessof R 5 billion a year around various municipalities within the country. We currently assistthe SAPS to identify cable at the scene of thefts and report all cases of cable theft to theSAPS when they are discovered while attending to faults. The Southern African RevenueProtection Association (SARPA) have proposed a cable marking standard initiative and inaccordance with the new Second Hand Goods Act there will be no loopholes when prosecutingsuspected thieves in the future as the copper conductors will be easily identified.

FUTURE PLANSThe implementation of an Advanced Distribution management System (ADMS) made upof Outage Management (OMS) and Distribution Management (DMS) systems will dramaticallyincrease efficiency and form the bridge between engineering reality and emerging consumerneeds. As staff in the control rooms gain access to more and more data, they will needtools to convert the data into actionable information for visualizing what's going on, spottingproblems and exceptions, remotely controlling equipment, handling outages, and planningahead. Real-time and historical data will be fed into asset management, workforcemanagement, outage management and back office functions to gain cross-functional processefficiencies. In the forth coming months we will concentrate on fully implementing the newsolution, integrating it with other key operational systems, and train our operators and usersof the new solution.

In the year ahead, we will embrace a shared vision for significant technology and businesschanges in order to ensure an acceptable quality of supply and service to our fellow citizens.

CONSTRUCTION PLANNING AND WORKS BRANCHEThekwini Electricity has taken a decision to improve the lives of the poorer communitiesby providing electricity to transit facilities and informal settlements. The electrification grantfrom the Department of Energy assisted in electrifying 9,986 low income and informaldwellings so that at least another 40,000 people can enjoy a better life. 1,069 non-prepaidsupplies were provided to other residential developments within the eThekwini municipalarea.

HIGHLIGHTS AND LOWLIGHTSThis Branch spent 92% of its operating budget of R111million, and overspent the capitalbudget of R197million by 12%. Some of the major capital projects include:

� Rerouting of medium voltage circuits from the Illovo, Smithfield and Winkelspruit33/11 kV substations into the recently commissioned Kingsburgh 132/11 kV substation

� Laying circuits from Northdene 132/11 kV substation to re-inforce the Sarnia/Pinetownareas

12

� Re-configuring the medium voltage circuits in the Overport/Sydenham/Springfield area� Installation and commissioning of 11kV switching stations� Upgrade of voltage from 6.6 kV to 11 kV in the Umbilo area

During the year there were four minor accidents and two disabling injuries within this Branchand achieved a 5 star safety rating.

CHALLENGESWhile we have managed to attract a few more employees the Planning and ConstructionBranch still has 58% of its posts vacant. Vacant positions include Electricians, Techniciansand Engineers. The Branch relies on the services of Consultants to process applicationsfor new connections and manage the installation of service connections. Contractors havecontinued to complement our staff in implementing our infrastructure projects. The effortsof all our staff and agents are greatly appreciated.

MAINTENANCE BRANCHThe Maintenance Planning and Works Branch is responsible for inspection, maintenanceplanning and maintenance implementation on all medium and low voltage apparatus as wellas repair of associated faults on the electrical distribution network within the municipalsupply area. This Branch comprises of six regional works depots and a Maintenance PlanningDivision based at the Electricity Headquarters. The Branch consists of a Senior Manager,Managers, Specialist Engineer, Engineers, Technicians, Electricians and the various levelsof administration and assistant staff.

The Maintenance of eThekwini Electricity's distribution network is vital in ensuring the integrityand reliability of supply to our large customer base. This Branch prides itself on highstandards and strives to comply with various national standards and the Power QualityCharter in order to meet the requirements of customers. The major challenge facing theBranch is the growing pandemic of theft of electrical infrastructure.

CHALLENGESThe growing global need for non ferrous metals such as copper has resulted in high volumesof theft of electrical infrastructure both locally and abroad. The net result for this Branchis that it theft has significantly increased the workload, maintenance budgets had to besignificantly increased, supply restoration times have increased and the integrity of theelectrical network becomes compromised. The Electricity Unit is however investigatingvarious methods of monitoring and dealing with the scourge of theft. Rapid growth of theelectrical network coupled with the shortage in human resources and an increase in failures,has resulted in significant backlogs of planned and preventative maintenance work. TheBranch has undertaken an aggressive recruitment drive, during the year under review tobolster its internal resources and reduce the reliance on external service providers.

Various appointments were made at all levels and the staff vacancy levels have significantlyreduced. The technical staff will however, need to go through a mandatory pre-competencyperiod before they are deemed to be fully functional and are able to work independently.

The Branch is in the process of researching various technologies that may assist with theextremely challenging conditions and the immense workload. Our Engineers are currentlyinvestigating cable and switchgear diagnostic systems that will assist in the conditionmonitoring of these apparatus. Various options are also being looked at in order to assistwith vegetation management and control.

While the network is reliable, the branch realized that there is still a room for improvement.One of the factors contributing to the reliability is the construction practice, which usedbare (un-insulated) jumpers to connect MV overhead equipment (e.g. Pole Transformer,Auto-recloser and Sectionaliser) for distribution of electricity. Problems arising from thisare high number of faults due to electrocution of animals, birds and snakes. To resolvethese problems, the branch conducted market research and tests which resulted in coveringof bare jumpers using LDPE pipe (flexible water pipe with UV rating). Mount Morelands wasidentified as one of the areas with high animal/birds electrocution and power interruptions.A pilot project was undertaken late last year (2012) in this area in which five Pole Mountedtransformer jumpers were covered. No single animal/bird electrocution case was reportedto the branch by residents and no power interruption due to monkeys or birds was registeredsince then. The branch then took decision to roll out the covering of bare jumpers throughoutthe network in areas with high animal and birds activities.

The Branch has seen a significant increase in maintenance expenditure over the past fewyears. This figure has increased significantly, especially during the past five years and is nowin excess of R400 million per annum. This increase in expenditure was mainly due to aconsiderate focus on fault rectification caused predominantly by ageing network, third partydamage, theft of infrastructure, vandalism and the acquisition of external service providerswhich has resulted in reduced levels of workmanship. The co-operation of internal staff,consultants and contractors in delivering an acceptable level of service to our customersis vital in ensuring that this Branch meets it objective.

13

LIGHTING WORKS BRANCHLighting Works Branch is responsible for construction and maintenance of about 200 000streetlights in the whole of the eThekwini Municipality area of supply. The Branch is constantlybeing challenged technical in dealing with theft related faults, which are forcing the technicalinnovation of the branch to come up with ways and means of minimising theft. Though thecurrent situation has not changed much but the theft rate has decrease.

The Branch bid farewell to one of its long serving superintendent who managed theconstruction division of Lighting Works. The Branch highlight was the successful completionof an OHM competency by one of our electrician and with the third one embarking on thesame exchange programme as a skills improvement. The Branch welcomed a new electrician.The Branch achieved an overall 5 star NOSA rating the financial year. The set target of70% turnaround time on faults/complaints received and attended to within five workingdays is still a priority in ensuring service delivery to the municipality supported by the currentlyrunning maintenance and construction contract E 9103.

LIGHTING PLANNING BRANCHThe Lighting Planning Branch is responsible for the planning, design, inspection andmaintenance planning of the public lighting infrastructure for the eThekwini Municipality.This includes the planning and design of new lighting installations, upgrading of existinglighting infrastructure, research and investigation into new lighting technologies and bulklamp replacements.

A major responsibility of this Branch is the planning and design of capital projects. Theannual capital budget for the financial year under review was R27million and projects wereplanned for upgrades from conventional technologies to LED streetlighting, major routeimprovements, new major routes, lighting of parks and sundry lighting. Grant funding ofR20m was received from EEDSM for the installation of LED streetlights to replace the80 W mercury vapour luminaires in residential areas, 150 W high pressure sodiumluminaires on secondary roads and 250 W high pressure sodium luminaires on mainarterial roads. Other major projects for the current and future financial years include; IllovuRoad (Kwamashu), Newlands East Drive, Umgeni Road/N2 Interchange, Church Road(Westville) completion of MR 577 (Kwadebeka), School Road (Verulam), Wadd Street(Tongaat), Hlongwane Road (Bothas Hill), M4 Ruth First Northern Freeway, Inanda Road(Waterfall) and floodlighting for ablution facilities in informal settlements.

A majority of the projects undertaken by the branch involves intense interaction with otherservice units and external entities such as Roads Provision, Architectural Department,Parks, Leisure & Cemeteries, Roads and Stormwater, Strategic Projects, Tongaat Hulettsand a host of developers and external electrical consultants.

The Branch plans and designs conventional and special lighting projects for these entities,and takes into account any specific requirements for each of them.

The Branch operates on an annual budget of approximately R20 million, taking into accountsalaries, allowances, general expenses, repairs and maintenance. Repairs and maintenanceaccounts for 80 percent of this operating budget and this is further broken down intoplanned lighting maintenance, bulk lamp replacement and pole painting. There are currentlyapproximately 187 000 streetlight installations, 49 cemeteries, 250 parks, 12 beaches,17 subway lanes, 31 swimming pools and 93 stadia and sports fields for which themunicipality is responsible and provides lighting for.

With energy efficiency still remaining a hot topic globally, the branch continues to dedicateresearch and investigation into energy-efficient lighting solutions. Technology such as LEDlighting is being hailed as the future of lighting and is becoming increasingly present in thelighting environment. Consumers have shown a great appreciation of this “new” white light.In addition, the branch is considering a telemanagement system of lighting control wherebylighting levels along major routes could be reduced by dimming for that part of the nightwhere traffic volumes are minimal. These systems also have the facilities of added monitoringof lighting infrastructure which could significantly assist with the spiraling scourge of theftand vandalism

The Branch has recently achieved an acceptable staff compliment and we now aim to workon building their skills and experience within the Division. The long-term goals are to initiatecomplete audits of all public lighting systems and undertake the necessary upgrades andimprovements thereof.

14

Executive Secretary

DEPUTY HEAD:COMMERCIAL

Technical SupportDepartment

The Technical Support Department provides a diverse range of specialist services within the Electricity Unit. These

services contribute towards the Vision of the Unit, which is to be a leader in electricity distribution providing energy

for the future. The Department comprises of seven Branches, that ensure resources are effectively and efficiently

utilised so that value is added to the 711 095 customers that the Electricity Unit supplies. The Technical Support

Department goals are set to achieve continuous improvement in all its operations.

Support to critical Divisions

of the business

Manager:MechanicalWorkshops

Manager:Drawing Office

Senior Manager:Protection & Test

Manager:Electrical

Workshops

Senior Manager:Technology

Services

Manager:SHERQ

& Training

Senior Manager:Communications

Network

DEPUTY HEAD:TECHNICALSUPPORT

15

COMMUNICATION NETWORKS BRANCHThe Communication Network Branch is responsible for the fiber, radio/wireless, technicaldata, copper pilot and other mediums of communication networks that provide vitalcommunication links for all technical systems/equipment that monitor, control and protectsall electrical plant and equipment in the HV transmission and MV distribution networks fromwhich all customers are supplied. It also provides fiber communication cores/data channelsfor the City and other departments within Electricity.

The aim of this Branch is to investigate, design, plan, implement, maintain and repair therequired communication networks that ultimately enhance the security and quality ofelectricity supply in the most effective manner and provide other users with communicationlinks for the effective operation of their non-technical systems.

ROUTINE ACTIVITIES� Planning, installation, termination and commissioning of new fiber, data, radio and copper pilot communication network links for new substations/other sites utilising Transmission & Regional Planning/Projects/Consultants and Communication Networks/Contractors to enable the commissioning of SCADA, Protection, Security, Telephone, IT and City systems by set deadlines.� Acquisition, installation and commissioning of customised dust proof equipment/termination panels, ruggedised carrier class DWDM and SDH access multiplexers, optical switches/routers/media converters, GPRS cellular radio modems, Voice over Internet Protocol (VOIP) adaptors and Etherpads/protocol converters at substations/other sites to enable the commissioning of SCADA, Protection, Security/Access Control, Telephone,

IT and City systems by set deadlines.� Location of all communication link and system equipment failures and restoration of critical user system services/operations within set time periods without backlogs

developing. Maintenance and repair of all communication links and system equipmentwithin set time periods without backlogs developing to ensure continuous reliable operationof critical user systems.

HIGHLIGHTS AND LOWLIGHTSOne of the highlights of the Branch is the response time to network faults. All technicalservices have been restored within an overall average of 3.72 hours from time of notificationof fault. This can be attributed to the successful recruitment of technical skills in criticalareas of the Branch and the up skilling of resources.

NEW AND EXCITING PROJECTS UNDERTAKEN� Installation, commissioning and testing of two 'demo' Tier 2 Wireless Distribution Area

Network wireless systems in preparation for the installation of a 'pilot' wireless networkin the New Germany area of supply

� Completion of the design and development of a Long Term Tier 2- Data Network Specificationfor medium voltage distributor substations.

� Testing and commissioning of ICAP Communication Equipment at 45 MV Substations and issue of Comms Clearances within two days of notification of readiness

� Installation and commissioning of six Dense Wave Division Multiplexers (DWDM) andseven Access Multiplexers at critical major substations

FUTURE PLANS� Acquire, install and commission a 'pilot' Tier 2 Wireless Distribution Area Network (DAN)

in the New Germany supply area for Smart Grid/Distribution Automation and SmartMetering.

� Upgrade the existing multiplexing core/backhaul communication network by installingand commissioning higher capacity, latest technology Access Multiplexers at strategictransmission substations in preparation for Smart Grid and Metering applications.

� Extend the existing Cellular Radio System to MV Mini Substations, RMPs and Auto-reclosers that are electrically controllable and can incorporate RTUs or appropriatemodems.

� Implement the new Strategy for Tier 2 Data Networking to extend the existing Tier 1 coredata network at HV major substations to the local data networks at MV distributorsubstations which will enable MV Automation.

ACHIEVEMENTS AND AWARDSThe Branch has been granted a license exemption by ICASA to construct, maintain andoperate a Private Electronic Communication Network within the eThekwini Municipalityregion.

ELECTRICAL WORKSHOPS BRANCHThis Branch was established to ensure that all equipment received from the manufacturersis tested prior to installation into the Electricity Network. It has been responsible for repairingequipment which has failed while in service. This Branch is also responsible for the supplyof mineral oils which are utilized as a cooling medium in the transformers and auto-reclosers.Over the years this Branch has evolved to undertake specialised intrusive maintenance onMV switchgear and transformers.

ROUTINE ACTIVITIES� Conduct acceptance testing on all new equipment purchased, ie. minisubstations,

transformers, ring main panels, auto-reclosers, sectionalisers and motors� Provide a breakdown and maintenance service on transformers, minisubstations, circuit

breakers, auto re-closers and sectionalisers either on site or in the workshop.� Oil processing, storage and issuing of regenerated transformer oil to MV/LV Operations

and HV Operations.� Reclamation of electrical equipment removed from site and the disposal of cables which

have been returned from site. These cables are cut into 1metre lengths to prevent beingutilized unlawfully.

16

HIGHLIGHTS AND LOWLIGHTSA new state of the art oil regeneration plant has been installed and commissioned at theelectrical workshops. This gives us better assurance of the quality of oil supplied to theoperations divisions. The plant has been automated for pumping regenerated oil to a tankfarm and storage facility thereby reducing the risk of human error.

A new test facility was installed for the testing of various electrical equipment. This facilityallows for the electronic capturing and data analysis of equipment tested within the testbay. The Electrical Workshop has achieved significant progress in the creation of an Electronicdata base system for equipment test results. This enables the Electrical Workshop toreduce the dependence on a manual paper filing system which results in the protection ofthe environment. The Electronic data system will also assist in analysing equipment historicaltrends once it has been commissioned.

NEW AND EXCITING PROJECTS UNDERTAKEN� Oil Regeneration Plant and automation pumping system� Electronic Test Facility and Data Base Storage

FUTURE PLANSTraining and developing of staff to perform highly advanced test procedures.

MECHANICAL WORKSHOPS BRANCHMechanical Workshops Branch provides specialist mechanical services within the Municipality.The Branch comprises of three Divisions, namely Work Programming Division, Fitting,Machining & Rigging Division and Welding Division. The Branch undertakes a wide rangeof repetitive fabrication, production and maintenance work; as well as a diverse range ofunique mechanical tasks to satisfy customer requirements.

ROUTINE ACTIVITIES� Costing, planning, design, research and purchasing of materials and equipment for works

orders received� Manufacturing of galvanised equipment, repairs to fibreglass ladders, maintenance and

fabrication of electrical equipment, installation of support structures, rigging servicersand safety inspections

� Repetitive production work, maintenance, manufacturing and repair of electricalinfrastructural equipment and component fabrication

� Maintaining of ISO 9001 accreditation by ensuring successful audits� Practical training of Mechanical Apprentices in line with SETA requirements

HIGHLIGHTS AND LOWLIGHTS� Mechanical Workshops prides itself in attaining and maintaining its ISO 9001 accreditation.� The Branch has a significant component of female gender representation at all levels as

its moves towards achieving the Employment Equity targets in the future.

NEW AND EXCITING PROJECTS UNDERTAKEN� Mechanical Workshops has worked on the improvement of layout ergonomics for easier

movement of materials. In conjunction with this project ageing machinery was replacedto improve productivity.

CHALLENGES FOR FORTHCOMING YEAR� The workshop will be undertaking an investigation into a computerised tool store inventory

system to improve the present system.� Base Line Risk Assessments will be undertaken to ensure safety at the workplace due

to safety concerns.

NETWORK DRAWING OFFICE AND SURVEY BRANCHThe Network Drawing Office and Survey Branch comprises of six divisions, namelyAdministration, Network Records, Geographic Information Systems (GIS), Special Projects,Utility Plans and Survey

ROUTINE ACTIVITIES� The Administration Division provides an administrative service to the Network Drawing

Office staff and provides a printing and scanning service, to the Electricity Unit and itscontractors and consultants.

� The Special Projects Division updates and maintains the Low Voltage Circuit Diagramdatabase and makes these diagrams available via a web browser. It also updates thecode of practice, drawings and illustrations, for the Technology Services Branch.

� The Survey Division is the only provider of survey services to the Electricity Unit andprovides detailed surveys of the Electricity Units low voltage, medium voltage and highvoltage electrical infrastructure, including elevation profiles of transmission towers,electrical equipment and architectural buildings in major substations. This Division alsodoes cable detection and provides surveyed layout plans of underground cables.

� The Network Records Division is responsible for the maintenance and update of theunderground and overhead electrical network, in the GIS. This electrical network informationis served out to the staff of the Electricity Unit via a web browser to inform the businessof the spatial location of its assets. The spatial location of the electrical assets in the GISis used primarily to locate existing assets in the field, for the maintenance of existingassets and for the future planning of the network.

� The GIS Division is responsible for the management, development and maintenance ofthe Geographic Information System. It provides GIS technical support to the NetworkDrawing Office and all staff that use GIS technology in the Unit. The Division investigatesuser requirements and provides technical solutions to enhance the visibility of the Unitsassets and provides in-house training in the use of developed applications and the webbrowser. Its core function to enhance current business processes to include GIS processesand to deliver electrical network data so that it can be used effectively by technical staff,decision makers, and non-GIS audiences.

17

This GIS information (professional maps, data, and workflows) is shared by means of highperforming GIS services that can be accessed via desktop computers and web browsers.

� The Utility Plans Division attends to all written correspondence with regards to way leavesand provides electrical network information to internal and external visitors, contractorsand consultants.

HIGHLIGHTS AND LOWLIGHTS� The Network Drawing Office and Survey Branch successfully created a Web Feature

Service (WFS) and Web Map Service (WMS) to enable the Ellipse 8 GIS Module to visualiseelectrical assets in its GIS interface.

� A pilot exercise to merge the existing GIS data and the data from the Asset ManagementField Data Capture Projects was conducted, to ensure that there will be electricalconnectivity in the GIS database, when the data from the Asset Management Project istransferred to the GIS database.

� An Arc Object Template Tool was developed to enhance the capability of standard toolsin the ArcGIS to create and maintain complex objects and to ensure that connectivity ismaintained. This tool will also support the creation of a unique key that will be requiredby other enterprise systems for integration to the GIS.

NEW AND EXCITING PROJECTS UNDERTAKENThe Survey Division has been assisting the Project Executive, Customer Services and MV/LVPlanning Divisions in the Electrification of Informal Settlements Project, by providing a detailedsurveyed layout of Informal Settlements and Transit Camps, to expedite the planning andelectrification of the network in these areas.

CHALLENGES FOR FORTHCOMING YEAR� To upgrade the ArcGIS desktop and Web Applications to version 10.1 and integrate the

technology with other enterprise systems.� To redesign the current data model to merge the existing GIS data with the data from

the Asset Management Field Capture Project and ensure electrical connectivity in thedata.

PROTECTION AND TEST BRANCHThis Branch is responsible for the forward planning, analysis, design, up-dating, testing,auditing, maintenance, repair and management of all protection and DC systems in theelectrical network. The B ranch compromises of four technical divisions viz. ProtectionEngineering, Test, Protection Maintenance and DC Systems. The Test Division alsoprovides fault location, testing and repair services to the Electricity Unit as a whole.

HIGHLIGHTS AND LOWLIGHTS� Great focus was placed on in-house training of new staff which has resulted in the

improvements have been noted in the competencies of new staff.

� The IEC61850 laboratory has been fully commissioned and is being used daily to simulatenetwork problems and find solutions to these problems. The laboratory is also used toresearch and learn new relay technologies.

� Great effort was placed in the recruitment of technical staff and some of these effortsyielded positive results in that new junior staff that were appointed. However, building thecompetency levels of new staff is a challenge as many of the required skills are acquiredonly through experience which inevitably takes time.

NEW AND EXCITING PROJECTS UNDERTAKEN� The Branch embarked on a battery bank replacement program at Major substations to

replaced aged and failure prone batteries to ensure a continuous and reliable DC supplyat the substations. MV Distributor substations with old 30 V battery chargers have beenmarked for urgent replacement by new higher rated 30 V Static Power chargers toensure the charger can adequately supply power to the newly installed communicationequipment.

� The IEC61850 lab was commissioned during the year and is currently being utilised fortasks such as training, research into new technologies, testing IED configurations,simulating fault scenarios and evaluating supplier IED's. The Lab will also provide aninvaluable tool in the continued research as well as implementation of SMART grids.

� The Branch also undertook protection relay upgrade projects at substations were protection issues were reported by the protection maintenance team.

CHALLENGESThe Recruiting of specialised technical staff remains a major challenge. Despite great effortsthe Branch struggled to find experienced personal and in most cases had to elect to appointnewly qualified staff and train them. The training and equipping of new staff with protectionskills and competencies while at the same time trying to retain existing skilled and experiencedtechnicians and engineers. Due to the length of time required for adequate protection skillsto be acquired, a high staff turnover rate has a detrimental impact on the Branch's output.

ACHIEVEMENTS AND AWARDSThe HV protection drawing audit was completed successfully by the Protection EngineeringDivision.

TECHNOLOGY SERVICES BRANCHOne of the functions of the Branch is to undertake research into cost effective ways ofdistributing electricity. This function can be divided into two, namely, the cost of goodspurchased and the costs associated with the installation, operation, maintenance anddisposal of the said goods. Over and above the issues relating to construction and maintenance,safety of staff and public is high on the agenda both during the selection of a particular typeof good and during its application.

18

Technology Services has as its primary goal the adjudication of all tenders for technicalequipment, material and services supplied to the Service Unit, and the creation andmaintenance of all technical Codes of Practice and instructions used by eThekwini Electricitystaff and contractors.

RECENT ACTIVITIESThe Branch has continued its active participation in NRS projects as well as participatingin SANS working group members from other municipalities, Eskom, mines and majorsuppliers, specifications and guidelines have been prepared to promote uniformrequirements for equipment and design methods for use in distribution systems.

HIGHLIGHTS AND LOWLIGHTS� Conducted Final Assessment Tests for amorphous type transformers in factory in China.

This has resulted in huge skills transfer between engineers in developing this low-losstransformer and the Unit's engineers.

� The Substation Code of Practice has been completed and will be distributed to all staffin the coming year.

� The contract for Light Emitting Diode (LED) streetlights has been awarded and these low loss streetlights have been installed at various sites within eThekwini Municipality

NEW AND EXCITING PROJECTS UNDERTAKEN� Technology Services Branch has researched, designed, procured and implemented low

loss distribution transformers as part of eThekwini Electricity's energy saving strategy. This involved investigating the technologies used to manufacture transformer corematerials that aimed to significantly reduce the amount of technical (no-load) losses thatwould result in economic and environmental benefits as well as energy savings. This willresult in the department saving 794,804 kWh of energy every year.

� The Branch researched, designed, procured and implemented an oil regeneration andpurification plant. This investment would save R 480 000 a year for a R2,3 millioninvestment yielding a 4.4 year payback period. The plant is capable of regenerating about5 000 litres of oil per process depending on its initial quality and can purify up to 5 000litres per hour. Used oil is brought in from transformers and electrical switchgear indrums and pumped into storage tanks. It then goes through the regeneration first andthen purification process and is thereafter stored in clean oil tanks ready to be reusedin the field.

� To further improve safety of staff that performs switching on the medium and high voltagenetwork, the branch researched, designed and procured arc rated and flame retardantsuits. The use of these suits would prevent serious injury to staff in the event thatswitchgear fails during an operation.

SHERQ & TRAINING BRANCHThe SHERQ and Training Branch is responsible for the design, implementation and monitoringof systems to ensure compliance with the Occupational Health and Safety Act and associatedRegulations throughout the Electricity Unit.

ROUTINE ACTIVITIES� This includes conducting risk assessments, conducting safety audits, conducting

environmental audits, provision of safety standby personnel, operational training/competency accreditation of all persons engaged in construction and maintenance, andinvestigation into machinery-related incidents and the introduction of measures to preventrecurrences.

� The Branch assists all line managers within the Electricity Unit to comply with internalCodes of Practices, Construction Regulations, Accident investigation procedure and GMR2.1's responsibilities.

� Safety Officers conduct on-job observations to assist line managers operate and createa safe and healthy work environment with fewer accidents.

� System Operations Training Officers and ICT Trainers ensures that the staff across theunit is competent, committed and suitably qualified to operate and maintain the electricalassets on the network.

� Systems Operations Training provides artisans with knowledge to operate electricalequipment safely, thus eliminating damage to equipment, injury to staff or fatalities.

� Technical Training ensures the transfer of critical technical skills to staff ensuring anacceptable level of quality with regards to workmanship. Training is conducted to ensurethe work is performed in accordance with specifications and codes of practices as laidout by equipment manufacturers and the Electricity Unit. The Branch produces, trainsand develops Electricians, Technicians and Engineers for the unit.

� ICT Training equips eThekwini Electricity staff and contractors on the units IT systems.

HIGHLIGHTS AND LOWLIGHTS� The Training Centre has been re-accreditation of by LGSETA for the assessment of

Electricians.� The Branch successfully published the eThekwini Electricity Health and Safety Plan.� In order to promote Safety among Contracts that form an integral part of the workforce,

the Branch has implemented a safety Demerit System to address safety violations byContractors.

� Staff from the Branch are active participants at the National Core Working Group forElectrician Qualification, and the National Core Working Group for Switching Authorisationwhich are responsible for compiling the curriculum and implement training programs forNational Occupational Qualification.

CHALLENGESOne of the biggest challenges for the Branch is the recruitment of suitably qualified TechnicalTraining Officers

ACHIEVEMENTS AND AWARDSThe accreditation of the training centre for apprenticeships.

19

Customer and RetailServices Department

The Customer & Retail Services Department provides a customer contact and retail services function for the

Electricity Unit.

The Customer & Retail Services Department consists of more than 400 employees and performs a diverse range

of functions for the Electricity Unit.

Customer contact and retail

services

Executive Secretary

DEPUTY HEAD:CUSTOMER ANDRETAIL SERVICES

Senior Manager:Revenue

Protection

Senior Manager:Meter

Engineering

Manager:Contact Centre

Senior Manager:Pricing &Marketing

Manager:CuatomerServices

20

25

Business& General

20

15

10

5

0Residential Industrial Free Basic

Electricity

2011/2012

2012/201320.8

5

20.8

5

12.0

0

12.0

0

9.50

9.80

18.5

0

5.41

PRICING AND MARKETING BRANCHThe electricity Pricing & Marketing Branch has several primary functions namely:� To raise awareness about key issues involving electricity� To provide a technical and admin service to our key customers� To design cost-effective and accurate electricity tariffs� To maintain a statistical database for electricity purchases and sales and other important

information

Energy conservation and management have become key concerns in the industry due tothe repercussions of the recent energy crisis. Technical and non-technical loss managementstill remains one of the top agenda's for the Branch.

PRICING DIVISIONThe Division designs electricity tariffs and provides tariff advice to key customers. Tariffsare designed to be cost-effective whilst ensuring accurate cost recovery and reflectivity.The overall average tariff increase as approved by NERSA for 12/13 financial year was8% however individual customer categories were increased as follows:

Tariff design is proving to be a major challenge in the midst of the huge increases fromESKOM and we are finding it more difficult to design cost reflective tariffs that are affordableto the end customer. Major emphasis has been placed on protecting the poor to ensurethat they are not adversely affected by the huge increases. The tariff increases have beencalculated in line with NERSA's guideline methodology.

Table below compares the Average Percentage Increase of the electricity tariff in 2012/13for several Municipalities.

City Average Percentage Increase

Cape Town 11 %

Ekurhuleni 11 %

eThekwini 11 %

Johannesburg 14 %

Tswane 12 %

HIGHLIGHTS AND LOWLIGHTS� Two much needed technical staff members joined the Pricing Division� Pricing was able to prevent the introduction of IBT tariffs. In eThekwini the implementation

of IBT would negatively impact poor and low income Households where more than onefamily lives on a property.

� The Pricing Division was capable of charging Free Basic Electricity at NERSA's recommendedguidelines.

� A no cost charge for 20 A prepayment meters were designed and implemented at theend of the financial year.

FUTURE PLANS� Lack of knowledge about FBE is of great concern in the department and new key strategies

will be implemented to try increasing our FBE customer band for the 2013/14 financialyear.

� The initiative for electrification of informal and rural settlements tariff was approved andwill be available in 2013/14 financial year

� The Eskom maximum demand rules were introduced with the intention of finalisation inthe next financial.

� Due to the drive for “Green” Electricity the need is arising for the Division to implementEmbedded Generation tariffs for residential customers.

MARKETING DIVISIONThe Marketing Division is continuously holding interactive events to raise awareness andpromote the ideals of the Department. Knowledge of reducing energy consumption throughbehavior and technology is being promoted by the marketing staff and starts at primaryand secondary school levels.

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The activities of the Marketing Division create a platform to engage with the public to addressthe following:� Energy efficiency and demand side management (DSM)� Service delivery problems and constraints� Theft of electricity and infrastructure� Free Basic Electricity� Electrical safety and electricity hazards

EThekwini Electricity has brought joy to many families after achieving their first phase goalsof electrifying rural and informal households. The total informal households connected tothe network reached 2 439 houses

The table below indicates electrification projects completed in 2012/13:

Ward No. Name of Settlement Households Project Statusconnected tothe network

69 Chartsworth Bay View (Emanyaleni) 204 houses Completed

25 Panther's Hill 150 houses Completed

91 Zamani (Epanikeni) 150 houses Completed

23 Banana City 396 houses Completed

23 Permary Ridge 150 houses Completed

16 Nazareth Extension 84 houses Completed

83 Zakheleni Area (Umalzi betweenComtech and Mangosuthu ) 385 houses Completed

60 Ivy Close / Verulam 120 houses Completed

19 Zamokuhle / Wyebank 50 houses Completed

91 Epanikeni (Mpumalanga area) 150 houses Completed

45 Ntuzuma B 350 houses Completed

91 Harmasdale Town 100 houses Completed

The Marketing Division has also been working closely with communities and the internalplanning staff to try and asses the feasibility of electrifying areas that are without electricity.There are numerous challenges to overcome before all citizens are electrified however theBranch is committed to make this a reality in the coming years.

REVENUE PROTECTION BRANCHRevenue Protection Strategy is a systematic, on-going process, and not a once-off operation,whereby utilities need to proactively identify and target consumers that actively contributeto revenue losses, and to take the necessary action in order to minimise these losses. Thepillars of successful revenue protection are People, Processes and Technology, which needsto be integrated into a Revenue Protection Strategy.

HIGHLIGHTS AND LOWLIGHTSThe following projects and technologies have been implemented by eThekwini Municipalityto enhance Revenue Protection.� Installation of Prepayment Meters (Split)� Meter Management and Operation System� Use of Digital Pen & Paper Technology� Use of Protective Structures for meters and equipment� Audit of Business Customers.

These projects contributed to the success of eThekwini Electricity's efforts in keeping totallosses to below 6%, which is well below the national and international benchmarks.

INSTALLATION OF PREPAYMENT METERSThe installation of a prepayment metering system and the principle of debt collection via aprepaid meter played a crucial role in affording the poorest of the poor access to basicservices, in the process partly alleviating the problem of non-payment of services. It is criticalthat one devises strategies that are complementing each other to ensure sustainability.Encourage these customers to install prepayment meters due to the following advantages:� Can budget for the cost of the usage of electricity;� Can purchase electricity for as little as R5; there are no shocking bills at the end of the

month; you use only what you can afford, and pay for it in advance; your meter indicateswhich appliances use a lot of electricity; your meter indicates the credit you have left inyour meter;

� When your electricity runs out, your meter switches off automatically. Thus, you will notincur any debt by using electricity for which you have no money for, as with the creditmeters.

� Also there will not be any reconnection fees, penalties and interest charges, as there willnot be any arrears; etc.

SPLIT PREPAYMENT METERS THAT USES POWER LINE CARRIER (PLC) TECHNOLOGYThe split prepayment meter that uses power line carrier (PLC) technology is the electricityprepayment system that totally eliminates the need to install a dedicated communicationscable. Instead, communication between the externally fitted Remote Energy Dispenser (RED)and internally installed Customer Interface Units (CIU) is achieved via existing mains cables.

This means that when you need to retrofit conventional meters that were installed usingcables without a dedicated communications cable, there is no need to retrofit house servicemains with communications cable.

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The ability to use standard household wiring makes this an extremely attractive and cost-effective technology ideally suited to the retrofitting or replacement of conventional meters.We decided to install split prepayment meter that uses power line carrier (PLC) technologyin some areas.

REMOTE ACCESS SOLUTION - BENEFITSIn addition to the benefits of split prepayment metering, it offers two way communications,improved revenue protection and fraud detection of the prepayment meters with benefitssuch as:� Fraud notifications (e.g. tamper condition)� Auditing the prepayment meter remotely� Interrogate individual meter registers� Graphical display of consumption patterns� Power failure notifications from the mini-sub� Check metering to determine non-technical losses� Reports on low consumption� Two way communication with the prepayment meter - send maintenance tokens to the

meter

THE REMOTE ACCESS TERMINAL (RAT)� The RAT is a three phase PLC Data concentrator� Is able to monitor the PLC meter communications between the meter and its Customer

Interface Unit� Real Time Clock (RTC) functionality

- For date and time stamped (Meter and RAT) events- For storage of 30 minute profile date- Implementing scheduled actions (such as data upload)

� Configured events are uploaded as they occur� Meter data is uploaded according to time table� Enables two-way communications with some manufacturers PLC2 prepayment meters

METER MANAGEMENT AND OPERATION SYSTEMEThekwini Electricity invested in a structured Revenue Protection department, with threeregional offices and field teams, reporting to each office. They are focusing on reducinglosses over the entire meter-installation base, but the inherited challenges faced with thepre-payment system made it difficult to get “ahead of the game”. The following were requiredto address this challenge:� One Central Master System that reconciled all records� A structured field audit with the aim of normalizing all pre-payment and as well as residential

credit meter records� An integrated Work Order system to manage all follow-up field operations and record

updates� Data Reporting and Data mining to plan and execute a pro-active Revenue Protection

program

With more than 319 000 prepayment meters under our management, field operationsand data management could quickly become a daunting task. A high level of data validationand seamless system integration would be required.

The field operations consisted of two separate, but integrated actions. The first action wasthe physical meter audits. The primary aim of the audit was to update the meter recordsand to identify each meter position with an accurate GPS coordinate. The audit teams wouldfirst finish the work in a small designated area before the second action was initiated. Thisfollow up action was to address all required remedial field work identified by the initial audit.These operations were executed by a separate specialised normalization team. Theadvantages of this approach included:� The audit team could focus on the data acquisition and their productivity was optimized.� There is a negative impact with limited access when tamper disconnections are started. By first completing the audit sweep the access rate was much higher.� Fraud was limited since there was no imputes to bribe the audit team not to report

anomalies. The audit team had no direct contact with the normalization team.� The normalization team's skill set was selected towards the remedial tasks to be performed.

An electrician's time was not wasted by being held back by the overhead of a full dataaudit.

We embarked on a program to normalize our prepayment data set and in parallel launcheda paperless works order system to follow up on all remedial tasks identified through thisproject. We are now in the position to run an intelligent revenue protection program basedon back office analysis and targeted inspections. The positive results are already evidentand the future returns should be even greater. The success of the operation can be measureby having the correct building blocks in place comprising:� People - A project can only be effective with committed and dedicated resources� Processes - The correct processes and procedures established at the start of the project

are essential� Technology - This is the last element, but it is only effective once the first two pillars are in place. Investing in technology on its own will not ensure success.

PROTECTIVE STRUCTURESIn some instances Meter Room doors (Steel) are vandalised. As a result, customers werecontinuously tampering with electricity meters and illegally or dangerously connecting cablesonto our electricity supply network.

In areas where vandalism is rife we decided to install Vandal Proof Meter Room Doors orProtective Structures with an electronic locking system. These Structures are designedwith external hinges and an internal locking system. The design is such that with the hingesremoved the door cannot be opened

� Asset Protection to ensure minimal energy losses (non-technical)� To prevent unauthorized access and damage.� Enclosure has a high security features.� It can be monitored and controlled remotely.

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SECURITY: ELECTRONICS� Communication via GPRS to control� Separate locking system for LV and MV doors� All entries are logged� Monitor alarms remotely� RFID key tags for restricted access which is monitored� Optional (Only 1):

- Heat sensors to detect a cutting torch- A daylight sensor - indicate any access- Vibration sensor to detect drilling

DIGITAL PEN & PAPER TECHNOLOGYDue to the increase in electricity tariffs over the past few years and the fact that eThekwiniMunicipality uses the concept of consolidating accounts, we have seen more and more ofeThekwini Municipality`s customers struggling to pay for their consolidated accountstimeously. As a result, over the past few years we have seen a steady increase in the numberof arrears disconnections.

It is therefore very important to effectively and efficiently disconnect customers that arein arrears to tighten our Credit Control Policy. EThekwini Electricity uses an advanced form-processing solution using highly evolved Digital-Pen-and-Paper Technology to effectively &efficiently manage the disconnections. This technology helps us to track the activities ofdisconnectors, i.e. auditing work carried out by contract disconnectors and to transfer thedata from the field to the office instantaneously.� We are able to audit contractors to ensure compliance - The Form Viewing / Editing

System: GPS Mapping System - Reporting and monitoring of field staff.� Monitor Contractors and/or staff performance- The Form Viewing / Editing System:

Filtering and Search Tools.� Payments of contractor`s Invoices - Reports.� Simple Technology - Pen and Mobile Phone.� Real Time Reporting and Real Time Monitoring of electricity disconnections.� Ability to attach photographs which can be uploaded to the system.� Digital Document Archival.

AUDIT OF BUSINESS CUSTOMERS (CT DRIVEN INSTALLATIONS)The annual financial losses to energy suppliers caused by connection errors in meterinstallations are not to be neglected. There are many possibilities in making incorrectconnections during installation. In many cases, installation faults are rarely discovered atthe time of billing and, sometimes, not recognised for many years. This results in considerablelosses to energy suppliers.

In the energy market the meaning of correct energy billing becomes even more important,especially because more parties are involved in this process.

It is imperative that utilities provide the necessary training to the Revenue Protection andMeter Engineering staff, set out procedures for the re-commissioning and verification ofmeasurement and metering equipment and to provide the standard tools and test equipmentrequired by technicians to perform their tasks to ensure that the required safety and/orquality standards are practiced.

The policy that defines the criteria regarding planned maintenance on electricity meteringand measurement equipment needs to be adopted to ensure that utilities comply withNRS 057 and the Electricity Metering Code of Practice.

The Revenue Protection branch conducts annual audits to verify measurement andmetering equipment and analyses circuit faults found during the verification.

STRATEGYThe strategy adopted is to ensure that the Revenue Protection & Meter EngineeringBranches work hand-in-hand and have the resources, equipment, skills and ability, to carryout re-commissioning and verification of measurement and metering equipment and tomaintain a high level of equipment security by sealing the metering equipment with appropriateseals in accordance with the Code of Practice of eThekwini Electricity on the sealing ofmetering equipment.

CIRCUIT FAULT IN METER INSTALLATIONSThe “Circuit faults “ means that there is a fault that affects the correct functioning of themeters, but does not affect the supply to the customer (i.e. wrong connections, open circuits& short circuits). For this project, the audit inspectors go beyond just identifying “Circuitfaults” but they also identify any tampering that might have taken place on the meteringand measuring equipment and they also do an office audit on each installation`s documentationto verify the following :

� Correct meter number captured.� Correct CT ratio programmed on meter.� All CT currents are present.� Correct VT ratio programmed on meter.� All voltage phases present.� Correct tariff used.� Condition of meter panel.

A shortage of resources remains a challenge in the industry but despite these challenges,correct meter reading is vital for utilities to avoid a loss in revenue. EThekwini Electricityuses experienced and qualified staff or consultants to perform all the necessary auditinspections to ensure that meter errors do not go undetected.

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METER ENGINEERING BRANCHThe core responsibility of the Meter Engineering Branch is to ensure all metering equipmentused for billing purposes are appropriately specified, tested, installed and maintained. Toensure these objectives are undertaken efficiently, the Branch is sub divided into fourspecialized Divisions. These Divisions are Advanced Metering & Projects, Metering Workshop,Whole Current Metering (Construction and Maintenance), and the Bulk Metering Division.

ADVANCED METERING AND PROJECTS DIVISIONThis Division is fundamentally accountable for the acquisition, specification and commissioningof new metering technologies. During the past year, this Division has been involved in theimprovement of automated meter reading systems communication equipment, reducingthe total number of manual reads to 1.04%. These systems make use of cellular wirelesstechnology via GSM for the remote acquisition of metering data back to the master stationsfor billing purposes. Updated GPRS/RF wireless technologies are currently being investigatedas possible alternative means of wireless communication. These later technologies canpositively add to the Division as it is a more cost effective and reliable alternative for futureapplication. The most recent technology update currently being added to the system is theremote metering failure notification system which is programmed into the meter to notifythe Division’s staff of any metering failures via SMS.

Another important project currently being undertaken by the Division is the implementationof smart metering for both residential and industrial use. The most recent advancementto this has been the appointment of Smart Metering Management Consultants. This teamof experienced professionals will work closely with the municipality management and lookinto the various solutions of integrating the concept seamlessly into the municipality'sstructure. The Division is also continuously working with ESKOM on multiple load controlprojects to ensure a healthy national grid during times of high demand. The Advancedmetering Division also has been given the sole responsibility of programming all electronicmeters for every tariff application.

THE BULK METERING DIVISIONThe Bulk Metering Division is responsible for all new applications and upgrades for themetering of large power users. This involves complex meter installations and maintenance.The division is directly responsible for the generation of metering data and maintenanceof nearly a 1 000 of our largest customers which makes up around 50% of the total revenuegenerated by the electricity department. In addition, the Division undertakes planning;forecasting and more importantly execution of load profile requests for tariff analysispurposes for our business customers who would like to migrate to more favorable tariffs.

The Division is also responsible for the migration of summation systems to the multi-feedersystems, thereby improving accuracy of metering and ensuring precise revenue collectionis being continued. The Division is also responsible for the scheduled meter replacementsand changes. This includes replacing all electromechanical and outdated electronic bulkmeters with the later version electronic bulk meters.

THE WHOLE CURRENT METERING DIVISIONThe Whole Current Metering Division is further divided into maintenance and constructionin order to optimize turnaround time due to a significantly larger consumer base. ThisDivision is fundamentally responsible for all new metering applications, upgrades, reinstates,credit to pre-paid changeover of small businesses, commercial and sectional title residentialcustomers. Rectification of onsite faults and queries on all complex metering installationsalso forms a significant part of the Division's responsibilities

THE WORKSHOP DIVISIONThe principal function of this division is to test, repair and calibrate all single phase andthree phase electro-mechanical meters. The Division is also required to carry out testingand servicing of pre-payment, three phase and single phase electronic meters. Further tothe above duties the Division provides critical support for equipment quality assurance bysample testing 10% of all new meters purchased.

This Division has an approximate average throughput of 400 single phase, 200 three phaseand 1300 prepayment meters per month and is striving to meet the growing and changingmarket demands and to minimize capital expenditure. The workshop is housed in largepremises and geared to cope with high volumes of meter tests and calibrations. There willbe significant upgrades in the near future with the possible acquisition and installation ofnew and advanced meter testing equipment. Quality systems are constantly being enhancedto improve and maintain highest levels of efficiency and accuracy.

CHALLENGES� The filling in of technical posts continues to be a hurdle for the current year and the year

to come.� A restructure of the Meter Engineering Branch will be considered and priority will given

to motivation and training of staff.

FUTURE PLANS� The focus for the forthcoming year will be the investigation into new technologies such

as smart metering for residential customers and a new multi-vendor advance meterreading (AMR) system and specifications for a new single phase and three phases TestBench. The AMR investigation will enable the remote reading, disconnections andreconnections of meters for residential customers and allow multiple meter vendors.

� Smart metering will also enable the limitation of customers' loads which can be used tomitigate unwanted future load shedding procedures.

CUSTOMER SERVICES BRANCHThis branch is responsible for the processing of all applications for supply, registration ofcustomers for billing purposes, meter reading services, auditing of meter readings, resolvingaccount queries/disputes, technical advisory service and the cashiering facilities at variouselectricity customer services shops.

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HIGHLIGHTS AND LOWLIGHTSRMS (Revenue Management System)The “RMS System” is still being finalised and senior Customer Services administration staffmembers are still assisting with the finalisation to ensure that all Electricity's concerns areaddressed. There have been delays in the transition between Coins and RMS project. Dueto the delays, temporary staff members are being employed in permanent positions in otherdepartments and new staff has to be trained.

NEW APPLICATIONSThe ongoing provision of “RDP” Housing has seen our administration staff efficientlyprocessing applications to ensure the timeous “switch on” of electricity for these houses.This is only possible with the close co-operation between the Housing Department, CustomerServices, Finance Department and the Depots and will be ongoing in this new financial yearwith new improved methods of communicating with Housing.

METER READINGA new pilot project has been initiated for meter reading. This pilot project will investigatethe market for new meter reading hand-held units due to the current high costs ofmaintenance and replacement of the present units. A local manufacturer is being sourced.

IMPROVING SECURITYIn view of the high crime rate, Customer Services Centres are always improving securityfor both their staff and customers. The Rotunda Customer Services Centre at HQ has beenburgled three times in the last financial year. It will now have burglar guards installed onthe outside and the parking lot will be improved with new boom security and guards in thenew financial year.

NEW AND EXCITING TECHNOLOGIES AND PROJECTSAccommodationNew premises are needed for the Northern and South Western Region. Northern arecurrently occupying Mallacca Road depot and have been given notice to relocate.Besters Customers Services Centre is investigating the addition of a second floor to theirbuilding to accommodate all North Western staff, which is in-progress with the Architecturaldepartment. A new Northern Customer Services Centre has been secured at Gateway.

SMS TECHNOLOGYThis is currently being investigated to capture meter readings by consumers via cell phones

WEB PAGE DESIGNThis is being investigated to capture on-line applications, account queries, meter readingcapture, token purchases and compliance information to be displayed.

ROTUNDA DISPLAYSThese large screens will be placed at entrance of Rotunda displaying all necessary informationto consumers regarding applications, queries and tariffs. Once this system is optimized, itwill be installed in all Customer Service Centers.

QUEUING SYSTEM AND CUSTOMER FLOW MANAGEMENT SYSTEMThere is a definite need for this system to be installed in all customer service areas. Currentlywe are investigating the local market, such as systems at SARS.

CONTACT CENTRE BRANCHThe Contact Centre provides a fault reporting service on a 24-hour, seven-days-a weekbasis. The Contact Centre is equipped to log faults and forward to the relevant Branchesfor corrective action to be implemented. The Contact Centre deals with all consumercategories, reporting a wide range of faults. Typical faults include:

� Loss of electricity supply� Metering faults� Street light failure� Poor quality of supply� Cable theft

CHALLENGESIllegal connections and cable theft make at least 30 % of the calls that we take per month.Electricity's bylaws are currently being amended to assist with the prosecution process sothat those that are guilty of illegal connection and cable theft get a reasonable punishment.

ACHIEVEMENTS AND AWARDSWe opened sms line where consumers can send us their meter readings as well as allother queries that they might have. We have reduced number of voice calls by at least1 500 per month.

FUTURE PLANSWe have proposed a fully multi media contact centre solution that will not only enable usto deal with voice calls but with all the latest media functions, including Facebook, Twitter,WhatsApp, Mxit as well as faxes. We plan to have staff managing this system 24/7 toallow us to respond to our customer queries in real time for all types of media communication.

CONTACT DETAILSsToll-Free number : 080 131 3111E-mail : custocare@elec.durban.gov.zaSMS : 083 700 0819Cable Theft Hotline : 031 311 9611

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CommercialDepartment

The Commercial Departments of Finance, Information Communication Technology, Productivity and Business Process

Engineering, Supply Chain Management, Business Risk, Administration and Transport play a vital support role to eThekwini

Electricity. They also participate in numerous other Council projects/committees. Within the staffing constraints currently

experienced they strive to provide effective logistical support to the technical operations. A key feature of these departments

is to ensure that throughout, legislative practices, controls, policies and procedures are complied with.

In addition to the onerous Local Government Legislative and governance controls we also have to comply with, the National

Electricity Regulators (NERSA) has stringent requirements pertaining to reporting as a ring-fenced Business Unit. NERSA’s

Framework for Economic Regulation is complex and is presenting significant compliance challenges going forward.

Ensures that legislative

practices, controls,

policies and procedures

are adhered to

Executive Secretary

DEPUTY HEAD:COMMERCIAL

Senior Manager:Finance

Manager:Electricity

Procurement

Manager:Business Risk

Control

Manager:Administration& Transport

Senior Manager:Information &

CommunicationTechnology

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ADMINISTRATION BRANCHThe Administration Branch covers three key areas of the Department: Administration,Buildings, and Transport.

The Administration Branch is responsible for providing an efficient and effective DocumentManagement System, and operates within the parameters of an approved GovernmentalArchival System. With the increased use of electronic media, meeting the requirementsof the Archival Act, is a major challenge. The exploration of an Electronic DocumentManagement System is currently being undertaken.

Administrates the PABX and Telephone Management System providing various telephonereports to Senior Personnel for the purposes of monitoring telephone usage, customerliaison, document (correspondence) referencing, word processing of letters, reports, contractdocuments and transcribing of meetings, disciplines/enquiries etc. and the processing ofdocuments for micro-filming of electricity application forms.

FLEET DIVISIONThe Fleet Division is responsible for the acquisitions, maintenance, and disposal of vehicles.The Current Fleet size is 1 359, made up of Cranes, Aerial Platforms, Various Trucks,Bakkies, Cars, Generators, Trailers and Compressors. Majority of the fleet, are speciallymodified to suit the work activities undertaken by staff. The major challenges experienced,are the changes in legislation, and the period of time required to complete modificationsprior to a vehicle/plant being operational. By improving vehicle design and the standardisationof modifications of common categories, the time taken to modify a vehicle has been largelyreduced.

BUILDING MAINTENANCE DIVISIONThe Building Maintenance Division is responsible for general building maintenance, security,and the upkeep of the gardens/grounds at the Electricity Springfield Complex, NetworkControl Complex, Training Centre and HQ Complexes.

Due to the rapid expansion of new recruits, the provision of office accommodation andparking areas is a major challenge. Various interventions are being implemented viaacquisition of buildings, restructuring of existing office space, leasing of office space, anderection of new buildings.

INFORMATION TECHNOLOGY BRANCHThe 2012/13 year has been another busy and challenging year for the I.C.T department.The number of new initiatives, including Smart Metering, and the current upgrade ofeThekwini Electricity's enterprise asset management system, which is a strategic projectand its success paramount, has kept al l resources in ICT ful ly uti l ised.

Key internal focus areas for the department in this period however, was to continue tocapacitate the department with new resources and skills, and improve on our processesand procedures. There has been good progress in the recruitment plan in that a numberof Support Officer and System Administrator posts have been filled whilst numerous keyposts in ICT are in an advanced stage of recruitment.

The non-appointments in the outstanding posts can largely be attributed to unavailabilityof suitably qualified and experienced applicants, resulting in the re-advertising of these postsrepeatedly.

FACILITIES DIVISIONAs our Information Systems are being implemented and updated on an ongoing basis, theinfrastructure on which these systems rely, require constant upgrade or completemetamorphosis in alignment with best practices and the COBIT framework for good ICTgovernance. The imminent upgrade of eThekwini Electricity's Enterprise Asset ManagementSystem (Ellipse) at eThekwini Electricity, with its new system architecture, required significantinvestment in new hardware and software.

CHALLENGESElectricity recognized the need for a clear ICT Strategy and comprehensive SystemsArchitecture, and was to engage a service provider that specialized in the facilitation anddevelopment of Enterprise ICT Strategies, this unfortunately, was not achieved and resultedin difficulties in the forward planning for ICT.

The Facilities Division still suffers from human resource constraints however, the DataCentre Operations Manager post has essentially been filled, as we are awaiting finalauthorisation for the appointment of an incumbent. It will be a key focus and deliverablefor the Data Centre Operations Manager to expedite the filling of the vacant posts in thisBranch.

Continued improvements in the governance of ICT at Electricity have been achieved withongoing improvements being made in Change Control Processes and the monitoring andmanagement of system changes. The implementation of Sentinel has resulted in compliancewith the Auditor Generals recommendations from the previous year. In accordance withthe Auditor Generals Recommendations, ICT embarked on the development of a temporaryDisaster Recovery Site at Springfield Depot in 2012 but has unfortunately not received thenecessary approval of the Tender Specification for this. This project is also necessary toaddress the ongoing power related issues at Springfield Depot that have been responsiblefor regular downtime and service disruption. The new DR site was to eliminate the needfor the previously “out-sourced” hosted DR from HP, which was expensive. As a temporarymeasure, a reduced DR was achieved at the Corporate IS DR site in Scott Rd. This remainsa concern and a comprehensive DR Plan is in the planning process for hosting in the newlybuilt site in Westville.

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DEVELOPMENT DIVISIONThe Development Division in ICT has had another very productive year with key projectssuch as the Ellipse upgrade, Meter Management Improvement Project, RMS and thePrepayment system requiring significant effort. In addition to the numerous projects thedevelopment team are involved in, ad-hoc requests for system enhancements, reports andnew systems integration have been ongoing.

Whilst systems development has largely been done by external contractors, the appointmentof a permanent Systems Developer has enabled ICT to replace the legacy Productivity/BonusIncentive Scheme with an in-house developed system.

SUPPORTExcellent progress made in the recruitment of ICT Support Officer's in 2011/12 hasresulted in continued improvements in the quality of service to the end user. Unfortunatelywe have seen a number of resignations in the Support division.The continued use of utilitiessuch as Zen Works Remote Control and the standardization of the Desktop client has alsocontinued to improve the end user service levels, by reducing the resolution time for mostcategories of support incidents.

The filling of the three vacant ICT Service Desk Operator posts this year has had a positiveeffect on the ICT Departments image and customer service satisfaction. Unfortunately wehave seen the resignation of one of the ICT Helpdesk Staff.

PROJECT OFFICEAs the hub of ICT, the Project Office has had another incredibly busy year in Project Managingnew and existing projects. The increase in the use of Vibe as a collaboration Tool and ProjectManagement & Document Management Tool by the business, has kept the Project OfficeResources busy with End User Training of Vibe and the ongoing administration of the VibeSystem and Workspaces. New workflows for Change Control and IDM have been implementedand further workflows for various ICT Processes have been initiated. The project Office hasalso been moved to new premises at Springfield Depot as ICT has outgrown the currentoffices at HQ.

The upgrade of the current Ellipse Enterprise Asset Management System (EAM) to thelatest version Ellipse 8 is nearing conclusion. Delays in the data conversion, as a result ofthe Vendor Conversion Utilities experiencing problems, have resulted in a new Ellipse 8 GoLive estimated for March / April 2014. Ellipse 8 is essentially a completely re-written systembased on a more modern technology stack and as such has provided a number of challenges.

NETWORKICT has made significant improvements in the data networks at Electricity. The upgrade ofall edge switches and core switches is complete. This has improved the management,availability, security and performance of the network and supports future businessrequirements such as Virtual Conferencing and Voice Over IP.

The introduction of both Vodacom and MTN APN's (Access Point Name) as an enterpriseMobile Communications Medium has seen intense growth and now supports Mobile servicessuch as E-Mail and Remote Desktop Access for authorized users, as well as solutionscurrently envisaged for eThekwini Electricity as part of the Ellipse Mobility Module i.e.:Inspections and Defects, Dispatch and Asset Inventory Survey. As security risks haveincreased exponentially with mobile devices attaching to the network, ICT have installed andconfigured security appliances to monitor and manage any potential security threat.

PREPAYMENTEThekwini Electricity has approximately 339 000 prepaid customers, currently supportedby our on-line pre-payment vending system. Sales Revenue, of approximately R765 millionper annum, is generated from 120 Credit Dispensing Units throughout the eThekwiniElectricity area of supply. Most of these (CDU's) are installed at private vending Agents, thatsell tokens on our behalf, and a few are installed at Electricity Customer Service Centers.Since the introduction of our first Third Party “Super” Vendor, Cigicell (Pty) Ltd, eThekwiniElectricity has been able to increase the number of Points of Sale (POS) by almost 500.The increased footprint significantly improves the accessibility of the Prepayment VendingPoint of Sale and hence making it more convenient for our customer. Over and above theregular slip type vouchers that are available, eThekwini Electricity customers are now ableto recharge their Prepaid Electricity online, from the comfort of their own homes, by simplypaying with their debit/credit cards or EFT (Electronic funds transfer). Customers are alsoable to purchase electricity via the web, certain mobile applications or SMS and customersusing Mobile applications are now able to view electricity saving tips, statistics of theirconsumption and receive SMS alerts when their electricity level is low, at no additional cost.

In summary, ICT has had an incredibly busy and productive year, despite the severe lack ofinternal human resources.

FINANCE BRANCHThe Finance Branch is responsible for the financial control over all activities of the Department.This includes, inter alia, the management, monitoring and control of revenue, operatingexpenditure, capital expenditure, insurance claims, financial systems, procedures and theprovision of advice and guidance on matters related to finance to all personnel. TheDepartment's annual and medium term budgets, annual financial statements and monthlymanagement reports are prepared by the Finance Branch.

The Branch also monitors compliance with statutory and internal regulations.In addition, the annual financial statements for the 2012/13 year and the multiyear budgetsfor the 2013/2014 year onwards were prepared and approved within stipulated deadlines.

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During the year under review, the Finance Branch continued to contribute to several projectsin the Department, namely, the Outage Management System (OMS), the RevenueManagement System (RMS) and the Asset Management System (AMS). Phase two of theAMS implementation, which relates to MV/LV, is now at the advance stage and is expectedto be completed in the last quarter of the 2012/13 financial year.

Finance is also playing an active role in the implementation and rollout of Ellipse 8 systemimplementation which is expected to go live by the end of the 2013/14 financial year.

The Regulatory Reporting Manuals (RRM) project required by the National Energy Regulatorof South Africa (NERSA) is 90 % complete. Final review or adjustments are awaited fromthe Regulator, with the project expected to be finalised by October end 2013. With theaudit and successful completion of the 2012/13 Annual Financial Statements compilation,Management would like to recognise the dedication and enthusiasm displayed by the staff.

PROCUREMENT BRANCHThe Procurement Branch of Electricity provides a service for all Stock, Service Orders NonStock and Emergency Orders for the whole of Electricity and their depots. One of the Policieswhich are adopted by the Purchasing Department is ensuring that the strategy and valueDelivery are continually kept under Review in line with changes in Technology and SupplyMarkets. Springfield Complex Buying Office Provides a hand on Procurement Service to theMechanical workshop, Electric Workshops, Transmission Cables, Substation, Central Depotand the Transport Section. Purchases and Services are Unique and Specialized.The Challenge for the Forthcoming Year is keeping in line with the Pure Eco Environment,by recycling and re-use to initiate cost saving by viewing the total life cycle of products whichshould benefit cost plus have an environment friendly impact.

PURCHASE ORDER STATS FOR JULY 2012 TO JUNE 2013

Order Group Order Type No. of Orders

Contract Stock Purchase Orders 2131

Contract Service Purchase Orders 151

Contract Non Stock Purchase Orders 82

Non-Contract Stock Purchase Orders 1005

Non-Contract Service Purchase Orders 2737

Non-Contract Non Stock Purchase Orders 1689

BID ADMINISTRATIONThe Bid Administration Section administered 121 contracts for the supply of goods andservices of which 21 were labour contracts.

The theft of cable was a huge challenge in the last financial year. We installed decals onall the contractors' vehicles and changed their overalls to red to ensure that they wereeasily identifiable. Twelve apprentice electricians qualified as electricians. Thirteen appealswere received by the Appeals Committee and were successfully defended.

STORES DIVISIONStore's is a division within the Finance & Administration Department of Electricity serviceunit that forms part of the Materials/Buying division.

We operate 22 Stores located throughout the distribution area and stock 3 500 items.In addition to the warehousing and issuing of stock items, the Stores are responsible forreceiving of all direct (outside) purchases.

HIGHLIGHTS� Stock discrepancies have been reduced, in comparison with previous terms.� New methods and processes in terms of stock control has yielded lesser shrinkage and stock losses.� Recruitment of more women into the Stores environment has added energy and productivity

to the work ethic.� Scanning systems introduced at Meter Stores to capture individual meter details, for easier tracking of meters & providing more quality information to energy control.� The installation of new computers systems on each floor of Main warehouse stores. This

has improved service delivery and stock control, where storekeepers on each floor can review stock levels and perform random stock counts.

LOWLIGHTS� At the beginning of this review period i.e. July 2012, low staff morale, together with higher

than expected stock discrepancies were noted.

FUTURE PLANS� To improve on our Stock turn rates on previous years.� To improve on our customer services at, & service levels at Stores, on previous years.� To train & empower more staff members, in order to improve productivity & skills.� To acquire more reliable vehicles/equipment example, a new forklift for Stores, to improve

service delivery.

BUSINESS RISK BRANCHThe Business Risk Control Branch comprises of the Risk and Compliance Management,Investigations and Network Theft Division.

The Risk and Compliance Management Division is responsible for the identification,assessment and mitigation of risks within eThekwini Electricity.

30

Compliance to procedures and policies is assessed for different Departments within theUnit.

The Investigations Division is responsible for the investigation of incidents relating tomaladministration within the Unit whilst the Network Theft Section is responsible for theidentification, investigation and mitigation of infrastructure theft on eThekwini Electricity'sreticulation network.

Cable theft and theft from substations have spiraled out of control during the year. Specialoperations were planned in hot spot areas with the assistance of SAPS. Two syndicatescomprising of five members each were arrested during these tactical operations. Patrolsat substations also resulted in several arrests. Criminal cases tried at court have seenthieves getting sentences between 3 months and 3 years.

A new tender has been awarded which will ensure 250 distributor substations being installedwith pepper gas systems as an anti-theft device.

A series of risk workshops was conducted during the year where the Unit's strategic andoperational risks were identified and assessed. Together with the relevant stakeholders,risk mitigation strategies were designed. The workshop also led to the development of theUnit's risk register which is considered a fundamental tool in the effective management ofthe business. Regular monitoring of progress on the various tasks allocated to task ownershas been conducted and it is envisaged that completion of the various tasks would meettheir desired target dates and consequently support the mitigation strategies.

During the financial year 2012/13, several investigations into maladministration within theorganization were conducted resulting in civil and criminal proceedings being institutedagainst the alleged perpetrators and recoveries of the losses.

FUTURE PLANSIn the ensuing year, we hope to be one of the drivers in convincing law makers into adoptinga more serious approach to incidents of copper theft. Should this be successful, we envisagethat with the implementation of new/amended legislation, harsher sentences would bemeted out to perpetrators found guilty of copper theft. It is also our aim to conduct an earlyidentification process of the Unit's future potential risks with a view to alerting managementtimeously in order that that sufficient time is available for the development and implementationof mitigation strategies. We will support management in their drive to adopt a zero toleranceapproach to maladministration within the organization. Hence, we will continue to pursueinvestigations and recommend action we deem necessary and which we consider to be inthe best interests of the Electricity Unit.

31

Executive Secretary

Human ResourcesDepartment

The Human Resource Department is responsible for providing guidance and support to the employees of eThekwini

Electricity Unit. HR Staff are involved in addressing issues which impact Human Resource management for the Unit

as a whole, through coordination of policy issues and involvement in labor relations activities.

Providing guidance and

Human Resources

support

SENIOR MANAGER:HUMAN RESOURCES

Senior Officer:Recruitment &Administration

Manager:Human

ResourcesServices

Manager:Human

ResourcesAdministration

32

HUMAN RESOURCES SERVICES BRANCHThis Branch provides a service to the staff of the eThekwini Electricity Unit in the field ofTalent Management and Acquisition, Industrial Relations, Employee Welfare and PayAdministration.

The Pay Administration Branch which was previously centralised joined the Human Resourcesservices Branch in April 2013. This was welcomed by the Unit's staff as it provided faceto face communication with staff which enhanced the manner in which their queries weredealt with.

HIGHLIGHTS AND LOWLIGHTS� Talent Management and acquisition has been a priority for the Unit as this impact directly

on service delivery.� A successful Wellness Day was held at the various depots in April 2013.� In June 2013, for the first time the Unit held Men's Health Day that targeted health

issues that specifically affected men. The outcome of these wellness days will provide thebasis for which specific interventions will be targeted.

CHALLENGESWhile eThekwini Electricity had a fantastic recruitment drive this financial year, it still hasa huge technical skills shortage. As indicated in the graph below 2 255 posts out of apotential 3 777 has been filled.

FUTURE PLANSThe HR Business strategy going forward will be to improve the turnaround time forrecruitment and industrial relation matters. To ensure a healthy and productive workforceby targeting wellness and performance issues that is negatively affecting the staff.

335

Éngin

eer

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01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12 12/13

Maximum Demand (MVA)

% Growth

SYSTEM MAXIMUMDEMAND

Energy (GWh)

% Growth

ENERGY SALESPER ANNUM

% Growth

Energy (GWh)

% Growth

MaximumDemand

(MVA)

FINANCIAL YEAR

FINANCIAL YEAR

Graphs

33

600

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01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12 12/13

Number of Bulk Customers

Energy Sold (GWh)

GROWTH OFBULK CUSTOMERS

Average MWh/BulkCustomer/Month

Average Income(R)/Customer/Month

AVERAGE MWh PER BULKCUSTOMER/MONTH

Rand (R)

Energy (MWh)

Energy (GWh)

Number ofBulk Customers

5 400

5 200

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01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12 12/13

Number of B&G Customers

Energy Sold (GWh)

GROWTH OFBUSINESS AND GENERAL

CUSTOMERS

Average kWh/B&GCustomer/Month

Average Income(R)/B&G Customer/Month

AVERAGE kWh PERBUSINESS AND GENERAL

CUSTOMER/MONTH

Rand (R)

Energy (kWh)

Energy (GWh)

Number ofBusiness and

GeneralCustomers

50 000

45 000

40 000

35 000

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35

0 0

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01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12 12/13

Number of CreditResidential Customers

Energy Sold (GWh)

GROWTH OFCREDIT RESIDENTIAL

CUSTOMERS

Average kWh/CreditResidential Customer/Month

Average Income(R)/Credit ResidentialCustomer/Month

AVERAGE kWh PER CREDITRESIDENTIAL

CUSTOMER/MONTH

Rand (R)

Energy (kWh)

Energy (GWh)

Number ofCredit

ResidentialCustomers

330 000

325 000

320 000

315 000

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0 0

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01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12 12/13

Number of PrepaymentCustomers

Energy Sold (GWh)

GROWTH OFPREPAYMENTCUSTOMERS

Average kWh/CreditPrepayment Customer/Month

Average Income (R)PrepaymentCustomer/Month

AVERAGE kWh PERPREPAYMENT

CUSTOMER/MONTH

Rand (R)

Energy (kWh)

Energy (GWh)

Number ofPrepaymentCustomers

0 -

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FINANCIAL YEAR

FINANCIAL YEAR

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0 0

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01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12 12/13

Number of Customers

Energy Sold (GWh)

OVERALL GROWTHOF CUSTOMERS

Overall Average kWh PerCustomer/Month

Average Income(R)/Customer/Month

OVERALL AVERAGE kWh PERCUSTOMER/MONTH

Rand (R)

Energy (kWh)

Energy (GWh)

Number ofCustomers

0 2 000

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0

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01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12 12/13

Number of Employees

NUMBEROF EMPLOYEES

Energy Sold Per Employee(GWh)

ENERGY SOLDPER EMPLOYEE

Energy (GWh)

Number ofEmployees

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FINANCIAL YEAR

FINANCIAL YEAR

39

0

Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun

Qualifying Customers

Total Claims

FREE BASIC ELECTRICITYCLAIMS PER MONTH

Average FBEClaims Per Year

AVERAGE FREE BASICELECTRICITY CLAIMS PER

YEAR

Numberof Claims

Claims

Number ofCustomers

0 0

09/10 10/11 11/12 12/13

10 000

20 000

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20 000

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70 000

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100 000110 000

120 000

FINANCIAL YEAR

FINANCIAL YEAR

Qualifying Customers

Total Claims

FREE BASIC ELECTRICITYCLAIMS PER MONTH

40

Prepayment

8 %

Private Residences

25 %

Business & General

22 %

Bulk

44 %

DISTRIBUTION OF ENERGYSALES 2012/2013

Private Residences

29 %

Business & General

24 % Prepayment

8 %

Bulk

38 %

Other

1 %

DISTRIBUTION OF REVENUEFROM SALES 2012/2013

Other 1 %

41

Repairs & Maintenance

5 %

Employee related costs

8 %

Interest paid

2 %

Bulk Electricity Purchases

62 %

Admin & General

18 %

DISTRIBUTION OFEXPENDITURE 2012/2013

South Western

12 %

North Western

19 %

Western

17 %Southern

23 %

Northern

16 %

Central

13 %

NEW CONNECTIONS PERREGION 2012/2013

Distributions

5 %

42

Annual FinancialStatements

NOTE 2013 2012 R RNET ASSETS AND LIABILITIES Net Assets 4 942 315 192 4 194 087 131Capital replacement reserve 1 779 345 878 1 540 958 083Capitalisation reserve 0 0Government grant reserve 904 747 053 713 932 034Donations and publiccontribution reserves 174 810 952 124 754 665Self-insurance reserve 0 0COID reserve 0 0Revaluation reserve 0 0Accumulated Surplus/(Deficit) 2 083 411 308 1 814 442 349

LIABILITIES

Non-current liabilities 2 012 153 177 2 156 914 911Long-term liabilities 1 2 012 153 177 2 156 914 911Non-current provisions 0 0

Current liabilities 2 089 048 423 1 927 894 376Consumer deposits 2 927 998 722 827 103 307Provisions 0 0Creditors 3 1 116 536 111 1 038 029 231Staff leave 38 582 498 35 026 749Unspent conditional grantsand receipts 295 000 20 443 806VAT 4 5 636 091 7 291 283Bank overdraft 0 0 Total Net Assets and Liabilities 9 043 516 792 8 278 896 418

ASSETS

Non-current assets 4 889 830 201 4 523 000 316Property, plant and equipment 5 4 799 701 583 4 433 486 984Intangible Assets 18 69 242 638 68 627 352Investments 6 20 885 980 20 885 980

Current assets 4 153 686 591 3 755 896 102Inventory 7 77 513 184 83 176 170Consumer debtors 8 955 152 309 912 625 666Other debtors 9 170 286 988 127 749 509VAT 19 0 0Bank balances and cash 20 2 950 734 110 2 632 344 757

Total Assets 9 043 516 792 8 278 896 418

43

STATEMENT OF FINANCIAL PERFORMANCE FOR THE YEAR ENDED 30 JUNE 2013

ACTUALS ADJUSTED BUDGET ACTUALSNote 2013 2013 2012

R R RREVENUE - Exchange TransactionsService Charges 11 9 326 203 374 9 514 858 900 8 494 012 989Rental of Facilities and Equipment 370 299 581 000 529 516Interest Earned 93 151 258 95 478 780 79 492 695Interest Earned - Outstanding Debtors 22 243 393 21 714 910 20 971 825Other Income 12 123 029 666 151 020 690 144 673 208Public Contributions and Donations 45 293 587 27 000 000 13 163 587Gains on disposal of Prop; Plant; Equip 1 789 165 3 000 000 6 187 234Internal Income 243 846 894 194 247 040 192 970 500

Total Revenue from exchange transactions 9 855 927 634 10 007 901 320 8 952 001 554

Revenue from non-exchange transactionsTransfer revenueGovernment Grants and Subsidies 13 229 256 935 209 108 130 114 531 193

Total Revenue from exchange transactions 229 256 935 209 108 130 114 531 193

Total Revenue 10 085 184 569 10 217 009 450 9 066 532 747

EXPENDITUREEmployee Related Costs 14 732 829 695 831 582 940 656 861 046Contribution to Provision for Bad Debts 28 355 274 28 725 000 23 086 710Depreciation 238 271 098 247 394 950 222 347 892Repairs and Maintenance 520 567 882 602 582 920 508 323 496Interest Paid 15 216 737 290 282 225 580 213 076 263Bulk Purchases 16 6 190 306 793 6 487 287 310 5 510 491 957Contracted Services 178 754 110 200 252 120 167 334 421General Expenses 167 146 524 198 726 630 134 118 659Loss on disposal of Prop; Plant; Equip 555 356 327 600 394 891Internal Charges 403 640 746 379 349 240 371 677 757

Total Expenditure 8 677 164 768 9 258 454 290 7 807 713 093

Operating Surplus 1 408 019 800 958 555 160 1 258 819 654

Cross Subsidisation -659 791 740 -681 277 500 -548 076 046Other -748 228 061 -277 277 660 -710 743 608

SURPLUS FOR THE YEAR -0 0 0

44

STATEMENT OF CHANGES IN NET ASSETS FOR THE YEAR ENDED 30 JUNE 2013

Reconciliation of Surplus for the year 2013Surplus for the year 453 118 342Capital Replacement Reserve 54 238 412PPE Purchased:Capital Grants used to purchase PPE 229 256 935Donations and Public Contributions 55 122 322Offsetting of Depreciation -43 507 950

Total Received for the Year 748 228 061

Housing Capital Capitalisation Government Donations Self- C.O.I.D. Revaluation Accumulated TOTAL Development Replacement Reserve Grant and Public Insurance Reserve Reserve Surplus /

Fund Reserve Reserve Contributions Reserve (Deficit)ELECTRICITY Reserve

R R R R R R R R R ROpening Balance 01 July 2011 0 1 106 250 668 0 634 043 565 106 581 022 0 0 0 1 636 468 267 3 483 343 522Adjustments - Asset Life Ext. (Note 21) 0 0 0 0 0 0 0 0 0 0

Opening Balance 01 July 2011 as restated 0 1 106 250 668 0 634 043 565 106 581 022 0 0 0 1 636 468 267 3 483 343 522Surplus / (Deficit) for the year 0 0 0 0 0 0 0 0 710 743 609 710 743 609Transfer to Capital Replacement Reserve 0 612 681 497 0 0 0 0 0 0 -612 681 497 0PPE purchased 0 -177 974 082 0 0 0 0 0 0 177 974 082 0Capital Grants used to purchase PPE 0 0 0 114 531 194 0 0 0 0 -114 531 194 0Donated / contributed PPE 0 0 0 0 22 481 465 0 0 0 -22 481 465 0Contribution to Insurance Reserve 0 0 0 0 0 0 0 0 0 0Insurance claims processed 0 0 0 0 0 0 0 0 0 0Transfer to Housing Development Fund 0 0 0 0 0 0 0 0 0 0Offsetting of Depreciation 0 0 0 -34 642 725 -4 307 822 0 0 0 38 950 547 0

Closing Balance at 30 June 2012 as restated 0 1 540 958 083 0 713 932 034 124 754 665 0 0 0 1 814 442 349 4 194 087 131

2013Adjustments - Asset Life Ext. (Note 21) 0Change in accounting policy 0

Re-stated Balance 0 1 540 958 083 0 713 932 034 124 754 665 0 0 0 1 814 442 349 4 194 087 131

Surplus / (Deficit) for the year 0 0 0 0 0 0 0 0 748 228 061 748 164 456Transfer to Capital Replacement Reserve 0 507 356 754 0 0 0 0 0 0 -507 356 754 -0PPE purchased 0 -268 968 959 0 0 0 0 0 0 268 968 959 0Capital Grants used to purchase PPE 0 0 0 229 256 935 0 0 0 0 -229 256 935 0Donated / contributed PPE 0 0 0 0 55 122 322 0 0 0 -55 122 322 0Contribution to Insurance Reserve 0 0 0 0 0 0 0 0 0 0Insurance claims processed 0 0 0 0 0 0 0 0 0 0Transfer to Housing Development Fund 0 0 0 0 0 0 0 0 0 0Offsetting of Depreciation / Asset Disposals 0 0 0 -38 441 915 -5 066 035 0 0 0 43 507 950 0

Balance at 30 June 2013 0 1 779 282 273 0 904 747 053 174 810 952 0 0 0 2 083 411 308 4 942 251 587

45

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

3. CREDITORS

Trade Creditors 1 031 405 642 933 696 798Payments Received in Advance 32 405 080 18 405 516Retentions 19 212 442 24 698 805Other Creditors 32 707 947 61 228 112Guarantees in Lieu of Deposits 805 000 0

1 116 536 111 1 038 029 231

4. VAT

Vat Payable 5 636 091 7 291 283

VAT is payable on the receipts basis. Only once payment is received from debtors is VAT paidover to SARS

2013 2012R R

1. LONG-TERM LIABILITIES

External Financing FundDevelopment Bank of South Africa 1 310 614 239 1 393 114 926European Investment Bank 100 065 670 108 877 520Internal Loans - ESF (FRB) 97 626 084 112 838 212Nedbank Loans 68 855 201 74 682 118ABSA Loan 238 536 733 267 218 259RMB Loan 196 455 250 200 052 227SLC Stock 0 131 649

Total External Loans 2 012 153 177 2 156 914 911

2. CONSUMER DEPOSITS

Electricity Deposits 877 822 989 780 028 327Guarantees in Lieu of Deposits 0 700 000Interest on Consumer Deposits 50 175 733 46 374 980

Total Consumer Deposits 927 998 722 827 103 307

Included in deposits is an accrual of interest at an effective rate of 3.00% p.a(2012: 3.00% p.a ) which is paid to consumers when deposits are refunded.

Guarantees iro prepayment vendors 805 000 700 000

Interest paid on consumer deposits 9 406 980 8 786 903

46

5. PROPERTY, PLANT AND EQUIPMENT Land Buildings Infrastructure Plant & Equip. Total

Reconciliation of Carrying Value R R R R R

Carrying Values at 1 July 2012 127 148 551 78 074 390 3 994 020 301 234 243 750 4 433 486 984

Cost 127 148 551 106 654 609 5 832 484 097 485 067 258 6 551 354 515

Valuation 0 0 0 0 0

Accumulated depreciation 0 -28 580 219 -1 838 463 796 -250 823 508 -2 117 867 523

- Cost 0 -29 215 274 -1 849 585 777 -279 934 720 -2 158 735 771

- Revaluation 0 635 055 11 121 981 29 111 212 40 868 248

Acquisitions 4 382 674 11 787 245 263 561 383 86 429 309 366 160 611

Capital under construction 0 16 744 530 188 883 900 27 452 028 233 080 458

Increases/decreases in revaluation - - - - -

Transfers - Cost 0 0 0 0 0

Transfers - Depreciation 0 0 0 0 0

Depreciation 0 -2 327 734 -179 651 884 -50 114 472 -232 094 090

- based on cost 0 -2 327 734 -179 651 884 -50 114 472 -232 094 090

- based on revaluation 0 0 0 0 0

Carrying value of disposals 0 0 -656 532 -339 453 -995 985

Cost/revaluation 0 0 -70 004 983 -9 897 911 -79 902 894

Accumulated depreciation 0 0 69 348 451 9 558 458 78 906 909

Impairment losses - - 0 - -

Other movements - Intangible Assets - Cost - - 0 0 0

Other movements - Intangible Assets - Accumulated Depreciation - - 0 0 0

Carrying values at 30 June 2013 131 531 225 104 278 431 4 266 157 168 297 671 162 4 799 637 978

Cost 131 531 225 135 186 384 6 214 924 397 589 050 684 7 070 692 690

Revaluation 0 0 0 0 0

Accumulated depreciation 0 -30 907 953 -1 948 767 229 -291 379 522 -2 271 054 704

- Cost 0 -31 543 008 -1 959 889 210 -320 490 734 -2 311 922 952

- Revaluation 0 635 055 11 121 981 29 111 212 40 868 248

47

Land Buildings Infrastructure Plant & Equip. Total

Reconciliation of Carrying Value R R R R R

Carrying Values at 1 July 2011 123 652 175 75 977 127 3 665 619 079 217 116 685 4 082 365 060

Cost 123 652 175 102 282 530 5 343 035 519 421 666 564 5 990 636 788

Valuation 0 0 0 0 0

Accumulated depreciation 0 -26 305 403 -1 677 416 440 -204 549 879 -1 908 271 722

- Cost 0 -26 940 458 -1 688 538 421 -233 661 091 -1 949 139 970

- Revaluation 0 635 055 11 121 981 29 111 212 40 868 248

Acquisitions 3 496 376 1 780 243 897 685 180 79 313 838 982 275 637

Capital under construction 0 2 591 836 -408 236 602 -12 142 105 -417 786 871

Increases/decreases in revaluation - - - - -

Transfers - Cost 0 0 0 0 0

Transfers - Depreciation 0 0 0 0 0

Depreciation 0 -2 274 816 -161 047 356 -49 625 751 -212 947 923

- based on cost 0 -2 274 816 -161 047 356 -49 625 751 -212 947 923

- based on revaluation 0 0 0 0 0

Carrying value of disposals 0 0 0 -418 917 -418 917

Cost/revaluation 0 0 0 -3 771 039 -3 771 039

Accumulated depreciation 0 0 0 3 352 122 3 352 122

Impairment losses - - 0 - -

Other movements - Intangible Assets - Cost - - 0 0 0

Other movements - Intangible Assets - Accumulated Depreciation - - 0 0 0

Carrying values at 30 June 2012 127 148 551 78 074 390 3 994 020 301 234 243 750 4 433 486 984

Cost 127 148 551 106 654 609 5 832 484 097 485 067 258 6 551 354 515

Revaluation 0 0 0 0 0

Accumulated depreciation 0 -28 580 219 -1 838 463 796 -250 823 508 -2 117 867 523

- Cost 0 -29 215 274 -1 849 585 777 -279 934 720 -2 158 735 771

- Revaluation 0 635 055 11 121 981 29 111 212 40 868 248

48

2013 2012R R

6. INVESTMENTSC.I.F. Investment 20 885 980 20 885 980Investments held in the Consolidated Investment Fundare invested in accordance with Municipal Investment Regulations which forms part of the Municipal Finance Management Act, No. 56 of 2003.

Moneys were invested in fixed deposits and call depositswith the Banks, earning an average interest rate of5.775% (2012) and 5.518% (2013)

7. INVENTORYStock on hand 77 513 184 83 176 170

8. CONSUMER DEBTORSGROSS PROVISION

BALANCES FOR BAD DEBTS NET BALANCESAs at 30 June 2013 Service Debtors 1 134 455 735 -179 303 426 955 152 309Total 1 134 455 735 -179 303 426 955 152 309

As at 30 June 2012Service Debtors 1 084 635 862 -172 010 196 912 625 666

1 084 635 862 -172 010 196 912 625 666

2013 2012 R RElectricity: AgeingCurrent (0 - 30 days) 814 735 476 738 359 70431 - 60 Days 97 750 670 125 313 35861 - 90 Days 22 360 687 46 737 25691 - 120 Days 18 749 370 13 612 141121 - 365 Days 180 859 532 160 613 402+365 Days 0 0

Total 1 134 455 735 1 084 635 862

49

Summary of Debtors by Customer Classification Consumers Industrial/Commercial

R R

30 JUNE 2013

Current (0 - 30 days) 420 496 200 394 239 276

31 - 60 Days 59 527 605 38 223 065

61 - 90 Days 15 938 735 6 421 952

91 - 120 Days 14 987 170 3 762 199

121 - 365 Days 168 245 526 12 614 006

+365 Days 0 0

Sub-total 679 195 236 455 260 499

Less: Provision for bad debts -144 635 664 -34 667 762

Total debtors by customer classification 534 559 572 420 592 737

Summary of Debtors by Customer Classification

30 JUNE 2012

Current (0 - 30 days) 369 129 444 369 230 261

31 - 60 Days 52 884 304 72 429 053

61 - 90 Days 18 538 936 28 198 320

91 - 120 Days 11 846 810 1 765 331

121 - 365 Days 159 934 519 678 883

+365 Days 0 0

Sub-total 612 334 014 472 301 849

Less: Provision for bad debts -159 889 962 -12 120 235

Total debtors by customer classification 452 444 052 460 181 614

2013 2012R R

Reconcilliation of bad debts provision

Balance at beginning of the year 172 010 196 204 567 091

Contributions to Provision 29 640 000 24 000 000

Bad debts Written off against provision -22 346 770 -56 556 895

179 303 426 172 010 196

50

2013 2012R R

9. OTHER DEBTORSInsurance Recoverables 115 771 073 98 815 787Private Jobs - Cost of Work done 10 749 282 5 759 264Prepayment Meter Token Sales 13 173 833 7 895 317Sundry Debtors - General 28 792 429 12 474 064Metro Water 0 126 181Mechanical Workshops 0 64 711Debtors Capital 1 324 706 1 418 663Insurance Sundry Accounts 469 608 1 189 464Apprentice Tools Cost/Recovery 6 057 6 057CL A/C - Refuse Disposal 0 0Corporate Services 0 0

170 286 988 127 749 509

10. BANK, CASH & OVERDRAFT BALANCES

Ethekwini Electricity has the following bank accounts:

Electricity Expenditure Account

Standard Bank - Kingsmead - Account Number 050134701

Cash book balance at beginning of year 78 474 625 42 896 234

Cash book balance at end of year 104 062 644 78 474 625

Bank statement balance at beginning of year 3 195 785 615 651

Bank statement balance at end of year 2 998 252 3 195 785

Electricity EFT Account

Standard Bank - Kingsmead - Account Number 050133608

Cash book balance at beginning of year 11 548 550 022 3 983 306 336

Cash book balance at end of year 20 000 019 489 11 548 550 022

Bank statement balance at beginning of year 611 960 369 530 421 070

Bank statement balance at end of year 614 401 966 611 960 369

2013 2012R R

Electricity Foreign Exchange Account

Standard Bank - Kingsmead - Account Number 050134698

Cash book balance at beginning of year 5 389 985 0

Cash book balance at end of year 9 113 653 5 389 985

Bank statement balance at beginning of year 5 390 177 0

Bank statement balance at end of year 923 442 5 390 177

51

ACTUALS ADJUSTED BUDGET ACTUALS2013 2013 2012

11. SERVICE CHARGES00101 - Bulk Supply 3 635 164 500 3 645 682 090 3 207 748 15600102 - Business Cooking - Scale 5 34 412 598 36 763 420 33 644 00400103 - Business and General Scale 1 1 767 739 657 1 789 561 660 1 622 113 27000106 - Industrial Water Heating & Pumping 9 694 196 12 010 050 9 878 30500107 - Prepayment Meters - FBE 57 791 707 50 238 470 49 814 55400108 - Prepayment Meters 699 226 704 723 361 850 645 568 42400109 - Residential Scale 3 and 4 2 710 411 169 2 905 697 710 2 534 662 07100111 - Sundry Income - Private Lights 1 152 232 1 276 900 1 285 46900112 - Two Rate - Scale 2 420 919 901 449 712 380 398 643 38200120 - Poverty Relief/Indigent/EBBST 67 305 385 68 290 800 55 157 79500122 - Income Foregone - Load Shedding 0 -88 714 180 020300 - Electricity -10 309 290 -10 731 450 -9 344 64620385 - Free Basic Electricity - Municipality -67 305 385 -68 290 800 -55 157 795

Total Service Charges 9 326 203 374 9 514 858 900 8 494 012 989

12. OTHER INCOME00119 - Traffic Signals 1 810 513 6 613 940 5 704 85200201 - Surcharge Business Levy 0 0 27 67100202 - EB Steam - Wheeling Charges 0 24 137 470 14 714 92700204 - Lotus Park - Wheeling Charges 81 329 105 000 130 74000205 - Wheeling Incentive 136 888 0 116 42700405 - Admin Charge - PAFC & Insurance 8 396 345 3 138 860 7 435 35500408 - Meter Reconnection and Test Fees 18 809 764 20 666 800 20 049 42700412 - Sundry Income - Taxable 4 043 453 1 250 570 1 278 13200413 - Sundry Sales 2 511 130 1 252 210 582 74200416 - Settlement Discount 1 266 024 1 837 830 1 773 99100417 - Tender Document Fees 264 150 260 000 249 40000418 - Sweep Reconnection Fees 702 681 500 900 447 12700425 - Training - Local Government 51 689 69 450 181 40400426 - Training - Contractors 166 390 231 500 215 43900427 - Training - Outside Organisations 590 863 606 180 761 21600431 - Meter Test Fees 60 867 98 860 70 99900434 - Promotional Items 6 695 1 120 7 79000435 - Proceeds from Insurance - Operating 21 852 904 26 250 000 24 954 24800455 - Rural Electrification Project 0 0 640 51900506 - Prepayment Connection Fess 14 183 832 9 000 000 15 186 15100507 - Conventional Connection Fees 38 265 415 45 000 000 40 826 77300508 - Proceeds from Insurance - Capital 9 828 734 10 000 000 9 317 878Total Other Income 123 029 666 151 020 690 144 673 208

52

ACTUALS ADJUSTED BUDGET ACTUALS2013 2013 2012

13. GOVERNMENT GRANTS AND SUBSIDIES00121 - Municipal Infrastructure Grant 0 0 000123 - Equitable Share 0 0 000500 - Capital Grant - Urban Settlement Development 133 527 984 133 527 990 24 953 54200501 - Capital Grant - Demandside Management 20 148 806 0 3 851 19400502 - Capital Grant - Equit Share 70 580 145 70 580 140 55 226 45700503 - Capital Grant - Electr. Prog 5 000 000 5 000 000 30 500 000

Total Government Grants and Subsidies 229 256 935 209 108 130 114 531 193

13.1 Urban Settlement Development GrantBalance unspent at beginning of year 0 0Current years receipts 133 527 984 24 500 000Conditions met - transferred to revenue -133 527 984 -24 500 000Conditions still to be met - transferred to liabilities 0 0

13.2 Electrification Programme - INEPBalance unspent at beginning of year 0 0Current years receipts 5 000 000 30 500 000Conditions met - transferred to revenue -5 000 000 -30 500 000Conditions still to be met - transferred to liabilities 0 0

13.3 Equitable ShareBalance unspent at beginning of year 0 0Current years receipts 70 580 145 55 226 457Conditions met - transferred to revenue -70 580 145 -55 226 457Conditions still to be met - transferred to liabilities 0 0

13.4 SANEDI GrantBalance unspent at beginning of year 0 0Current years receipts 0 453 542Conditions met - transferred to revenue 0 -453 542Conditions still to be met - transferred to liabilities 0 0

13.5 Demand Management GrantBalance unspent at beginning of year 20 148 806 0Current years receipts 0 24 000 000Conditions met - transferred to revenue -20 148 806 -3 851 194Conditions still to be met - transferred to liabilities 0 20 148 806

13.6 DANIDA GrantBalance unspent at beginning of year 295 000 935 519Current years receipts 0 0Conditions met - transferred to revenue 0 -640 519Conditions still to be met - transferred to liabilities 295 000 295 000

53

ACTUALS ADJUSTED BUDGET ACTUALS2013 2013 2012

14. EMPLOYEE RELATED COSTS10100 - Staff Salaries 398 345 768 430 842 200 364 789 78210101 - Staff Overtime 92 339 875 92 960 000 75 719 07410104 - Pensioners Medical Aid 9 536 737 9 536 730 8 056 77610105 - Council Pensions 5 802 724 5 802 730 5 205 86410106 - Housing Subsidy 2 313 116 4 674 200 2 430 79610107 - Durban Pension Fund 69 333 882 79 468 400 64 124 65410110 - Medical Aid 33 777 305 40 388 460 30 074 01410116 - Holiday Bonus 31 117 439 36 371 810 28 265 95310120 - Market/Scarce Skills Allowance 34 423 190 34 423 190 32 000 03010122 - Emergency Sustenance 1 154 377 1 200 000 010198 - Task Implementation 0 2 000 000 010199 - Contingency Staff Vacancy 0 35 000 000 010220 - Cell Phone Allowances 3 085 900 3 175 000 2 389 20010300 - Executive Packages 9 299 118 11 234 010 9 480 79010400 - Locomotion Allowances 35 000 732 35 000 740 30 195 51510401 - Travelling Allowances 8 498 30 950 79410402 - Telephone Allowances 1 920 2 680 3 22010403 - Travel and Subsistence 105 309 181 900 109 56710500 - Temporary Staff 4 022 577 4 133 760 3 549 78010501 - Uniforms 2 168 676 2 247 370 1 538 04610502 - Education Fees 940 496 950 000 812 03910503 - Travel & Removal Costs 70 841 160 500 219 89610506 - Unemployment Insurance Fund 3 408 755 3 408 760 2 944 17210507 - Employment Services 3 122 011 5 350 000 3 344 36210508 - Leave Comm - Trf Ex Provision 10 845 186 11 342 000 9 942 91610510 - Employ - Cost Capitalised Offset -17 395 437 -18 303 150 -18 336 19410700 - Ward Committee Training 700 700 0

Total Employee Related Costs 732 829 695 831 582 940 656 861 046

54

ACTUALS ADJUSTED BUDGET ACTUALS2013 2013 2012

15. INTEREST PAID29560 - Interest 207 330 310 273 755 580 204 289 36029563 - Interest - Consumer Deposits 9 406 980 8 470 000 8 786 903

Total of Interest Paid 216 737 290 282 225 580 213 076 263

16. BULK PURCHASES00901 - Eskom - Maximum Demand Charge 347 654 847 364 061 720 321 432 79200902 - Eskom - Unit Charge 4 473 538 8 862 620 4 144 30800905 - Service Fees 882 433 900 290 798 11600908 - Elect - Landfill Site - Marianhill 2 612 092 3 594 310 2 224 07000911 - Elect - Landfill Site - Bisasar Road 22 683 663 26 920 650 18 286 39600912 - Energy Charge (Peak) 1 758 570 403 1 873 600 130 1 630 196 39100913 - Energy Charge (Std) 1 792 790 551 1 884 295 650 1644 342 14800914 - Energy Charge (Off) 1 182 355 063 1 207 953 110 1 047 753 39200915 - Rate Rebalancing Levy 519 178 378 530 491 890 469 134 60400916 - Environmental Levy 398 657 801 420 000 000 228 382 89000917 - Eskom - Admin. Charge 160 217 192 260 144 75700918 - Transmission Network Charge 158 102 288 163 323 360 142 479 63900919 - Residual Connection Charge 501 552 719 640 501 55200920 - KVARH Surcharge 5 676 136 680 8 59800929 - Co-Generation Energy 1 678 291 2 235 000 662 303

Total Bulk Purchases 6 190 306 793 6 487 287 310 5 510 491 957

17. CAPITAL COMMITMENTSCommitments in respect of Capital Expenditure:Approved and contracted for - Electricity 3 587 040 176 128 690Approved but not yet contracted for - Electricity 554 717 511 436 608 830

Total 558 304 551 612 737 520

This expenditure will be financed from:Government Grants 0 0Own Resources 558 304 551 612 737 520

55

2013 2012R R

18. INTANGIBLE ASSETSServitudesOpening Balance 48 190 078 47 882 860Acquisitions 172 598 307 218Disposals - Cost 0 0

48 362 676 48 190 078

Computer SoftwareOpening Balance 20 437 274 27 251 313Accumulated Depreciation 0 0

20 437 274 27 251 313Acquisitions 361 304 978 155Work in Progress 6 321 997 1 607 775Depreciation for the year -6 240 613 -9 399 969Transfers - Cost 0 0Transfer - Depreciation 0 0Disposals - Cost 0 0Disposals - Depreciation 0 0

20 879 962 20 437 274

19. VATVat Receivable 0 0

20. BANK AND CASH BALANCES 2 950 734 110 2 632 344 757

56

21. LOSS IN ELECTRICITY DISTRIBUTIONEstimated Electricity losses 667 412 169 kWh (2012: 664 796 777 kWh) occured during theyear under review which resulted in revenue losses to the municipality. These estimated electricitylosses amounted to R396 million (2012: R364m)

The norm for electricity losses ranges from 5.6% to 12%. The loss incurred by the municipalityis 5.85% (2012: 5.8%) and is due to a combination of transmission/distribution losses andlosses due to illegal connections. In comparison to other Metro’s, eThekwini Municipality maintainsits losses at a lower end of the norm.

Transmission losses are inevitable, however, the following interventions have been implemented:

� OPTIMAL NETWORK CONFIGURATIONThe Planning and Design engineers ensure that all network additions are implemented withcorrect equipment ratings and configuration so as to minimize losses.

� EFFECTIVE MAINTENANCE ON NETWORKThe unit has adopted a comprehensive maintenance schedule to promote the reliability of thenetwork as well as enhance the efficiency of the network.

� EFFICIENT NETWORK LOADINGPower flow into the network is carefully monitored on a 24 hour basis and the correct, mostefficient electrical loading configuration is adopted

Illegal electricity connections are a major contribution factor to non-technical losses. Thefollowing interventions have been implemented to curb illegal connections:

� AREA SWEEPSThe Revenue Protection teams continuously investigate high theft area’s to remove all illegalconnections.

� EMPLOYMENT OF SECURITY INTELLIGENCE TEAMSPrivate investigators are deployed to site to try and gather evidence to apprehend suspects.

� INSTALLATION OF ANTI-THEFT TECHNOLOGIES AT SUBSTATIONSThe employment of this technology deters intruders from entering into substations and carrying out illegal connections.

� THEFT HOTLINEA 24 hour hotline has been set up to report acts of theft and illegal connections - Once a

suspicious activity is reported, security will be despatched immediately to the affected site.

57

Statistical Data:Customer Base Statistics

01 / 02 02 / 03* 03 / 04* 04 / 05* 05 / 06* 06 / 07* 07 / 08* 08 / 09* 09/10* 10/11* 11/12* 12/13**NUMBER OF CUSTOMERSBusiness & General 42 199 39 374 42 952 44 143 42 010 42 980 44 261 44 832 45 007 44 213 43 897 44 654Private Residences 313 244 304 831 307 608 310 955 314 975 319 516 323 389 326 386 327 002 324 044 321 904 319 662Other 1 537 1 563 1 449 1 398 1 173 4 4 4 4 4 4 4Bulk 702 725 734 739 748 730 746 744 769 821 819 888Prepayment 191 020 187 044 211 784 227 895 243 549 254 017 263 712 275 670 289 946 305 977 333 434 339 327Total 548 702 533 537 564 527 585 130 602 455 617 247 632 112 647 636 662 728 675 059 700 040 711 095

UNITS (kWh)Business & General 1 733 881 698 1 906 430 575 1 912 939 115 1 900 283 815 1 887 628 514 2 161 999 56 2 203 077 556 2 205 258 603 2 662 458 083 2 921 756 030 2 723 355 860 2 367 758 535Private Residences 2 691 882 060 2 860 048 650 2 862 123 618 2 873 337 222 2 900 907 487 3 006 373 582 3 013 288 241 2 900 914 449 2 826 464 091 2 500 569 276 2 495 936 487 2 680 118 904Other 102 439 716 86 911 187 132 286 050 140 222 213 123 385 815 36 693 199 37 605 719 37 677 922 39 678 620 41 785 554 86 221 641 95 297 605Bulk 4 668 286 749 4 780 752 550 4 931 845 221 5 029 924 160 5 056 990 152 5 105 603 247 5 221 414 480 5 037 894 890 4 621 341 025 4 582 863 945 4 666 663 006 4 781 979 791Prepayment 302 677 501 380 972 540 451 783 592 514 181 235 587881511 652 855 481 687 805 495 738 475 562 774 714 890 789 573 652 826 397 419 819 810 059Total 9 589 115 852 10 015 115 502 10 290 977 596 10 457 948 645 10 556 793 479 10 963 525 073 11 163 191 492 10 920 221 425 10 924 656 709 10 836 548 456 10 798 574 412 10 744 964 894

UNITS GROWTHBusiness & General 8.08% 9.95% 0.34% 0.34% -6.91% 14.54% 1.90% 0.10% 20.73% 10% -6.79% -13.06%Private Residences 1.94% 6.25% 0.07% 0.07% 0.96% 3.64% 0.23% -3.73% -2.57% -12% -0.19% 7.38%Other -48.05% -15.16% 52.21% 52.21% -12.01% -70.26% 2.49% 0.19% 5.31% 5% 106.34% 10.53%Bulk 1.93% 0.47% 3.16% 3.16% 3.15% 0.96% 2.27% -3.51% -8.27% -1% 1.83% 2.47%Prepayment 1.94% 25.87% 18.59% 18.59% 14.33% 11.05% 5.35% 7.37% 4.91% 2% 4.66% -0.80%Total 1.93% 4.44% 2.75% 1.62% 0.95% 3.85% 1.82% -2.18% 0.04% -1% -0.35% -0.50%

INCOME IN RANDSBusiness & General 547 072 134 591 530 415 619 394 717 672 858 784 687 641 951 779 362 349 844 191 522 1 075 040 391 1 391 466 489 1 767 021 296 2 064 278 962 2 232 766 352Private Residences 753 137 505 824 037 901 894 861 179 941 481 632 981 363 145 1 090 027 087 1 150 908 334 1 416 756 093 1 783 179 755 2 153 301 353 2 534 662 071 2 710 411 169Other 13 405 297 15 775 113 18 036 972 22 214 691 20 181 773 13 433 024 15 189 096 19 709 806 25 294 174 36 500 000 51 154 591 51 019 905Bulk 883 707 491 965 030 032 1 079 243 856 1 062 055 560 1 153 442 450 1 231 234 899 1 353 175 863 1 711 042 139 2 091 798 008 2 658 783 133 3 207 748 156 3 635 164 500Prepayment 123 766 823 134 997 906 154 263 532 168 477 331 204 733 254 241 183 183 275 381 501 377 042 920 494 949 284 584 894 116 695 382 979 757 018 411Total 2 321 089 250 2 531 371 367 2 765 800 256 2 867 087 998 3 047 362 573 3 355 240 542 3 638 846 315 4 599 591 348 5 786 687 710 7 200 499 898 8 553 226 758 9 386 380 338

CENTS/UNITBusiness & General 31.6 31.03 32.38 35.41 36.43 36.05 38.32 48.75 52.26 60.48 75.80 94.30Private Residences 28.0 28.81 31.27 32.77 33.83 36.26 38.19 48.84 63.09 86.11 101.55 101.13Other 13.1 18.15 13.63 15.84 16.36 36.61 40.39 52.31 63.75 87.35 59.33 53.54Bulk 18.6 20.19 21.88 21.11 22.81 24.12 25.92 33.96 45.26 58.02 68.74 76.02Prepayment 40.9 35.44 34.15 32.77 34.83 36.94 40.04 51.06 63.89 74.08 84.15 92.34Total 24.21 25.28 26.88 27.42 28.87 30.60 32.60 42.12 52.97 66.45 79.21 87.36

Ave Units/Mnth/CustBusiness & General 3 424 4 035 3 711 3 542 4 087 4 192 4 148 4 099 4 930 5 507 5 172 4 419Private Residences 716 782 775 747 825 784 776 741 720 643 646 699Other 5 554 4 634 7 608 8 359 8 766 764 442 783 452 784 957 826 638 870 532 1 796 284 1 985 367Bulk 564 843 549 512 559 928 567 199 563 390 582 831 583 268 564 280 500 796 465 171 474 833 448 759Prepayment 132 170 178 186 196 214 217 223 223 215 207 201Total 1 456 1 564 1 519 1 459 1 509 1 480 1 472 1 405 1 374 1 338 1 285 1 271

Ave Rands/Month/CustBusiness & General 1 080 1 252 1 202 1 254 1 489 1 511 1 589 1 998 2 576 3 331 3 920 4 167Private Residences 200 225 242 252 260 284 297 362 454 554 656 707Other 727 841 1 037 1 324 1 434 279 855 316 440 410 621 526 962 760 417 1 065 721 1 062 915Bulk 104 904 110 923 122 530 119 763 128 503 140 552 151 159 191 649 226 697 269 872 326 389 341 138Prepayment 54 60 61 62 70 79 87 114 142 159 174 186Total 353 395 408 408 422 453 480 592 728 889 1 018 1 110

NOTE: * Adjusted to registered meters on database** Adjusted to include total connections added for year

58

NOTE: # figures now include sales and purchases for Tongaat, Mpumalanga and Magabeni

*Kingsburgh added

Statistical Data:Maximum Demand and Energy Sales per Annum

Year MaximumkVA Percent Energy Percent Energy (kWh) Percent Percent Power factor Average monthly Number ofgrowth (kWh) sold growth purchased growth loss at system peak load factor customers

87/88 1 151 613 2.20% 6 590 701 115 3.41% 6 889 777 935 3.00% 4.34% 97.20% 70.47% 245 831

88/89 1 196 636 3.91% 6 986 105 898 6.00% 7 337 830 336 6.50% 4.79% 98.40% 72.73% 252 518

89/90 1 232 618 3.01% 7 201 068 113 3.08% 7 634 669 960 4.05% 5.68% 100.00% 72.92% 284 661

90/91 1 268 538 2.91% 7 426 490 766 3.13% 7 697 377 076 0.82% 3.52% 100.00% 73.87% 290 070

91/92 1 286 335 1.40% 7 548 660 345 1.65% 7 928 532 199 3.00% 4.79% 97.50% 72.90% 299 948

92/93 1 313 385 2.10% 7 688 164 852 1.85% 8 145 319 531 2.73% 5.61% 100.00% 70.80% 329 969

93/94 1 383 431 5.33% 8 047 317 773 4.67% 8 494 913 446 4.29% 5.27% 99.90% 72.80% 359 516

94/95 1 426 277 3.10% 8 202 460 186 1.93% 8 738 907 153 2.87% 6.14% 99.90% 72.90% 386 361

95/96 1 469 256 3.01% 8 419 518 677 2.65% 9 021 770 028 3.24% 6.68% 99.90% 73.46% 428 035

96/97 1 585 122 7.89% 8 941 330 717 6.20% 9 571 358 173 6.09% 6.58% 99.90% 74.37% 451 751

97/98 # 1 585 060 0.00% 9 183 151 356 2.70% 9 813 695 486 2.53% 6.43% 99.90% 76.26% 477 416

98/99 # 1 601 635 1.05% 9 073 412 900 -1.19% 9 851 495 987 0.39% 7.90% 99.90% 76.55% 505 501

99/00 # 1 572 339 -1.83% 9 195 922 772 1.35% 9 956 607 592 1.07% 7.64% 98.60% 77.37% 523 176

00/01 # 1 592 211 1.26% 9 407 440 209 2.30% 10 105 748 000 1.50% 6.91% 98.60% 78.52% 525 551

01/02 # 1 610 173 1.13% 9 589 115 852 1.93% 10 224 641 034 1.18% 6.22% 98.10% 79.45% 548 702

02/03 # 1 650 089 2.48% 10 015 115 502 4.44% 10 552 641 000 3.21% 5.09% 98.00% 78.49% 533 527

03/04 # 1 667 942 1.08% 10 290 977 595 2.75% 10 803 947 948 2.38% 4.75% 99.90% 74.15% 564 527

04/05 # 1 765 855 5.87% 10 457 948 645 1.62% 11 053 953 456 2.31% 5.39% 99.80% 76.53% 585 130

05/06 # 1 783 038 0.97% 10 556 793 479 0.95% 11 186 048 110 1.19% 5.63% 99.90% 72.75% 602 455

06/07 # 1 857 178 4.16% 10 963 525 073 3.85% 11 580 771 534 3.53% 5.33% 98.13% 73.98% 617 247

07/08 # 1 890 043 1.77% 11 163 191 492 1.82% 11 751 787 312 1.48% 5.01% 97.27% 75.90% 632 112

08 / 09 # 1 897 005 0.37% 10 920 221 425 -2.18% 11 504 658 024 -2.10% 5.08% 95.65% 74.42% 647 636

09 / 10 # 1 812 881 -4.43% 10 924 565 709 0.04% 11 495 870 884 -0.08% 5.00% 95.57% 74.24% 662 727

10 / 11 # 1 817 870 0.28% 10 836 548 456 -0.81% 11 467 431 990 -0.25% 5.50% 95.46% 75.00% 675 059

11 / 12 # 1 893 125 4.14% 10 798 574 412 -0.35% 11 463 371 189 -0.04% 5.80% 99.18% 74.42% 700 040

12 / 13 #* 1 828 468 -3.42% 10 744 964 894 -0.50% 11 412 377 063 -0.44% 5.85% 98.91% 74.55% 711 095

59

NOTE: Ratios of Admin and General Distribution have varied as a result of restructuring

Statistical Data:Expenditure per Annum

ITEM OF EXPENDITURE 01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12 12/13

DISTRIBUTION and Admin

Admin and general 340 287 001 384 858 119 424 125 981 468 674 230 624 140 246 766 654 479 844 540 463 1 068 195 348 1 172 269 797 1 272 836 749 1 575 821 377 1 749 616 409

Distribution 203 666 642 217 681 180 231 773 520 237 287 044 248 674 868 258 564 682 351 321 008 391 069 539 536 667 113 548 069 997 508 323 496 520 567 882

Sub Total 543 953 643 602 539 299 655 899 501 705 961 274 872 815 114 1 025 219 161 1 195 861 471 1 459 264 887 1 708 936 910 1 820 906 746 2 084 144 873 2 270 184 290

% increase 11% 11% 9% 8% 24% 18% 17% 22% 17% 7% 15% 9%

% of total expenditure 24% 24% 24% 24% 27% 28% 29% 29% 27% 24% 23% 23%

FUNDS

Capital Development 0 0 0 0 0 0 0 0 0 0 0 0

Rates and Genaral 136 554 095 147 832 718 157 905 047 169 912 469 189 162 190 357 509 683 477 063 733 395 876 280 448 205 520 498 760 834 548 076 046 659 791 740

Working Capital 11 688 488 99 076 208 121 334 894 149 687 274 90 000 000 258 235 673 290 856 887 413 521 565 427 377 149 721 389 400 710 743 608 748 164 456

Durban Metro 0 0 0 0 181 914 287 0 0 0 0 0 0 0

Sub-Total 148 242 583 246 908 926 279 239 941 319 599 743 461 076 477 615 745 356 767 920 620 809 397 845 875 582 669 1 220 150 234 1 258 819 654 1 407 956 196

increase -17% 67% 13% 14% 44% 34% 25% 5% 8% 39% 3% 12%

% of total expenditure 6% 10% 10% 11% 14% 17% 19% 16% 14% 16% 14% 14%

LOAN CHARGES

Sub-Total 320 336 624 273 858 000 315 325 905 316 056 450 0* 0 0 0 0 0 0 0

% increase -1% -15% 15% 0% 0% -22% -9% 17% 12% 3% 1% 2%

% of total expenditure 14% 11% 11% 11% 0% 5% 4% 4% 3% 3% 2% 2%

Interest Paid 0 0 0 0 218 808 794 171 542 017 156 036 300 182 419 882 204 605 993 211 132 352 213 076 263 216 737 290

ELECTRICITY PURCHASED

Energy 1 093 769 108 1 234 592 321 1 328 370 998 1 348 184 097 1 376 760 971 1 531 383 275 1 637 026 628 2 196 144 780 3 175 088 591 4 009 579 919 5 189 059 165 5 842 651 946

Demand 196 929 985 173 807 591 201 826 269 256 148 581 268 764 753 296 218 910 324 328 379 444 662 350 291 658 828 405 010 527 321 432 792 347 654 847

Sub-Total 1 290 699 093 1 408 399 912 1 530 197 267 1 604 332 678 1 645 525 724 1 827 602 185 1 961 355 007 2 640 807 130 3 466 747 419 4 414 590 446 5 510 491 957 6 190 306 793

% increase 8% 9% 9% 5% 3% 11% 7% 35% 31% 27% 25% 12%

% of total expenditure 56% 56% 55% 55% 52% 50% 48% 52% 55% 58% 61% 61%

TOTAL

Total Amount 2 303 231 943 2 531 706 137 2 780 662 614 2 945 950 145 3 198 226 109 3 640 108 719 4 081 173 398 5 091 889 744 6 255 872 991 7 666 779 778 9 066 532 747 10 085 184 569

% increase 5% 10% 10% 6% 9% 14% 12% 25% 23% 23% 18% 11%

60