2009 - 2014 Annual Business Plan

City Power (PTY) LTD
BUSINESS PLAN
2009 – 2014
City Power Draft Business Plan 09/14
TABLE OF CONTENTS
SECTION 1: EXECUTIVE SUMMARY 6
1.1 Highlights and Challenges of the business 6
1.2 Structure of the document 7
SECTION 2: COMPANY OVERVIEW 8
2.1 Vision, Mission and Mandate 8
2.1.1 Vision 8
2.1.2 Mission 8
2.1.3 Aspired values 8
2.1.4 Business Operations Principles 8
2.1.5. Company Details 8
2.1.6 Operating History 9
2.1.7. Organisational Management and Structure 9
2.2 Description of day-to-day operations 14
2.3 Quantitative Indicators 15
2.3.1 Provide Network Infrastructure 15
2.3.2 Distribute Electricity 16
2.3.3. Network Restoration 18
2.3.4 Suppliers of Materials 18
2.3.5 Quality of key customer Relations 19
2.4. Support Processes 23
SECTION 3: STRATEGIC AGENDA 24
3.1 Strategic Agenda Priorities 24
3.2 Strategy Management Processes 24
3.4 Strategic Goals 24
3.5 Mayoral Priorities 25
3.6 Company Strategic Priorities 25
3.7 Strategic Issues 26
3.8 Top 10 Priorities for 08/09 and 09/10 26
3.9 Five year strategy, IDP and delivery agenda 27
SECTION 4: OPERATIONS AGENDA 34
4.1. Service Delivery 34
4.1.1. Key Operations and Financial Impact 34
4.1.2 Core Processes 59
SECTION 5: PERFORMANCE FRAMEWORK 60
5.1 Balanced Scorecard Perspectives 60
5.2 Key Performance Indicators 60
5.2.1. Financial Perspective 60
5.2.2 Customer Perspective 62
5.2.3 Internal Process Perspective 64
5.2.4 Learning and Growth Perspective 65
5.2.5 Community Value Perspective 66
SECTION 6: RISK MANAGEMENT AND INTERNAL CONTROLS 70
6.2 Risk Management Process 71
6.2.1 Background 71
6.2.2 Broad Definition 71
6.2.3 Risk Management Process 71
6.3 City Power’s Top 13 Risks 75
SECTION 7: FINANCIALS 79
7.1. Capital Expenditure 79
Continuous Strategy Improvement - Rev 17 – Page 2 of 131
Approved by Board on 6 Aug 2009
7.1.1 Infrastructure & Service Delivery Capital Plan 79
7.1.2 Major Infrastructure Initiatives 93
7.1.3 Sources of Funding 97
7.2. Operational Expenditure 98
7.2.1 Financial Planning Assumptions 98
7.2.2 Income Statement 99
7.2.3 Cash Flow 104
7.2.4 Balance Sheet 106
7.3 Tariff Plan (NERSA and Mayoral approvals are not align, the tariff
may change subject to Mayoral approval) 108
7.3.1 Tariff Assumptions 108
7.3.2 Tariff Objectives 108
7.3.3 Proposed tariff increase 108
7.3.4. Structural changes per rate category 109
SECTION 8: WARD PRIORITIES 113
SECTION 9: HUMAN CAPITAL 121
9.1. Human Capital Plans 121
9.1.1 Human Capital Achievement: Performance Management 121
9.1.2 Employee Productivity 121
9.1.3 Human Capital Salary Costs 122
9.1.4 Other Human Capital Related Costs 122
9.1.5 Human Capital Ratios 123
9.1.6 Human Capital Staffing Levels 123
9.1.7 EE Report 126
9.1.8 Skills Development 127
9.2 BEE 128
9.2.2 Training and Capacity Development 128
9.2.3 Supplier Summit 128
9.2.4 Supplier Audits 128
9.3 HIV and AIDS 129
9.3.1 HIV/Aids Structures 129
9.4.2 Education 129
9.4.3 Monitoring and measuring of performance 129
9.4.4 Case Management 129
SECTION 10 DEPENDENCY MATRIX 130

BUSINESS ACRONYMS
AA – Affirmative Action
AMR – Automated Meter Reader
AMP -Amperes
ASGISA –Accelerated and Shared Growth Initiative
BEE – Black Economic Empowerment
BSC – Balanced Score Card
CAIDI – Customer Average Interruption Duration Index
CAIFI – Customer Average Interruption Frequency Index
CAPEX – Capital Expenditure
CBD – Central Development District
CFL – Compact Fluorescent Light
COJ – City of Johannesburg
DIFR- Disabling Injury Frequency
DME – Department of Mineral and Energy
DSM – Demand Side Management
EDI – Electricity Distribution Industry
EE –Energy Efficiency
EPWP – Expanded Public Works Programme
GAAP – Generally Accepted Accounting Principles
GDS – Growth Development Strategy
GE – Gender Equity
HV- High Voltage
IDP –Integrated Development Plan
IEP – Integrated Energy Planning
ISD - Infrastructure and Services Department
IT – Information Technology
JDA – Johannesburg Development Agency
JMPD – Johannesburg Metro Police Department
JRA – Johannesburg Road Agency
KPI – Key Performance Indicator
KVA- Kilo Volt Ampere
KWH- Kilowatt Hour
LPU – Large Power Users
LV- Low Voltage
MD – Managing Director
MV- Medium Voltage
MVA – Mega Volt Amperes
MFMA- Municipal Finance Management Act
MOE – Municipal Owned Entity
MSA – Municipal Systems Act
NERSA – National Energy Regulator of South Africa
NPR – Network Performance Ratio
OPEX – Operating Expenditure
RACI – Responsible Accountable Consulted and Informed
RDP – Reconstruction and Development Programme
RED – Regional Electricity Distributor
R & D – Research and Development
SAIDI –System Average Interruption Duration Index
SAIFI - System Average Interruption Frequency Index
SBA -Sale of Business Agreement
SCADA – Supervisory Control and Data Acquisition
SDA- Service Delivery Agreement
SHER – Social Health Environmental Responsibility
SHU – Shareholder’s Unit
SPU –Small Power Users
STI – Small Ticket Item

SECTION 1: EXECUTIVE SUMMARY
This document spells out City Power’s expected course of action for the period 2009/2014. It
provides an analysis of the day-to-day operations, the financial and budgetary environment, the
people, inter-governmental initiatives as well as information on collaboration with other sectors.
City Power has been in existence since January 2001, as an electricity distributor. Its mandate is to
purchase, distribute, and sell electricity in the City of Johannesburg, as well as managing the City’s
street and public lights.
The City of Johannesburg has developed a strategic thrust which acts as a central theme of principle
guiding the direction that City Power should follow. This includes the following:
• Maximising access to electricity
• Reducing maintenance backlogs
• Reducing losses
• Infrastructure upgrading
• Implementation of Demand side Management (DSM)
1.1 Highlights and Challenges of the business
During the past financial year, City Power has made significant progress. Some examples of this are:
• Prompt response to the energy efficiency crisis in the country;
• Leading in the implementation of a detailed demand side management programme;
• Exceeding target on a number of performance measures, including payment levels for both key
customers, on bulk outages, query resolution times, Expanded Public Works Programme
(EPWP), employment equity, gender equity, Black Economic Empowerment and Engendered
expenditure;
• 98% of the capital budget was spent on improving and upgrading of the network, and,
• Compliance to the NRS 048 standards and SHER
In order to realise our vision, of being a “World-class electricity distributor”, City Power is striving
to become a customer-focused organisation by incorporating the voice of the customer as part of our
business analysis. This effort will help us ensure that we deliver the right service to our customers in
the most efficient and effective manner. One of the major opportunities for the company to practice
the above has been presented by the 2010 FIFA World cup, to be hosted by South Africa. As we
build on the previous year’s accomplishments, we are continuing to address the following
challenges:
• Funding of infrastructure upgrade and refurbishment;
• Energy supply constrains;
• Increase in the price of primary energy and other resources;
• Expedite research and deployment of renewable energy technologies;
• Skills constraints; and,
• Uncontrollable increase in theft and vandalism

This plan highlights the methodology which City Power will use to ensure continuous performance
improvement in the business and improving service to its customers.
1.2 Structure of the document
Section1 is the Executive Summary.
Section2 provides a detailed description of the company Overview by outlining what the core
business of the company is, the various types and number of customers to whom we provide our
services.
Section3 is the Strategic agenda which provides the company goals, Mayoral priorities, strategic
priorities, as well as the company’s response to the IDP & GDS.
Section 4 discusses the Operational agenda: which provides a progress report on various projects that
the company has embarked on, with special focus on the 2010 FIFA World Cup and the City of
Joburg strategic agenda.
Section 5 is the Departmental Balanced Scorecard, a framework for performance monitoring.
Section 6 gives a detailed description of the methodology used to assess and analyse risks
holistically. The top business risks are listed, along with information on their background, the control
measures in place, and actions that will be followed to mitigate and manage these risks (how they
will be addressed).
Section 7 has the financials and is divided into CAPEX, OPEX and Tariff Plan. The CAPEX section
presents a comprehensive overview of the long-term capital budget and a skeleton of the five-year
capital budget. It also shows what funds are used by the company to acquire or upgrade physical
assets, such as plants and equipment, in order to provide sustainable, affordable, safe and reliable
electricity; and how these funds are deployed. At the end of this subsection, the impact of not
receiving sufficient funds is discussed.
Section 8 gives a profile of the Ward priorities. It provides details of various projects which will be
undertaken per ward enlisting the following: ward number, issues, the corresponding action, who and
when, as well as budget resources
Section 9 provides the analysis of such aspects as employee satisfaction, skills development,
employee productivity, salary costs, staffing, capital outflow and employment equity, together with
the plan which has been developed to address these aspects.
Section 10 provides a table of the Dependency Matrix, which lists the processes or projects that
require support from the other departments within the city of Johannesburg.

SECTION 2: COMPANY OVERVIEW
2.1 Vision, Mission and Mandate
2.1.1 Vision
To be a world-class electricity distributor
2.1.2 Mission
The mission of City Power Johannesburg (Pty) Ltd is to meet the expectations of our customers and
stakeholders by:
• Providing a sustainable, affordable, safe and reliable electricity supply
• Providing prompt and efficient customer services
• Developing and incentivising our employees
• Being the preferred equal opportunity employer
• Undertaking our business in an environmentally acceptable manner
2.1.3 Aspired values
City Power aspires to be:
• Resourceful
• Resilient
• Reliable
• Respectful
Always with Integrity
2.1.4 Business Operations Principles

The company endeavours to operate its business in accordance with the following principles:
• Customer-centric organisation
• Seamless value chain driven organisation
• Maximum technology enablement
• Zero tolerance for poor performance
• Business case driven investment decisions
• One stop service, doing it right the first time
2.1.5. Company Details
Company Name: City Power Johannesburg (Pty) Ltd
Company Registration Number: Reg 2000/030051/07
Physical Address: 40 Heronmere Road, Reuven
Postal Address: PO Box 38766, Booysens, 2016
Phone Number: (+27) 011 490 7000
Fax Number: (+27) 011 490 7590
E-mail: [email protected]
Website: www.citypower.co.za
Customer Contact Centre: JoConnect at (+27) 011 375 5555

2.1.6 Operating History
Following the first democratic elections that took place in 1994, and the local election that followed
in 1995, eleven local authorities were amalgamated to form the Greater Johannesburg Metropolitan
Council. By mid 1997 it became apparent that the new structures were not optimally effective and
the Councils of Greater Johannesburg were facing a severe financial crisis. It was then agreed that a
unified, metropolitan-wide initiative was necessary to focus specifically on the critical problems
facing the city. This led to the inception of the iGoli 2002 plan (iGoli 2002 was essentially a three-
year strategic plan). It involved the structural transformation of Metro functions with the view to
ensuring enhanced and more cost effective service delivery. It achieved this by reducing
fragmentation, eliminating duplication, improving accountability, focussing on human resource
development and improving performance incentives. From an organisational perspective the iGoli
2002 Plan put in place “sensible” structures that delivered at greater levels of efficiency.
The iGoli 2002 Plan envisaged that the City would work through a combination of new political
governance structures, agencies and corporatised entities. A key element of the iGoli 2002 strategy
for service delivery was the establishment of utilities, agencies and corporatised entities now called
the municipal own entities (MOEs). One of the entities established was City Power Johannesburg
(Pty) Ltd, 100% owned by the City of Johannesburg, and established in terms of the Companies Act,
on 1 November 2000.
In line with the establishment of City Power Johannesburg (Pty) Ltd, the Council utilises an
Infrastructure and Services Department (ISD) to oversee the performance and a Shareholder Unit
(SHU) to oversee the governance of the company, as well as to regulate it. In this regard various
agreements in principle were concluded during the establishment of the companies. These included
the Sale of Business Agreement (SBA) and the Service Delivery Agreement (SDA).
The relationship maintained with the Greater Johannesburg Metropolitan Council is one of Service
Authority and Service Provider. City Power Johannesburg (Pty) Ltd is the preferred Service Provider
for the Service Authority, the Council.
2.1.7. Organisational Management and Structure

2.1.7.1 Board of Directors
City Power has a unitary board, which consists of executive and non-executive directors. The Board
is chaired by a non-executive director; Ms Getty Simelane. The Board meets regularly, at least
quarterly, and retains full control over the company. The Board remains accountable to the City of
Johannesburg Metropolitan Municipality (the company’s sole shareholder) and its stakeholders, the
citizens of Johannesburg. A Service Delivery Agreement (SDA), concluded in accordance with the
provisions of the Municipal Systems Act (MSA) governs the company’s relationship with the City of
Johannesburg. The Board provides monthly, quarterly, bi-annual and annual reports on its
performance and service delivery to its parent municipality as prescribed in the SDA, the MFMA and
the MSA. Such reports are submitted within the stipulated timeframes.

Non-executive directors contribute an independent view to matters under consideration and add to
the depth of experience of the Board. The roles of Chairperson and Managing Director of the
company are separated, with responsibilities divided between them. The Chairperson has no
executive functions. Members of the Board have unlimited access to the Company Secretary, who
acts as an advisor to the Board and its committees on matters including compliance with company
rules and procedures, statutory regulations and best corporate practices.
The Board, or any of its members, may, in appropriate circumstances and at the expense of the
company, obtain the advice of independent professionals. A director and peer review as well as a
Board evaluation is undertaken on an annual basis. The Articles of Association provide that the
directors of the company will be elected by the shareholder and appointed by the Board of Directors.
The Managing Director is appointed by the Board.
Board members
The Board currently consisted of six non-executive directors and two executive directors as indicated
in table 1.1 below.
Table 1.1: Board members

Member Portfolio
1 Ms Getty Simelane Chairperson of the Board
2 Mr Silas Zimu (MD)Executive Director
3 Prof. Tshilidzi Marwala Non-Executive Director
4 Ms Joyce Kumbirai Non-Executive Director
5 Adv Klaus Garlipp Non-Executive Director
6 Mr Honey Mateya Non-Executive Director
7 Mr Ghandi Badela Non-Executive Director
8 Ms Doris Dondur Non-Executive Director
9 Dr Yondela Ndema Non-Executive Director
10 Mr Brain Hawksworth Non-Executive Director
Executive directors are regarded as contract employees in terms of the company’s conditions of
service.
Board Sub-Committees and their Members
The following committees have been formed, each of which is chaired by a non-executive director.
• Audit Committee
• Human Resources and Remuneration Committee
• Pricing and Regulatory Committee
• Oversight Committee
• Ad Hoc EDI Working Group

Audit Committee Members
The Audit Committee consists of the following directors:
Table 1.2: Audit Committee members

Member Portfolio
1 Ms Doris Dondur Chairperson of the Audit Committee
3 Mr Brian Hawksworh Non-Executive Director
4 Mr Haroun Moolla Independent Member of the Audit Committee
5 Mr Waldo Hattingh Independent Member of the Audit Committee
6 Mr Harry Molokomme Independent Member of the Audit Committee
7 Mr Silas Zimu In attendance
The role of the Audit Committee is to assist the Board by performing an objective and independent
review of the functioning of the company’s finance, accounting and risk control mechanisms. It
exercises its functions through close liaison and communication with senior management and the
internal and external auditors. The Audit Committee met once during the period under review.
The Audit Committee operates in accordance with a written charter authorised by the Board, and
provides assistance to the Board with regards to:
• Ensuring compliance with applicable legislation and the requirements of regulatory
authorities;
• Matters relating to financial accounting, accounting policies, reporting and disclosures;
• Activities, scope, adequacy and effectiveness of the internal audit function and audit plans;
• Reviewing and recommending the approval of external audit plans, findings, reports and
fees;
• Reviewing and recommending the approval of strategic risks and mitigating strategies;
• Compliance with the Code of Corporate Practices and Conduct; and
• Compliance with the Code of Ethics.
HR & Remuneration Committee Members
The Human Resources and Remuneration Committee consists of the following directors:
Table 1.3: Human Resources and Remuneration Committee members

Member Portfolio
1 Mr Honey Mateya Chairperson of the Committee
2 Ms Getty Simelane Non-Executive Director
3 Ms Joyce Kumbirai Non-Executive Director
6 Mr Silas Zimu Executive Director

The Human Resources and Remuneration Committee advises the Board on remuneration policies,
remuneration packages and other terms of employment for all directors and senior management. Its
specific terms of reference also include recommendations to the Board on matters relating to general
staff policy remuneration, profit bonuses, executive remuneration, director remuneration and fees
and service contracts.
Pricing & Regulatory Committee Members
The Pricing and Regulatory Committee consists of the following directors:
Table 1.4: Pricing and Regulatory Committee members

Member Portfolio
1 Joyce Kumbirai Chairperson of the Committee
2 Prof. T Marwala Non-Executive Director
3 Mr Honey Mateya Non-Executive Director
The Pricing and Regulatory Committee advises the Board on strategic direction on electricity pricing
strategies and policies, addresses regulatory changes in the Electricity Supply Industry that affects
the company, ensures that the company complies with the regulatory requirements on tariffs,
recommends structural tariffs changes to the National Electricity Regulator, and ensures compliance
with NRS 047 (Quality of Service) and NRS 048 (Quality of Supply) regulations.
Board Oversight Committee Members
The Oversight Committee consists of the following directors:
Table 1.5: Oversight Committee members

Member Portfolio
1 Adv Klaus Garlipp Chairperson of the Committee
3 Prof. T Marwala Non-Executive Director
The Oversight Committee advises the Board on the oversight responsibilities set out in the supply
chain management policy and procedures, which are in line with the Municipal Finance Management
Act regulations on supply chain management.
• The Oversight Committee operates in accordance with a mandate authorised by the Board,
and provides assistance to the Board with regards to: Maintaining oversight over the
implementation of the supply chain management policies as contained in the supply chain
management manual;
• Monitoring and reporting on the implementation of the supply chain management policy and
procedures and the performance of supply chain management;
• Assessing deviations and exceptions from policy and procedures;
• Advising on the multi-year business plan and annual budget plan;
• Monitoring and reporting on company spend against the approved budget and business plan;
• Assessing the achievements of output on projects.
The Oversight Committee is informed of all emergency procurement and considers the following;
• Approving any spending outside the approved plans; and
• Pro-active approval of deviations/amendments from policy.
(Ad Hoc) Edi Working Group Members
The Ad Hoc EDI Working Group consists of the following directors:
Table 1.6: EDI Working Group

Member Portfolio
1 Prof. T Marwala Chairperson of the Committee
The Ad Hoc EDI Working Group is an ad hoc joint executive and Board working group formed to
consider and advise the company of EDI restructuring developments and to prepare City Power for
transition into the RED.
(Ad Hoc) Turnaround Strategy Working Group Members
The Ad Hoc Turnaround Strategy Working Group consists of the following directors:
Table 1.7: Turnaround Strategy Working Group

Member Portfolio
1 Mr Honey Mateya Chairperson of the Committee
2 Mr Brian Hawksworth Non-Executive Director
The Turnaround Strategy Working Group is an interim working group formed to work with
management on the development of a turnaround strategy for the company.

2.2 Description of day-to-day operations
City Power Johannesburg (Pty) Ltd is the Electricity Distribution Service Provider to the Service
Authority, Johannesburg Council. The core competency of the business is to purchase, distribute and
sell electricity within its geographical footprint of business. The National Energy Regulator of South
Africa (NERSA) granted City Power Johannesburg (Pty) Ltd a licence to trade on 19 December
2001. The City of Johannesburg is the sole Shareowner. The Council, by means of a Service
Delivery Agreement, regulates the service in respect of the following: financial issues (such as tariffs
and capital expenditure), human resource issues (such as skills development), delivery targets
(maintenance of assets and addressing assets), and standards of customer care.
City Power Johannesburg (Pty) Ltd is accountable to provide network services to all its customers.
Network services include:
• the purchasing and distribution and sale of electricity
• constructing networks
• connecting customers
• repair and maintenance of networks
• installation and maintenance of public lighting

The City of Johannesburg provides retail customer services for all domestic customers, i.e.
processing of applications, customer queries, customer complaints, customer accounts and revenue
management. City Power Johannesburg (Pty) Ltd provides retail customer services for the key
customers, top customers and pre-paid customers only.
2.3 Quantitative Indicators
The business model designed to execute the company mission is given in Figure 2.1 below. The
subsequent paragraphs provide high level information on the characteristics/dimensions of each
business model element.
Figure 2.1 Business Model
2.3.1 Provide Network Infrastructure

City Power Johannesburg (Pty) Ltd projected network infrastructure status is given in Table 2.1
Table 2.1: Network Infrastructure

Measure Indicator Unit 07/08 08/09 09/10
Plan Plan Plan
Eskom Supply Points No 39 39 42
High voltage Substations (Bulk Intake No 5 5 5
Points)
Medium voltage Substations (Major No 82 82 82
Measure Indicator Unit 07/08 08/09 09/10
Plan Plan Plan
Substations) excluding Bulk Intake
Substations
Low voltage Substations (Devices) No 14252 14764 15276
High voltage Overhead Transmission km 811 811 811
Lines > 44kV)
High voltage Transmission Cables > km 93.68 93.68 93.68
44kV
Medium voltage Overhead Lines km 11.2 11.2 11.2
>20.5kV and < 44kV
Medium voltage Cables >20.5kV and km 123.3 123.3 123.3
<44kV
Ripple Relays Installed No. 183 000 232 000 281 000
Ripple Relays In-service No. 92 000 167 000 242 000
2.3.2 Distribute Electricity
City Power Johannesburg (Pty) Ltd operates six independent networks, representative of the former
Municipal Transmission Systems. Figure 2.2 depicts the independent systems:
Figure 2.2: City Power Johannesburg (Pty) Ltd Networks
Figure 2.3 below gives the schematic representation of City Power Johannesburg (Pty) Ltd’s
Johannesburg transmission system and bulk power nodes:

Figure 2.3 City Power Johannesburg (Pty) Ltd’s Johannesburg Transmission and Bulk Power Nodes
DELTA
2*250MVA
88kV Transmission Circuits
KELVIN PS
ESKOM275kV 600MW
Firmcapacity Rosebank, Ridge,
250 MVA Fort,Parkhurst and MD 200 MVA
MD 419 MVA Roosevelt Park
Marlboro Cydna, Gresswold,
Eskom Observatory, Bellevue,
Orchards, Alexandra Proposed
and Westfield. Sebenza 275kV
ESKOM275kV Alexandra
Firmcapacity Intake from
township
Eskom
750 MVA
MD 512 MVA
Braamfontein, John Ware,
Bree, Mayfair, Selby, and
Central (20kV).
Eldorado, Nancefield, Pritchard, Siemert, Central,

Nirvana, Hursthill, Robertsham, Mondeor,
Industria, Eikenhof, Mulbarton, Moffat, Cleveland,
FORDSBURG
and Soweto. Kazerne, Wemmer and Van
4*250MVA PROSPECT Beek.
4*250MVA
ORLANDO 88kV
SWITCHYARD ESKOM 275kV
Proposed Firmcapacity
Proposed Mondeor 88kV 750 MVA
Quattro 275kV Bus MD 869 MVA
Eskom Intake Lenasia
from
Eskom
This simplified operational diagram depicts the Johannesburg portion of City Power’s transmission
network. Bulk power is received from Eskom at three bulk intake points (Prospect, Fordsburg and
Delta) at a voltage of 275kV. At these stations the voltage is transformed down to 88kV for onward
transmission via City Power’s transmission grid to over 30 major step-down substations.
In addition, the 88kV transmission network is supplemented by a power input from the
independently operated Kelvin Power Station.
There are also two smaller substations which receive an in-feed directly from the Eskom networks,
which supply a small number of City Power customers.

2.3.3. Network Restoration
Table 2.2 below gives the network restoration times for the past three financial years. Restoration
times have improved over the years. The actual restoration times for faults in the 3.5, 7.5 and 24hrs
categories are better than specified in NRS 047; however, the restoration times for faults in the 1.5
hours category do not meet the NRS 047 target. Therefore, on average, City Power’s performance is
better than the targets set.
Table 2.2 Restoration Times

2005/6 2006/7 2007/8 08/09 09/10
Indicator Unit Actual Actual Actual Plan Plan
Restoration % (Supply restored within
1,5 hours) % 26.32 24.73 25.86% 30% 30%
3,5 hours) % 66.97 64.56 66.23% 60% 60%
7,5 hours) % 86.97 91.18 91.20% 90% 90%
24 hours) % 95.53 98.68 98.84% 98% 98%
Based on the restoration times of 1.5, 3.5, 7.5 and 24 hours, the plan is to meet all four restoration
times KPI’s by 2009.
2.3.4 Suppliers of Materials

City Power’s Supply Chain strategy is configured using a stock classification model that places
importance on the variables of network criticality, cost and market availability. All materials
requirements are intended to be sourced through supplier agreements based on strategic sourcing
principles, with strategic long term agreements focusing on equipment that is of particular
importance to the business. Supply Chain Management has implemented a number of contracts based
on strategic sourcing principles. The commodity groups, to which this process has been applied are
Switchgear, Transformers, Cable, Cable Accessories and STI’s (Small Ticket Items).
In materials management stock items are classified as “A”, “B” or “C”. “A” materials are the most
“important” items. This is determined by factors such as usage value, lead time, quantity used, the
consequences of being out of stock, etc. “C” items are the least important items. These are typically
items where a stock out is not critical to operations and/or they can be obtained quickly and easily.
The materials spend profile is significantly skewed with a large proportion of expenditure directed to
more strategic items classified as “A” items. Supplier expenditure on materials likewise features this
profile as illustrated in the table below.

Table 2.3: Top 15 Suppliers of stock materials by value 2007/08

Rank Vendor Value
1 CBI ELECTRIC : AFRICAN CABLES R 280,929,128.88
2 DESTA POWER MATLA (PTY) LTD R 38,867,096.19
3 ELECTRO INDUCTIVE INDUSTRIES R 28,992,981.29
4 LANDIS + GYR R 20,232,700.00
5 PCB POWER TRANSFORMERS R 11,092,763.00
6 ALSTOM DISTRIBUTION TRANSFORMERS R 10,108,651.52
7 RAYTECH ENERGY - A DIVISION OF R 9,897,976.97
8 ALSTOM SWITCHGEAR R 9,587,525.47
9 BEKA (PTY) LTD R 9,245,008.50
10 ABB POWER TECHNOLOGY MEDIUM VOLTAGE R 8,561,603.00
11 HAWKER SIDDELEY TRANSFORMERS R 7,601,939.00
12 INDUSTRIAL POLES & MASTS (PTY) LTD R 6,825,489.10
13 MEDUPE DISTRIBUTORS R 6,758,967.88
14 TANK INDUSTRIES (PTY) LTD R 6,724,218.71
15 STEELCOR POWER R 5,098,720.00
Rest R 55,258,341.06
Grand Total R 515,783,110.57
2.3.5 Quality of key customer Relations
2.3.5.1 Customer Base
City Power’s customer base as at June 2008 was 300,013. Initiatives are currently underway to
convert conventionally metered (‘credit’) domestic customers to prepaid metering. This,
compounded with the unprecedented growth in the domestic market segment, will lead to a large
increase in the number of prepaid customers. A breakdown per customer segment is given in Graph
2.4 below:

Graph 2.4.Customer Base
The City of Johannesburg provides retail customer services for the domestic customer
segment whilst City Power Johannesburg (Pty) Ltd provides retail customer services for
the remaining segments. Graph 2.5 below depicts the customer base distribution:
Graph 2.5: Customer Base Distribution
Key Customers Large Power Users

0.05% 1.45%
Business Users
Agricultural 0.01% 4.17%
Prepaid Customers
31.62%
Conversional
Customers 62.70%

The Top 20 customers, based on revenue in the 2007/08 financial year are given in Table 2.6 below:
Table 2.6: Top 20 Customers

Contract
No.: Account Customer Name Annual Amount (R'000)
1 220063623 Rand Water 69,707,875

2 220063905 Standard Bank 20,822,461
3 220078683 SABC 19,308,998
4 220062010 Carlton Centre 16,121,773
5 220070589 Pareto Limited (Cresta) 15,874,330
6 220068999 Johannesburg Hospital 15,412,281
7 220055870 Haggie Son & Love 14,040,614
8 220007516 Westgate Shopping Mall 12,764,993
9 221005656 Ekurhuleni-Phomolong Viola 12,669,804
10 220063824 Bank City Facilities 12,297,843
11 220028474 Chris Hani Baragwaneth Hospital 11,922,156
12 221042489 Vodacom 11,117,911
13 220076252 Gold Star Yeast (Pty) Ltd 10,662,133
14 220026639 R.M.S Southgate Management Co. 9,273,971
15 220058278 Rycklof Beleggings EDMS Bpk 6,994,235
16 220021060 ABSA 6,622,762
17 220028192 Akani Egoli (Pty) Ltd 6,388,260
18 220097750 Killarney Mall 5,910,523
19 220021101 ABSA Prop Gauteng West 5,715,258
20 220028273 DE Beers Group Services (Pty) Ltd 3,536,150
287,164,331
The Manage Customer Interface Value Chain is aimed at fostering a superior customer experience at
the point of contact until customers’ needs are met. The successful implementation of this value
chain is not only fully dependent on the other four value chains, but also on the proper
implementation of outbound services, such as customer education and communication.
The following are the main challenges:
City Power Johannesburg (Pty) Ltd is not the only place where customers can log their
queries, and does not exercise control on how customers are handled at other customer
interface points. That makes it difficult to provide acceptable customer service to all
customers at all customer interface points.
• The interface between the PEGASUS system and e-Respond is not optimally used.
• No full CRM solution - Pegasus system is only a call-take system
• Non –adherence to the KPI ‘s as stipulated in the other four key value chains
• Limited Call Centre service offerings

2.3.5.2 Call Take
Table 2.7 below provides information on customer contacts made to the company’s call centre and
the call centre’s performance:
Table 2.7: Company Call Centre Performance January 2008 – September 2008
Jan Feb Mar Apr May June Jul Aug Sep
2008 Unit 08 08 08 08 08 08 08 08 08
Total Calls 9593 5180 10980 9992 65883 10709 1212 6805 6055
Offered No 9 6 8 0 6 34 6 3
Total Calls 6468 4381 56906 6761 56252 60092 7672 6136 5862
Answered No 1 1 0 1 5 5
Answer Rate % 67% 85% 52% 68% 85% 56% 63% 90% 97%
Calls Answered 52% 80% 73% 61% 77% 58% 66% 79% 90%
in 30sec %
Lost Call Rate % 33% 15% 48% 33% 15% 44% 37% 10% 3%
Average Wait 01:32 37 1:03 1:20 :39 01:49 01:20 00:18 00:09
Time of Answered
Calls Sec
Max Wait Time of 33:57 34:26 21:25 30:43 17:32 27:16 24:11 17:52 10:29
Answered Calls Min
Average Talk 02:09 02:16 2:05 01:55 01:56 01:57 01:58 02:14 02:17
Time Min
Calls per Agent No 2131 1295 1387 2253 1562 1820 1826 1427 1363
There is a fluctuating trend of customer contact due to seasonality. The trend is highly influenced
because the majority of customer contacts are power related. High increase in call volumes are due to
load shedding.
2.3.5.3 Network Related Contacts
There has been an increase in network-related complaints. A significant portion of these calls can be
attributed to repeated calls in the event of prolonged outages and load shedding.
Typical network call types that the company receives are: power loss, earth leakage, damaged
cables, illegal connections, sparks on poles, trees touching lines, shocks on taps, voltage fluctuation,
lines down, phases out, street light calls, prepaid queries regarding units or no power, vandalism,
size of supply and quality of supply, meters burnt out, no hot water, stolen overhead lines and
temporary supply queries.
2.3.5.4 Non-Network Related Contacts
There has been a steady increase in account related queries. These queries are caused mostly by
estimated accounts and customers applying for clearance certificates.
Typical types of calls include: final readings, reprint of accounts, balance enquiries, final accounts,
payments not credited, adjustments, account too high, account not received, information requests,
change of details, reconnections, disconnection requests, meter boxes not installed, meters not read,
meters not turning, as well as tariff queries.

2.3.5.5 Quality Customer Information
The utilisation of multiple systems that are not integrated poses a challenge in the quest to providing
quality information. The company does not have one view of a customer, or a history of the
customer, as the information resides in different systems. Data cleanup initiatives will result in the
refinement of customer data.
2.3.5.6 Provide Services
Table 2.8 below shows the City Power Johannesburg (Pty) Ltd network of service outlets:
Table 2.8: Network of Service Outlets Jul’07 to June’08

Service Range Area Walk-in Service Centres
Range: Randburg Hursthill Reuven Lenasia Midrand Alexandra Roodepoort

and
Siemert
Quotations to
Customers 496 1803 1073 366 993 282 1235
Providing
Supply 496 1141 1047 322 847 253 1050
Account
Queries 6254 9551 18704 4402 1866 12903 7861
Meter Reading
Queries 5949 4260 8869 3165 269 6152 6398
Complaints 7834 8439 19172 7311 2905 22793 9316
Enquiries 8 270 816 8 424 59 79
Requests
Received 68 1041 2215 2851 2562 461 1916
Communication
Sessions 230 35 308 65 38 34 17
Payments
handled 0 123 13953 650 4 19 81
2.4. Support Processes
• The following support processes are also deployed in the company:

• Providing corporate services
• Providing financial and procurement services
• Providing public relations services
• Providing legal services
• Providing internal audit services
• Providing strategy development and execution management services

SECTION 3: STRATEGIC AGENDA
3.1 Strategic Agenda Priorities
The strategic agenda of City Power Johannesburg (Pty) Ltd is:
“To enhance the value proposition of the company to become the model for and leader of future
developments in the electricity distribution field.”
3.2 Strategy Management Processes
The company has successfully deployed the strategy focused business planning methodology by
developing and implementing a strategy management value chain, depicted below in Figure 3.1.
Furthermore, it has succeeded in deploying a strategy focused governance structure to facilitate the
development, execution and performance monitoring of the company strategy. A performance scoring
appraisal is currently under review in an endeavour to improve and align it to the CoJ performance
scoring system.
Figure 3.1: Strategy Management Value Chain
3.4 Strategic Goals
In pursuance of its strategic intent City Power Johannesburg (Pty) Ltd has identified its strategic
goals as given in Table 3.1:
Table 3.1: Company Strategic Goals

Perspective Goal
CoJ Stakeholder Sustain COJ stakeholder satisfaction
Perspective
Community Perspective Sustain community satisfaction
Financial Perspective Increase the profit base without compromising the viability of the
business
Customer Perspective Sustain customer satisfaction
Internal Processes Align processes and practices to support the vision and enhance our
value proposition
Learning and Growth Maximise employee productivity and provide enabling information
systems
3.5 Mayoral Priorities
City Power is a municipal entity and thus has to align itself with the mayoral priorities of the City of
Johannesburg. In Johannesburg there are six mayoral priorities as depicted in table 3.2:
Table 3.2: Mayoral Priorities

Mayoral Priority City Power’s response with regards to outcome
Economic Growth and Job Align supply and demand: BEE, Engendered spend, EPWP,
Creation Free Basic Electricity, Providing product and price range, etc
Health and Community Compliance to basic services delivery programme
Development
Housing and Services Adherence to the housing requirements, compliance to service
reliability programme
Safe, Clean and Green City Compliance to SHER, address the demand side management
Well Governed and Managed Compliance to legislation, regulatory and governance policies
City
HIV/AIDS Compliance to the HIV/AIDS programme
3.6 Company Strategic Priorities
After due consideration, based on past performance and future challenges, the company determined the
following three strategic priorities, in order of priority, to ensure sustained business performance:
Figure 3.1 below shows the company’s strategic priorities

• Prioritize social
SERVICE transformation (public
lighting/electrification)
• Seek more revenue
• Loss reduction
WORLD CLASS
ELECTRICITY
DISTRIBUTOR
PEOPLE INFRASTRUCTURE
• Management style • Replacement & upgrades

• Improve climate • Expand network
• Right people in right places • Maintenance
• Training in key areas • Outsourcing
• Demand-side management
• Alternative energy sources
Strategic Issues
The following are the strategic issues that the company has to take into account during 2008/09 and
2009/10
• 2010 FIFA World Cup
• Regional Electricity Distributors
• Phakama
• Managing new growth
o Regulation for new developments
o ASGISA
o Regulation for existing homes
• Improve service delivery/maximising profit
• Reduce outages and improve restoration
• Energy crisis
o Reduce consumption by 10%
o Energy generation capacity for Joburg
• Theft and vandalism
• Improving the working environment
• Eskom tariff changes
o Create scenarios
Top 10 Priorities for 08/09 and 09/10

• One team/structure
• Strategic clarity at all levels
• Skills
o Analyse vacant posts & fill where necessary
o Improve retention of high performers
o Training & development
• Asset management
o Clear maintenance plan
o Replace some contractors with full-time staff (budget needed)
• Funding
• Develop aggressive anti-theft strategy
• Effective performance management
o Revenue/gross margins
o Clean audit
o 30-day reviews
o Deal with non-performance
• Value chains
o Clarify roles and operational processes
o Corporate Services
o IT
o Improve procurement
• Improve communication (internal & external)
• Improve call centre performance
Five year strategy, IDP and delivery agenda
The City of Johannesburg has a Growth and Development Strategy (GDS), which is a 20 year plan for
the city. The GDS is made up of sectors, and is governed by six developmental principles. The six
developmental principles are:
• Proactive absorption of the poor
• Balanced and shared growth
• Facilitated social mobility
• Settlement restructuring
• Sustainability & environmental justice
• Creative governance solutions
Table 3.3 Developmental Principles
GDS City Power’s response 08/09 plan 09/10 Plan
Principles
Proactive Basic Service: 3000 planned, final target TBD 3000 planned, final target TBD
absorption of electrification and public and is dependant on housing and and is dependant on housing and
the poor lighting funding funding
Public Lighting: Public Lighting:
• 63 of the formal areas 64 of the formal areas
• 14% of the informal areas 16% of the informal areas
Effective roll-out of Planned Upgrade and Planned Upgrade and
infrastructure Refurbishment: Refurbishment:

Principles
programmes Bulk Bulk
Distribution Distribution
Implement social Roll out of prepaid meters Roll out of prepaid meters
package in multi- Provide FBE Provide FBE
dwelling households, Dependant on housing and Dependant on housing and funding
particularly in residential funding
flats and inner city
buildings
Balanced & Network upgrading Planned Upgrade & Planned Upgrade & Refurbishment
shared growth programme /Asset Refurbishment on both Bulk and on both Bulk and Distribution
refurbishment and Distribution CAIDI
maintenance programme; CAIDI CAIFI
CAIFI SAIDI
Implement infrastructure SAIDI SAIFI
maintenance SAIFI The planned/unplanned ratio to
programmes to improve The planned/unplanned ratio to 75:25
efficiencies and utility 75:25 Planned R&M Cost:
costs Planned R&M Cost: R128m
Facilitated Implement basic Electrification: 3000 dependant Electrification: 3000 dependant on

social infrastructure on housing and funding housing and funding
mobility programmes to
support/facilitate housing
delivery
programmes/strategy
Develop, implement and Tariff plan and implementation Tariff plan and implementation
review tariff policies that
support developmental
state objectives
Support female and EPWP: EPWP:
youth business Permanent: 0 (CP contracts are Permanent: 0 (CP contracts are 3rs
development 3rs as per MFMA) as per MFMA)
programmes with Temporary: 2600 Temporary: 2600
Community BEE spent: 74% BEE spent: 75%
Development Engendered spent: 22% Engendered spent: 23%
Settlement Support the new strategy Electrification: 3000 dependant Electrification: 3000 dependant on
restructuring to formalise informal on housing and funding housing and funding
settlements
Sustainability Demand side Identify and implement DSM Identify and implement DSM
and management programme; projects depending on projects depending on availability
environmental availability of funds of funds
justice
Infrastructure Turbines reinstated subject to Turbines reinstated subject to
modernisation funding funding
programme; AMR roll out AMR roll out

Principles
Solar light and solar water Solar lighting and solar water
heating heating
DSM roll out DSM roll out
Network Protection Technology Network Protection Technology
Implementation of prepaid Implementation of prepaid
Resource conservation Investigation of energy usage Investigation of energy usage
programme patterns, including the Inner patterns, including the Inner City;
City; Investigation of the relationship
Investigation of the relationship between usage per capita and
between usage per capita and usage per consumer unit;
usage per consumer unit; Identifying areas where a revised
Identifying areas where a revised approach is necessary (e.g. Tariff
approach is necessary (e.g. Tariff model to suite specific areas); and
model to suite specific areas); Recommendations for Tariff
and adjustments for 2009/10 will be
Recommendations for Tariff prepared.
adjustments for 2008/09 will be
prepared.
Implement education and Customer Education forums Customer Education forums
awareness programmes Key customer: 1 Key customer: 1
in energy LPU: 10 LPU: 10
Domestic: 84 Domestic: 84
Creative Proactive community Customer Education forums Customer Education forums

governance engagement through on- Key customer: 1 Key customer: 1
solutions site inspections – LPU: 10 LPU: 10
improved turnaround Domestic: 84 Domestic: 84
times
The GDS is translated into the Integrated Development Plan (IDP). City Power influences the GDS’s
many sectors and principles, but most of it’s influence is on the infrastructure sector. The company
priorities will be in line with the GDS, IDP and the strategic framework of the shareholder. The table,
3.4 below, shows how the City Power’s strategic agenda is in line with the GDS:
Table 3.4: City Power’s strategic agenda and GDS

Long-term Long-term 5-year strategic Delivery agenda for Delivery agenda for
Goals Strategic Objectives 2008/09 2009/10
Interventions
1. Extend a Eliminate all Distribute 3000 dependant on 3000 planned, final
differentiated backlogs electricity to at housing and funding target TBD and is
package of In access to least 95% of dependant on housing
service that is basic services formalised and funding
fit for purpose, households
affordable and Provide street The target for 08/09 The target for 08/09 is
reliable, in lighting to 95% of is 1% which means it 1%, this means it will be
accordance formal areas in will be moving from moving from 62% to
with national Johannesburg but 61% to 62% 63% cumulative and is
policy City Power will cumulative. This dependant on funding.
Interventions
commitments only achieve 65% means the total This means the total
and an agreed because of number of public number of public light
local definition continued lights will be 182000 will be 186000
of appropriate budgetary
levels of constraints
service Provide street The target is 13% in The target is 2% in
lighting to 60% of targeted high crime targeted areas, this
informal areas means it will be moving
settlements from 13 to 15%
cumulative and is
dependant on funding.
Increase allocation Provide households Provide households that
of free basic that consume up to consume up to 500kWh
electricity to poor 500kWh with FBE. with FBE
households and
those with special
needs
2. Extension Within a Reduce losses by 11.9% total losses. 11.4% total losses
and competitive 3% to 1%
maintenance of industry Reduce electricity Implement and Implement and improve
reliable and environment, outages by 50% by improve on the asset on the asset maintenance
competitively contribute to year 2010 (bulk, maintenance management strategy
priced services meeting the medium and low management strategy CP to reduce bulk
required by management voltage) but City CP to reduce bulk outages to 75
commercial and needs of the Power will only outages to 80 and MV outages to 1000.
institutional city achieve 30% and MV outages to Implement infrastructure
consumers because of the 1100. The refurbishment
Budgetary planned/unplanned programmes
constraints ratio to 75:25; To be CAIDI
experienced in able to reduce CAIFI
07/08 electricity outages by SAIDI
30% in 2010, CP and SAIFI
future energy
distribution and The planned/unplanned
demand requirement ratio to 75:25;
will be evaluated and
a strategy developed
to secure supply.
This will also include
examining supply
capacity from
various supply
points.
Within the Reduction on Investigation of Investigation of energy
framework of energy usage/ energy usage patterns usage patterns in low-
the RED meet Improve energy in low-income income residential areas,
the electricity efficiency (ISD) residential areas, including the Inner City;
Interventions
needs of all including the Inner Investigation of the
commercial and City; relationship between
bulk electricity Investigation of the usage per capita and
users in the city relationship between usage per consumer unit;
usage per capita and Identifying areas where a
Through usage per consumer revised approach is
efficiency unit; necessary (e.g. Tariff
improvements, Identifying areas model to suite specific
reduce the cost where a revised areas); and
per capita approach is Recommendations for
operating necessary (e.g. Tariff Tariff adjustments for
expenditure for model to suite 2009/10 will be
running and specific areas); and prepared.
maintaining all Recommendations
service for Tariff
networks adjustments for
2008/09 will be
prepared.
3. Service Ensure Reduce illegal Implement a Implement a

delivery is integrated electricity comprehensive comprehensive strategy
secured through design and connections strategy on the on the reduction of
well designed, maintenance reduction of illegal illegal connections
well-integrated planning for all connections subject subject to funding
and well- infrastructure to funding availability. This
maintained with a view to availability. This includes:
Generation manageable includes: • Continued customer
/supply, recurrent costs • Continued education
processing and and extended customer programmes in
distribution life of service education targeted areas;
networks networks programmes in • Working with JMPD
targeted areas; to remove illegal
• Working with connections
JMPD to remove *Continuous roll-out
illegal of protective
connections structures in order to
Continuous roll- reduce tampering
out of protective with conventional
structures in meters and street
order to reduce light poles;
tampering with • Promote alignment
conventional with the City’s debt
meters and street write-off and
light poles; indigence support
• Promote programmes;
alignment with • Continue installation
the City’s debt of prepayment meters
Interventions
write-off and
indigence support
programmes;
• Continue
installation of
prepayment
meters
4. Leadership in Ensure Implement at least Turbines reinstated Turbines reinstated

sponsoring and investments to five innovative new subject to funding subject to funding
adopting extend the technologies in Solar heating, Solar heating, lighting
innovative , yet service life of service delivery lighting and other and other technologies
locally relevant infrastructure technologies
technologies are within cost Solar Water heating Solar Water heating
and delivery effective Roll out AMR/Smart Roll out AMR/ Smart
capabilities that thresholds and Metering metering
enable new technical DSM/EE DSM/EE
service tolerances Roll out CFL Roll out CFL
offerings and Network Automation Network Automation
ongoing Network Protection Network Protection
efficiency Technology Technology
improvement Contribute to Develop and Development and Development and
across all Research and implement implementation of a implementation of a
service areas industry comprehensive demand side energy demand side energy
development by demand side management management programme,
sponsoring and management programme. in conjunction with CP.
where programmes for By–law support for Enforce by–law for
appropriate energy installation of ripple installation of ripple
adopting new relays in hot water relays in hot water
technologies geysers in new geysers in new
that enable developments. developments.
service Environmental Environmental
efficiency and Management Unit Management Unit will
quality will continue to continue to address the
improvements, address the conservation awareness
especially those conservation program in the 08/09
that are awareness program financial year.
relevant to in the 07/08 financial
developing year.
world/city
contexts

Interventions
5. Maintain a Maintain and Support the Assist in the Assist in the
regime of improve service establishment of establishment of establishment of RED
responsible delivery the RED RED
service delivery efficiency
regulation and levels through
stakeholder progressive and
interaction continuous
improvement

SECTION 4: OPERATIONS AGENDA
4.1. Service Delivery
4.1.1. Key Operations and Financial Impact

The Strategic priority objectives are:
• Electrification
• Public lighting
• Reduction of losses
• Reduction of outages
• Demand side management programme
• Inner-city rejuvenation
• 2010 FIFA World Cup
• EPWP
• Revenue Maximization
Electrification
City Power has electrified over 59 000 previously-disadvantaged dwellings over the past five years.
Graph 4.1 below indicates the number of connections achieved annually from 2002/3 to 2007/8
financial years.
Graph 4.1: Electrification Programme
Electrification Programme
70000
59076
No. of Connections
60000
50000
40000
30000
20000 13606
10350 11464
8929 9057
10000 5670
2004/05
2005/06
2006/07
2007/08
Total
2002/03
2003/04
Financial Years

Table 4.1 below shows the areas that have been electrified:
Project Name Number of Political

Stands Region
Electrification of Klipfontein View 336 Region E

Electrification of Lombardy East (River Park) 454 Region E
Electrification of Braleyview Ext. 14 & 16 102 Region E
Electrification of Matholesville 705 Region G
Electrification of Tshepisong Proper 6000 Region D
Electrification of Vlakfontein Proper 1600 Region G
Electrification of Vlakfontein Extension 4500 Region G
Replacement of metering system at Tsutsumane 1800 Region E

Normalisation of Lawley Proper 1553 Region G
Electrification of additional stands within City Power area of 400 All Regions
supply
Electrification of Far East Bank Ext.8 200 Region E
Electrification of Golden Triangle 7000 Region D

Alexandra Normalisation Phase 1 and 2 11000 Region E
Electrification of Infills in Alexandra area of Normalisation 400 Region E
Replacement of Metering system at Mayibuye 2500 Region E
Replacement of metering system in Far East Bank 2000 Region E
Electrification of Tshepisong East 1054 Region D
Normalisation of Alexandra Phase 3 5000 Region E
Electrification of Leratong Village 540 Region C
Electrification of Ernadale Ext.8 70 Region G
Total 47214
These programmes have positively contributed towards poverty alleviation, as the following
have emerged in the townships:
• Establishment of “Spaza” shops
• Back yard mechanics
• Informal restaurants
• Employment of local community during project execution (EPWP)
• Community Phones (Cell C, Vodacom and MTN); and
• Improved living standards

Current projects
Table 4.2 illustrates the townships that have been proclaimed recently, where the electrification process
is currently underway. Though the majority of these projects are at the construction stage, however,
others are still at the planning stage.
Table 4.2: Electrification projects to be completed

Project Name Number of Stands Political Region
Electrification of Far East Bank Ext.7 1700 Region E

Electrification of Tshepisong West (Ebumnandini) 3000 Region C
Electrification of Lawley station 7775 Region G
Electrification of Pennyville (Zamimpilo) 2800 Region B
Electrification of Kliptown RDP houses Phase 1 1221 Region G
Electrification of Clermont (Kathrada) 500 Region B
Lehae Village Phase 1 2500 Region G
Alexandra Normalisation (Phase 4.1) 8500 Region E
Total 27996
Future Plans
Table 4.3 shows the projects that have been identified as part the electrification master plan, which is
derived from the housing plan. It is envisaged that the following townships will be proclaimed and
developed in the near future.
Table 4.3 Projects included in the master plan

Project Name Number of Stands Political Region
Electrification of Lehae Phase 2 2500 Region G
Electrification of Mountain View 5000 Region G
Alexandra Far East Bank Ext.10 900 Region E
Electrification of K206 (Alexandra) 9000 Region E
Electrification of Sol Platjies Phase 1 2500 Region C
Electrification of Bushkoppies 1500 Region G
Electrification of Motswaledi (Bara-Link) Phase 1 3500 Region D
Electrification of Kapok 2000 Region G
Normalisation of Alexandra Proper (Phase 4.2) 52000 Region E
Electrification of Doornkop 22000 Region D
Electrification of Fleurhof ext 2&3 6524 Region D
Total 197824

Electrification specification
City Power has improved its electrification specification in order to cater for proper revenue
collection, make provision for public lighting infrastructure, network protection and future
upgrades by providing the following:
• Split Prepaid metering

• Street Lighting
• Concrete Poles
• Auto Reclosers
• Path Finders
• 60Amp breakers
• Underground MV bulk infrastructure
Due to the above specification, the cost per connection has increased to an average of R5600 per stand.
Typical electrification layout
Bulk Infrastructure
The majority of the above mentioned townships are located on the outskirts of Johannesburg, far from
serviced areas. Their locality has posed a large challenge in terms of bulk infrastructure availability.
Electrification of Lawley Bulk Infrastructure
The scope of the bulk infrastructure is to design, supply, install, commission and hand over a:
• 20MVA transformer and associated switching infrastructure at Hopefield Substation to cater for the
additional capacity requirements.
• 88kV breakers on each of the existing incomers before the 20MVA transformers and it’s associated
protection upgrades for the additional works.
• 11kV Medium Voltage (MV) underground cable with associated joints and terminations to transfer
load from Hopefield Substation to Lawley Township boundary. 6x185, 3 core MV cable for
approximately 7.5Km.
The funding requirements for Lawley are in table 4.5 below:
Table 4.4: The funding requirements for Lawley
LAWLEY BULK SUPPLY Expenditure: Cash Flow

SUBSTATION Cost 2007/8 2008/9 2009/10
Material R 8,356,283.03 R 6,685,026.42 R 1,671,256.61
Labour R 3,581,264.15 R 2,865,011.32 R 716,252.83
Eng Fees R 954,220.64 R 763,376.51 R 190,844.13
Sub Total R 12,891,767.82 R 10,313,414.26 R 2,578,353.56
11KV BULK LINK
Material R 20,099,000.00 R 20,099,000.00
Labour R 2,891,100.00 R 2,891,100.00
Eng Fees R 1,666,747.48 R 1,666,747.48
Sub Total R 24,656,847.48 R 24,656,847.48
TOTAL R 37,548,615.30 R 34,970,261.74 R 2,578,353.56
Electrification of Pennyville and Associated 88/11kV Substation
The scope of this project is to design, supply, install, commission and hand over an 88/11kV, 2 x
45MVA Substation at Pennyville. The substation will cater for an installed capacity of 90MVA, with a
firm capacity of 45MVA, later providing for additional capacity up to 135MVA, with a firm capacity of
90MVA.
This substation will primarily supply the newly built Pennyville Housing Development comprising
approximately 2800 residential units requiring an initial bulk supply of 10MVA and later providing
supply to neighbouring areas. The funding requirements for Pennyville are in table 4.5 below
Table 4.5: The funding requirements for Pennyville

PENNYVILLE BULK SUPPLY Expenditure: Cash Flow
Cost 2007/8 2008/9 2009/10
88/11kV Substation
Material R 21,000,000.00 R 6,000,000.00 R 15,000,000.00 R 10,994,371.20
Labour R 9,000,000.00 R 9,000,000.00 R 7,329,580.80
88KV interconnector
Material R 1,890,000.00 R 0.00 R 0.00 R 1,890,000.00
Labour R 810,000.00 R 0.00 R 0.00 R 810,000.00
ROAD
Material R 2,240,000.00 R 0.00 R 0.00 R 2,240,000.00
Labour R 960,000.00 R 0.00 R 0.00 R 960,000.00
11KV BULK LINK
PENNYVILLE BULK SUPPLY Expenditure: Cash Flow

Cost 2007/8 2008/9 2009/10
Material R 3,800,000.00 R 0.00 R 3,800,000.00
Labour R 715,000.00 R 0.00 R 715,000.00
Eng Fees R 3,870,000.00 R 2,500,000.00
Sub Total R 44,285,000.00
TOTAL R 88,570,000.00 R 8,500,000.00 R 24,000,000.00 R 28,738,952.00
Electrification of Kliptown and Associated Bulk Supply
The scope of this project is to design, supply, install, commission and hand over the complete electrical
reticulation network for Kliptown RDP Development and provide Bulk supply infrastructure to transfer
capacity from Orlando Ekhaya Substation to the Kliptown RDP boundary which is approximately 8km.
The development consists of 5700 residential units and a bulk load of 17.5MVA will be required using
an ADMD of 3kVA/stand. Bulk Supply to the development will be transferred via 3 x 300mm2; XLPE
cables from the Orlando Ekhaya Substation to the development boundary. The funding requirements for
Kliptown are in table 4.6 below.
Table 4.6: The funding requirements for Kliptown

Switching station and connecting supply Expenditure: Cash Flow
BULK SUPPLY Cost 2007/8 2008/9 2009/10
Material R 65,676,000.00 R 19,702,800.00 R 45,973,200.00 R 1,010,400.00
Labour+ Professional
services R 16,840,000.00 R 3,368,000.00 R 13,472,000.00 R 673,600.00
Sub Total R 84,200,000.00 R 23,070,800.00 R 59,445,200.00 R 1,684,000.00
To conclude, bulk infrastructure is becoming increasingly critical in the roll out of the electrification
programme. The total funding requirements to allow bulk to address the electrification are in table 4.7
below:
Table 4.7: Total funding requirements for bulk supply
Project Name 2007/8 2008/9 2009/10 Total

Lawley Bulk 34,970,261.74 2,578,353.56 0 37,548,615.3
Pennyville Bulk 8,500,000.00 24,000,000.00 0 32,500,000.0
Kliptown Bulk 23,070,800.00 59,445,200.00 0 82,516,000
Mountainview Bulk(Lunar N/A N/A 6 750 000.00 6 750 000.00
Substation)
Hospital Hill Bulk(Supplied from N/A NA 6 250 000.00 6 250 000.00
Lotus Substation)
Alexandra ext 9 & 10 Bulk 10 000 000.00 10 000 000.00
(supplied from Alexandra
substation)
Fleurhof Substation 85 000 000.00 85 000 000.00
Total 66,541,061.74 86,023,553.56 108 000.000.00 260,564,615.3

Challenges
The following are the challenges currently faced by City Power in rolling out the electrification projects:
Lack of funding, for both internal reticulation and bulk infrastructure requirements
Slow allocation of beneficiaries by housing to their respective RDP houses
Slow pegging and re-location of beneficiaries to their demarcated stands
Lack of coordination between departments and spheres of government e.g. Local and provincial
housing
Unavailability of Housing Master Plan to guide the electrification future project plans
Public lighting
Public lighting is one of the mayor’s strategic priorities. Table 4.8 below shows the amounts that have
been spent so far on public lighting per annum.
Table 4.8: Funds spent on public lighting per annum

Project object 2004 2005 2006 2007 2008
PLL1 Diepsloot /
Midrand / Ivory PL 675,000.00 3,676,000.00 5,100,000.00 3,650,000.00 5,686,219.00
PLL03 Northcliff /
Rosebank 588,500.00 2,600,000.00 1,800,000.00 1,360,000.00 2,552,365.00
PLL05 Roodepoort
Public Lighting 650,000.00 2,860,000.00 3,850,000.00 4,450,000.00 3,841,404.00
PLL06 Soweto Public
Lighting 4,400,000.00 8,840,000.00 5,950,000.00 8,710,000.00 8,161,689.00
PLL05 Alex Randburg
Sandton PL 1,820,000.00 8,380,000.00 4,900,000.00 4,960,000.00 6,010,745.00
PLL08 Johannesburg
South / CBD PL 1,000,000.00 6,443,000.00 3,600,000.00 2,120,000.00 6,519,639.00
PLL11Orange Farm
Lenasia Ennerdale PL 1,100,000.00 1,040,000.00 3,400,000.00 3,750,000.00 7,984,864.00
TOTALS 10,233,500.00 33,839,000.00 28,600,000 25,250,000.00 40,756,925.00
Analysis of current backlog for new streetlights has been done. Table 4.9 below is the backlog of
streetlights per administrative region.
Table 4.9: The backlog of streetlights per administrative region.

No of Streetlights per No of Streetlights required Budget Required
Region area per area % Backlog (Present day cost
A 9 934 26 393 73% R 263,930,000.00
B 37 430 500 1% R 5,000,000.00
C 23 596 12 555 35% R 125,550,000.00
D 29 028 26 677 48% R 266,770,000.00
E 25 934 28 025 52% R 280,250,000.00
F 39 762 1 789 4% R 17,890,000.00
G 14 166 22 305 61% R 223,050,000.00
Total 179 850 118 244 40% R 1,182,440,000.00

For City Power to eradicate its street lighting backlog it will require a budget of R160m per annum. The
graph below indicates that at the current provision the backlog for street lighting will reduce at a very
low rate. Graph 4.1 below shows the projection for Public Lighting within proclaimed areas;
Graph 4.1: The projection for Public Lighting within proclaimed areas
Projection for Public Lighting backlog within proclaimed areas
R 800,000,000
R 700,000,000
R 600,000,000
R 500,000,000
R 400,000,000
R 300,000,000
R 200,000,000
R 100,000,000
R- 2011
2007 2008 2009 2010 2012
Financial Year
Funds @ R30m p.a Funds @ R160m p.a.
The current public lighting budget is R30m per annum. The R30m per annum is 4000 street lights per
year which equates to a 1% reduction rate of the backlog. At this rate City Power will only achieve 1%
backlog reduction rate per annum.
4.1.1.3 Reduction of losses
The City of Johannesburg has a 5 year objective of reducing losses by 2 percent. This target is moving
from 12.5% total losses in June 2008 and should be at 11.5% by 2010. Total losses are made up of
technical and non-technical losses. The technical losses are at 9% and the non technical losses were at
3.5% at the end of June 2008. The programme to reduce losses includes:
• Continued customer education programmes in targeted areas;
• Continuous roll-out of protective structures in order to reduce tampering with
conventional meters and street light poles;
• Promote alignment with the City’s debt write-off and indigence support programmes;
• Provide clear criteria to inform where and when prepayment meters will be used;
• Installation of prepayment meters.

4.1.1.4 Reduction of outages
Outages can be classified in the HV, MV and LV categories. Table 4.10 and 4.11 below show the
number of outages over the past four years. It can be seen that the outages have decreased over the
years.
Table 4.10: HV outages

04/05 04/05 05/06 05/06 06/07 06/07 07/08 07/08 08/09 08/09
Month All NPR All NPR All NPR All NPR All NPR
Jul 6 6 13 13 5 5 2 2 14 14
Aug 5 4 14 12 6 6 9 9 4 4
Sep 13 9 8 6 5 5 5 5 5 5
Oct 10 10 9 8 6 6 8 8 5 5
Nov 10 9 16 13 10 9 9 9 3 3
Dec 12 11 8 8 7 6 7 7 11 11
Jan 16 16 13 10 10 10 7 7 5 4
Feb 13 13 9 8 1 1 10 9 14 13
Mar 13 13 16 15 5 5 4 4 4 3
Apr 22 19 0 0 5 5 3 3 4 3
May 12 11 6 5 11 11 12 12 2 2
Jun 12 12 5 4 9 9 5 5 4 4
Total 144 133 117 102 80 78 81 80 75 71
Ceiling 85 80 80
Table 4.11: MV outages
04/05 04/05 05/06 05/06 06/07 06/07 07/08 07/08 08/09 08/09
Month All NPR All NPR All NPR All NPR All NPR
Jul 121 105 97 70 112 98 134 96 164 73
Aug 71 59 86 61 152 143 95 59 190 87
Sep 115 97 83 62 88 77 77 56 143 54
Oct 126 102 114 92 114 94 95 73 149 59
Nov 114 100 104 76 102 77 100 62 135 73
Dec 130 98 94 87 100 87 78 64 129 75
Jan 152 134 132 122 93 73 106 85 103 64
Feb 108 81 106 99 62 45 89 67 120 78
Mar 92 60 107 95 85 44 134 91 123 62
Apr 135 111 106 83 79 59 142 88 96 53
May 106 88 116 104 118 87 132 83 117 63
Jun 70 60 86 70 79 57 152 92 146 103
Total 1340 1095 1231 1021 1184 941 1334 916 1615 844
Ceiling 1000 950 1050
Going forward, City Power will be using CAIDI, CAIFI, SAIDI and SAIFI figures to measure
interruptions on the network.

• CAIDI = Customer Average Interruption Duration Index. This measures, on average, how long a
customer was out.
• CAIFI = Customer Average Interruption Frequency Index. This measures, on average, how often
a customer was out.
• SAIDI = System Average Interruption Duration Index. This measures, on average, how long a
system was out.
• SAIFI = Customer Average Interruption Frequency Index. This measures, on average, how often
a system was out.
The current year will be use as a baseline for these measures. Table 4.12 below shows the actual figures
for the quarter
Table 4.12: Actual performance for the quarter
Indicies Unit Jul 08 Aug 08 Sep 08 Oct 08 Nov 08 Dec 08 Jan 09 Feb 09 Mar 09 Apr 09
CAIDI Min 341.01 317.03 193.57 351.4 342.1 359.58 250.96 303.27 175.54 386.54
CAIFI Times 1.64 1.41 1.3 1.59 1.49 1.51 1.54 1.48 1.44 1.63
SAIDI Min 25.85 15.19 10.35 22.08 21.08 23.07 14.35 19.52 9.12 6.84
SAIFI Times 0.12 0.07 0.07 0.1 0.1 0.1 0.09 0.1 0.07 0.03
Demand side management programme (DSM)
Table 4.13: DSM programme
Project / Intervention Title Gas Turbine Refurbishment
Objective To refurbish the John Ware, Durban Street and Cottesloe Gas Turbine sets to
their original design capacity and establish operational capacity for the purpose
of improving the security of supply
Potential Yield – Energy Dependent on operating Project timeline Start:: Jan 08

savings GWh hours – 8 hrs per weekday
day = 19.68 GWh per month End: Dec 2009
Potential Yield - Demand 120 MW Budget Estimate R49,6 for 2007/8

MW
(R mil) R12 - 2008/9
R30 – 2009/10
Finance Source CAPEX - DSM Levy
Progress Report 100 of 120Mw has been restored to service, 1.2 million litres of fuel recovered
Issues Raised In terms of fuels supply, application is being made to DME for exemption from
certain fuel taxes and levies.
In order to avail the generating capacity in times of emergency, a means of

passing the fuel cost on to consumers needs to be established. Several models
are being investigated and documented for assessment.
Actions to be taken Operational structures to be established. Control system refurbishment is still

required (R30 million).
Project / Intervention Title Project - Ripple Control Audit and Reinstatement (Existing Areas)
Objective To refurbish and restore capacity to existing ripple geyser control systems in the
area of supply, by auditing and re-instating the 140 000 installations in the areas
where it was previously installed, and install receivers in the Cleveland and
Observatory substation areas where new transmitters have been installed.
Potential Yield – Energy Project Start date

savings per annum timeline
Completion target
Potential Yield - Demand 150 MW at morning and Budget R5m for 08/09
Reduction evening peak periods, (geyser Estimate
load only) R5mfor 09/10
(R mil)
Finance Source DSM levy
Progress Report 40 000 ripple control units have been purchased and are in storage. Contractors
to provide area audits and installations in new areas have been short-listed and
the procurement process to appoint them continues.
Risk / Issues Raised
Actions to be taken
Project / Intervention Title Project - Load Management Expansion into New Areas (Conventional
Ripple or Smart Metering systems)
Objective To expand geyser control throughout the area of supply, (areas never previously
equipped, or where discontinued radio systems were installed), where it is
estimated an additional 150 000 residences will be connected. The project may
include time of use or demand response (smart) metering in conjunction with
active load switching.
Potential Yield – Energy Project Start date

savings per annum timeline
Completion target
Potential Yield - Demand 150 MW at morning and Budget R 90 for 08/09

Reduction evening peak periods, (geyser Estimate
load only) R 100 for 09/10
(R mil)

Finance Source DSM Levy
Progress Report Following the evaluation of the RFP (closed April 08) the need to clarify cost
effective and sustainable telecommunications platforms for bi-directional
metering communications became apparent.
35 respondents were evaluated, however no new appointments have been made

over and above two existing suppliers involved in pilot projects at City Powr.
Risk / Issues Raised At the time of RFP issue, the NRS049 advanced metering specification was also
not finalized. Suppliers were subsequently asked to state the degree of
compliance of their offers to the specification, verification of such compliance
would be required
Actions to be taken Evaluation presentation sessions to be set up on 8 and 9 May, ISD to be invited.
Project / Intervention Title Solar Water Heating Installation - Pilot project.
Objective To install 42 solar water heating systems at approximately 40 residences on a

measured, trial basis to test the viability of City Power acting as an implementer
for a large scale SWH roll-out project. The objective is also to identify the
potential difficulties of SWH installation and secure the endorsement of
participants following success of pilot. (CoJ Mayoral Committee participating.)
Potential Yield – Energy Estimated 3212 kWh per Project Start date: 25/3/2008
savings per annum installation per annum, based timeline
on 200 litres hot water used Completion target: July 2008
per day.
Potential Yield - Demand Estimated 0,7 kW per Budget R 1 for 07/08

Reduction installation Estimate
(R mil)
Finance Source 50% DBSA and 50% CAPEX
Progress Report Project framework and charter developed. In terms of identifying suppliers, the
procurement process
Risk / Issues Raised DBSA Financial year end – request to extend or move to next year.
Actions to be taken Site identification (Mayoral Committee members) to be concluded.
Project / Intervention Title Solar Water Heating Installation - Mass Roll-out.
Objective To act in the capacity of an implementer and operator, on a fee-for-service basis

(revenue generation), of solar water heating systems across the area of supply.
To diversify the region’s energy mix to include renewable energy on a
significant scale. 220 000 residences are estimated to be suitable for installation.

Potential Yield – Energy Estimated 3212 kWh per Project Start date: August 2008
savings installation per annum, based timeline
on 200 liters hot water used Completion target: August 2010
per day. 706,6 GWh per
annum
Potential Yield - Demand Estimated 0,7 kW per Budget R 1200 for 09/10
Reduction installation Estimate
(R mil) R 2000 for 10/11
154 MW diversified
Progress Report An RFP for a Transaction Advisor and arranger was issued by City Treasury and
closed 3 Nov 08. Bidder presentations were invited and conducted for all
interested parties. Two offers have been short-listed and negotiations are to be
conducted with both.
An RFP for solar water heater suppliers and installers was issued by CP and
closed 30 January 09. Bidder presentations were invited and conducted for all
interested parties in the week of 23 to27 March. The procurement process
continues.
Risk / Issues Raised The pre-requisite for ‘off balance sheet’ funding was stipulated by Council.
However, this may not be entirely possible both in terms accounting practices /
regulations applicable to municipal entities and guarantees that potential
investors are likely to include in funding arrangements.
Supplier capacity needs to be cross-checked across bidders as equipment

commitment made to the various installing companies.
Actions to be taken The procurement processes as well as the exact roll-out strategy will be decided
and applied following the evaluation of both arranger and supplier offers.
Project / Intervention Title Building Energy Efficiency, EE lighting retro-fit,
Objective To reduce the energy consumption of City Power’s offices and depot facilities
by:
Replacing inefficient incandescent and older fluorescent lighting with EE

lighting and control gear.
Installation of motion sensors to control lighting and air conditioning load of
unoccupied facilities.
Potential Yield – Energy Subject to RFP assessments Project Start date: April 09
Savings per annum per site. 15% minimum timeline
targeted Completion target: June 09
Potential Yield - Demand Subject to RFP assessments Budget R 6 for 08/09

Reduction per site Estimate

(R mil)
Finance Source CAPEX - DSM Levy
Progress Report RFP to be advertised and issued in April
Risk / Issues Raised Risk of delivery / installation after end June (financial year end)
Actions to be taken Installation of metering systems for the purpose of measurement and verification
to be concluded prior to implementation
Project / Intervention Title Street Lighting Control – Replacement of electro-mechanical clocks
Objective To replace all electro-mechanical street lighting clocks that are affected by
supply interruptions due to load shedding activities with battery backed up
electronic clocks. Specifically applies to street light strings controlled from
chambers inside buildings and transformer houses where it is impractical to
install photocells.
Potential Yield – Energy Avoids wasted day time Project timeline Start: April 08
Savings per annum energy consumption due to
mechanical clock drift Completion target: Dec 09
Potential Yield - Demand Budget Estimate R 1 for 07/08

Reduction
(R mil)
Finance Source CAPEX (From R 100 m CoJ additional DSM allocation 07/08 )
Progress Report The replacements are done as part of maintenance as well as in response to
reports of cases of street lighting being on in daytime.
Actions to be taken
Project / Intervention Title Installation of Pre-paid metering and Protective Structures
Objective To reduce non-technical losses in the Naturena area, thereby reducing

uncontrolled energy consumption and revenue loss, as well as associated
demand that is exacerbating the need for load shedding of paying customers.
Potential Yield – Energy Project timeline Start date: March 08

Savings per annum
Completion target
Potential Yield - Demand Budget Estimate R 10 for 2007/8

Reduction

(R mil) R 11 for 2008/9
Finance Source CAPEX ( From R 100 m CoJ additional DSM allocation 07/08, CAPEX 08/09 )
Progress Report Completed
Actions to be taken
Project / Intervention Title Customer Energy Efficiency Awareness and Education
Objective Identify effective communication methods and media, and use these to provide
Energy Efficiency information to customers. The aim is to create awareness and
educate customers on the need (avoiding load shedding) and benefits (financial
savings) of energy conservation and efficiency measures that can be
implemented. Create an energy efficient culture and promote investment in EE
interventions.
Potential Yield – Energy Target 10% reduction of Project This is a continuous exercise
Savings domestic and light timeline
commercial load – (1260
GWh per annum)
Potential Yield - Demand Variable Budget R 3.4 for 2007/8

Reduction Estimate
R2.7 for 2008/9
(R mil)
R 3.5 for 2009/2010
Finance Source OPEX, allocation from DSM Levy
Progress Report Pamphlets and material created and distributed, and a broad PR campaign
planned.
Risk / Issues Raised Additional, professional advice to be sought from industry leaders – best
methods to get effective messages across must be found. Include animated ads,
industrial theatre, City Buzz and inserts into billing statements
Actions to be taken Coordination with the NERT Communications work group.
Project / Intervention Title Compact Fluorescent Lighting (CFL) Residential Roll-out
Objective To replace one million incandescent light bulbs, (nominally three per
domestic/residential customer premises). Establish a CFL bulb replacement
scheme via our customer walk-in centres to ensure sustained use of CFLs and
provide an environmentally acceptable method of bulb disposal. (Partner with
Pikitup)

Potential Yield – Energy 67,5 GWh per annum Project timeline Start: April 2008
Savings
Completion: Dec 2008
Potential Yield - Demand 45 MW, 5 hours Budget Estimate R 15 for 08/09

Reduction covering evening peak
period. (R mil)
Finance Source National DSM funding.
Progress Report UNFCC funding with the supplier partner was effectively abandoned as the
likelihood of success reduced considerably. Agreements to work with the NEEA
/ CEF / Eskom are being negotiated.
Actions to be taken
Project / Intervention Title Energy Efficient Street Lighting. (Mercury Vapour bulb replacement)
Objective To replace 7638 Mercury vapour 400 Watt street light lamps with 250 Watt high
pressure sodium lamps
as well as replace 10 000 mercury vapour 125 Watt with 70 Watt high pressure
sodium lamps.
Potential Yield – Energy 6.3 GWh per annum Project April 2008
Savings per annum timeline Completion: Oct 2008
Potential Yield - Demand 1.65 MW Budget R 19.4

Reduction Estimate
(R mil)
Finance Source National DSM funding.
Progress Report Project framework completed.
Actions to be taken The process of accessing National DSM funding and establishing a co-operation
agreement with CEF to continue
Project / Intervention Title Distributed Generation Plant Installation / Partnering
Objective To identify the capacity of privately-owned standby generation that may be

available for utilisation by means of generation partner agreements. (On an
interruptible or load displacement basis where a peaking tariff is used to offset
private generation fuel costs). Also determine the standby generation capacity that
Municipal Owned Entities (MOEs) require, that may be installed and used on the
same principle.
Potential Yield – Energy Not applicable Project Start date: April 2008
Savings per annum timeline
Potential Yield - Demand To be determined by survey to Budget R 1for 2007/8

Reduction identify customers with installed Estimate
generation capacity and capacity R 80 for 2008/9
requirements of MOEs requiring (R mil)
backup power.
Finance Source CAPEX
Progress Report The generator requirements of the Civic Centre have been specified and the
procurement process started. Other municipal entity requirement assessments are
continuing
Risk / Issues Raised The concept of aggregating privately owned is at risk if the single buyer model as
currently proposed for all independent power producers (IPPs) is finally legislated
by NERSA.
Actions to be taken Options of establishing CP as an IPP broker, in a position to sell aggregated

premium cost power to Eskom on a pass-through basis, to avoid load shedding to
be investigated
4.1.1.6 Inner city rejuvenation
City Power is participating in the Inner City development programme. Currently the Inner City has old
network that has passed it useful life span and needs to be refurbished. Most of the 2010 projects are in
the Inner City and will assist in the upliftment of the Inner City. There are a number of projects planned
for the inner city but due to budget constraints, City Power will only be concentrating on 2010 FIFA
World Cup related projects.
4.1.1.7 2010 FIFA World Cup Projects
City Power has developed a comprehensive 2010 strategy which is outline below.
FIFA infrastructure Requirements
The following is an extract referring to the electrical requirements for stadia from the published FIFA
document: Technical Recommendations and Requirements for the Construction or Modernisation of
Football Stadium (Published by Federation Internationale de Football Association)
Clause 27: Lighting and Power Supply
“For all matches played at the top level of the game in the evening, the entire surface of the playing area
must be evenly lit, to a standard which guarantees clarity of vision for match participants and spectators,
and which enables the match to be relayed on television. It is imperative that power failure should not
lead to the cancellation or postponement of a match or television broadcast.”
“To guard against this a stadium should have two sources of power, each one completely independent of
the other. The power system should be such that in the event that any failure of the primary supply
should occur, the second independent supply would instantly and automatically cut in and provide an
uninterrupted flow of current.”
“This twin supply system must be available to all areas of the stadium whether it is the playing field,
spectator areas, internal rooms, corridors, etc.
“Additionally, a back-up generator should be available to provide power for emergency public
evacuation purposes in the unlikely event that both of the independent power supplies should fail.”
“It is quite unacceptable that power failure should in any way inhibit any part of the normal activities
within the stadium.”
Given the vast interconnected overhead network that forms part of the electrical grid in South Africa and
the environment in which this grid operates, there is a significant probability of momentary outages or
dips due to remote faults on the network. One of the key characteristics of the lights used for stadium
illumination is the required dead time between being switched off and being ready for reuse which is of
the order of 7 - 10 minutes. In addition to this cool down period, the lights also take several minutes after
being switched on before they reach full illumination. In the event of a dip or momentary outage causing
the lights to trip and reset, the game could be interrupted for 10 - 15 minutes.
Electricity Infrastructure
The reliability and quality supply of electricity will form the basis of the successful hosting of the event.
The City has to ensure an uninterrupted supply to various areas and facilities such as radio and TV
broadcasting centres, stadia (day and night games), hotels (FIFA family and fans), training and practice
venues, public viewing sites (live feed and entertainment).
Any service breakdown to the service facilities will be disastrous to the hosting of the event. It is also
expected that the winter peak demand (June/July) on the network will be increased to higher levels,
much higher than historical levels as a result of the number of visitors and extended hours of use at
public facilities, hotels etc.
This unusual consumption will put extensive demand on the existing networks. The department, together
with City Power, has identified various projects that have to be implemented to increase network
capacity and/or ensure reliability of supply. These programmes broadly include upgrade and/or
replacement of obsolete infrastructure and installation of lights at public spaces. Also, the projects,
particularly around stadia precincts are aimed at providing back-up supplies and independent sources of
power.
City Power together with JDA has analysed all the load requirements to each stadium precinct and
adequate power provision is being catered for through a series of projects, either from new supply points
or from existing networks.
Operational Readiness
The preparatory work on identification of 2010 electrical infrastructure requirements has started.
Consultants with relevant expertise have been brought in to assist with drawing up the project plan and
ensuring that the FIFA requirements, in terms of quality and reliability of supply, are met.

The construction contracts for Crown and Siemert Road Substations have been awarded. Both
substations are key supply points for the main stadia, namely Soccer City (Nasrec Precinct) and Ellis
Park. The transformers have been purchased to expedite the process.
All street lighting requirements in the stadia precincts and major access roads to the main stadia are
being renewed and reviewed by City Power
The following is the list of projects identified for the Ellis Park Precinct, Nasrec Precinct, Major intake
points and the Training Venues. These projects exclude any standby facilities at the stadia. These
facilities will be provided in conjunction with the stadia management.
Table 4.14: Ellis Park Stadium Projects
Substation / Township Description Status
Ellis Park Precinct Upgrade Street Lighting Construction
Ellis Park Precinct LV and MV upgrade Construction
Upgrade MV switchgear & distributors to 185 mm due Construction

Siemert
to increase in load for Soccer World Cup
Third transformer plus switchboard. Refurbish 11 kV Construction

Siemert
breakers and reconfigure bus bar.
Upgrade MV distributors and sub rings from Final Design

Observatory
Observatory sub station.
New distributors from Siemert sub station to proposed Final Design

Siemert
hotel and other developments
Upgrade and extend the Doornfontein/Fort standby Construction

Siemert
distributors
Establish 132kV/11kV substation comprising of 2 x Construction

Crown
30MVA transformers
Crown Sub station New distributors from new Crown sub station to Construction
Master Plan Nasrec Precinct.
City Power is running a pilot project on the installation of monitoring devices at critical points to combat
crime like cable theft and vandalism. The project will ensure the quick response of security personnel to
the scenes of crime. This technology will be used on all supply points to major venues and those critical
points identified as critical to the event.

The networks are designed to cater for redundancy from two independent sources. If one circuit fails the
other circuit should be able to kick in immediately without any power loss to the venue. For extra
caution, City Power will provide 24 hour standby teams to all major venues. Depending on criticality of
the venue, some standby teams will spend 24 hours on the supply point to cover for any unforeseen
emergencies. If need be, City Power and neighbouring Electrical Utilities will share resources to ensure
an adequate number of operational personnel during the event and, if necessary, outside contractors will
brought on board.
City Power is working with stadia management to see how the uninterruptible power supply will be
connected to ensure maximum power availability, especially at the stadium itself and broadcasting
centres.
City Power depends mostly on Eskom and Kelvin supply, and these two entities will form part of the
dedicated team that will ensure supply reliability during the event.
Training Venues
The city has identified 16 potential training venues within it’s boundaries. Among the 16 venues only 4
will be chosen as the final venue to accommodate the 8 teams that will be playing matches within CoJ’s
match boundaries.
Below is the list of venues that fall within the City Power area of supply boundaries:
• Rand Stadium
The supply has been assessed and deemed to be adequate to supply the basic facilities for training
purposes.
• Ruimsig Stadium
The supply has been assessed and deemed to be adequate to supply the basic facilities for training
purposes.
• Dobsonville and Orlando Stadiums are in the Eskom supply area.
Capital Projects
The projects identified as part of this initiative will be motivated and detailed in an Implementation Plan,
but initially for the purposes of this report will be summarised in the table 4.15 below:
Table 4.15: Capital projects identified for 2010

Project Funding Funding
Available R Required R
New distributors from new Crown sub station to Nasrec Precinct. Yes 5,000,000
Rationalisation of supply in Aeroton to provide the standby facility No 8,000,000
to the stadium
Establish 132/11kV Crown substation. Yes 16,000,000
Upgrade and provide new street lighting on routes leading to No 7,500,000
Nasrec
Mondeor 88kV Switchyard No 32,500,000
Quattro 275/88kV Substation @ Orlando No 250,000,000

Project Funding Funding

Available R Required R
Quattro 88kV lines re-route No 3,000,000
Eikenhof – Mondeor 88kV Lines No 2,045,328
Quattro 1 – Mondeor 88kV lines No 2,045,328
Delta – Quattro 88kV lines 0 No 29,533,200
Fordsburg – Quattro 88kV lines No 16,214,592
Prospect – Mondeor 88kV lines No 16,214,592
Quattro – Etna 275kV lines No 100,000,000
Quattro 2 – Mondeor 88kV lines No 2,045,328
Esselen – Sebenza 275kV lines No 100,000,000
Sebenza 275/88kV Substation @ Kelvin No 250,000,000
Kelvin – Delta 88kV lines No 40,214,592
Prospect – Sebenza 275kV lines No 30,000,000
Milpark/Wits – (Milpark) No 1,000,000
Rabie Ridge - (Rabie Ridge) No 1,000,000
RAU – (Melville/Westdene) No 1,000,000
Ruimsig – (Ruimsig) No 1,000,000
Cecil Payne – (Florida) No 1,000,000
Rand - (Turfontein) No 1,000,000
Wanderers – (Illovo) No 1,000,000
Upgrade Street Lighting at Ellispark No 7,852,000
LV and MV upgrade phase 1 at Ellispark Yes 12,500,000
Observatory Sub. Bus bar reconfigure and refurbishment. No 12,500,000
Install third 45MVA transformer plus switchboard. Refurbish 11 Yes 35,000,000
kV breakers and reconfigure 88kV bus bar at Siemert Road
substation
Rebuild parking bay at Siemert Rd Depot, to accommodate Yes 2,000,000
Siemert Rd substation upgrade. (Space constraints)
Upgrade MV distributors and sub rings from Observatory sub No 5,500,000
station.
New distributors from Siemert sub station to proposed hotel and No 7,200,000
other developments
Upgrade and extend the Doornfontein/Fort standby distributors No 1,700,000
Provide stable temporary connections for Fan Parks (lighting, No 3,000,000
equipment supplies and catering)
Ensure reliable supplies for traffic lights to avoid congestion No 1,000,000
caused by local power failures
CAPEX TOTAL
City Power 1,010,364,960
Note:
• The above CAPEX requirements will generate future operational budget requirements to maintain
them and to service any loans – this has not been taken into account at this stage.
• Timelines and lead times are critical, and in many cases projects must be agreed to immediately if
they are to be completed and commissioned in time for 2009/2010.
Capital Budget Requirements

As part of it’s operational readiness City Power has identified the upgrading and new installation
projects as indicated elsewhere. A budget of R 1,010 bn is solely for the designated areas of the 2010
SWC in order to meet FIFA compliance as defined in section 4 of this document
Environmental Factors
Alternative sources of energy such as solar and gas are being investigated to provide power at facilities
such as stadia, public viewing sites and temporary commercial areas to reduce the demand and strain on
the network. Alternative energy sources are aimed at providing power for ‘low consumption’
requirements such as water heating and lighting.
The upgrade of official venues is targeted for these options also as part of the FIFA ‘Green Goal’
programme.
Stakeholder Involvement
The key stakeholders in respect of energy services are Eskom and Kelvin Power, who are the major
suppliers of electricity generation and are therefore crucial to ensuring generating capacity. Kelvin
Power provides a very small amount of generating capacity. Eskom, being the national supplier, is under
pressure to meet the capacity requirements for 2010. It has been recognised that generation capacity is an
issue for the country in that there currently is insufficient generation capacity to meet demand. To
address this Eskom have obtained approval for restarting the previously mothballed generation plants
and have initiated this programme already. They hope to supply the requirements by 2009.
City Power have indicated their expected maximum demands to Eskom and Kelvin during the event and
the two entities are making means to ensure those requirements are met. The event coincides with the
country’s winter peak, so one needs to carefully analyse the impact of the event on the already expected
higher peak.
Through the AMEU intervention, City Power is engaging with all the host cities’ electrical departments
and Eskom to standardise all designs and engage other stakeholders with experience of previous events,
to ensure proper estimation of load requirements and general experience of hosting a similar event.
Other key stakeholders include neighbouring municipalities such as Ekurhuleni and Mogale who have
substations that can be tapped into if need be. There will have to be an agreement in place between the
City and the other municipalities. Due consideration will have to be given in respect of the negotiating
strategy in this regard.
Legacy Projects
All the projects identified above will form part of the legacy projects. This is because the projects that
will be implemented will go on to serve the rest of the community and the stadiums which sorely needed
such an upgrade.
.4.1.1.8 EPWP (Expanded Public Works Programme)
The EPWP is one of the governments short to medium-term programmes aimed at reducing
unemployment and thereby alleviating poverty. For the past three years, a number of projects have been
identified, which has created more than 6 500 temporal jobs. The table below indicate the exact number
of temporal jobs created through EPWP programme for specific period;

Table 4.16 Jobs Created through EPWP

Description 2005/6 2006/7 2007/8 2008/9 2009/10
Number of 2600 3000
temporal Jobs 1515 2455 3098 (Depending on (Depending on the
Created the available available projects)
projects)
Note: The number of jobs created is limited by the projects availability, which is also informed by the
budget/ availability of funds.

The graph below shows the number of temporal jobs created through EPWP from 2005/6 to 2007/08.
4,500
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0
2005/06 2006/07 2007/08
EPWP 1,515 2,455 3828
4.1.1.9.Revenue Maximization
Revenue target is driven from units (kWh) sold informed by the units purchased, tariffs charged and non-
technical losses percentage. Revenue targets are depended on meters to be installed correctly and their
accessibility to be read. Reduction in time between customer consumption to billing is integral to
measure revenue completeness.
The customer acquisition process has been automated to reduce loss of new customer application forms
and to ensure that feedback is given to Customer Service. However, the system is not fully utilised thus a
gap in using manual capturing, resulting in lost documents and this affects completeness of revenue.
Current prepaid meters make it difficult to accurately report on prepaid revenue completeness. The
proposed installation of automated metering including prepaid meters will make it easy for reporting on
actual consumption, which will address completeness of revenue.
Challenges are:
• By-passed meters
• Faulty CT & VT
• Un-metered supplies
o Billboards, traffic lights, direction boards
o Premises without a meter
• Faulty meters
• Meter Readings
• Reduction of non technical losses
• Cash management
o Payment levels
o Summary on Collections
Future Plans
City Power’s response to the above mentioned challenges is a comprehensive strategy that will include:
• Removal of illegal connections
• Re-commissioning of by-passed meters
• Intensifying data and technical audits
• Continuing with meter installations for un-metered customers
• Intensifying credit control measures

• Converting to pre-payment meters

• Automated metering
The projects are explained on more detail below of these project is
Remove illegal connections
City Power will continue to pursue legal recourse to eliminate illegal connections. Potential benefit is
improvement in customer safety, an increase in revenues and a reduction in losses. The estimated cost of
implementation is R30 million in the medium term and another R30 million in the longer term. In
addition City Power will continue to strengthening security in hot spot areas.
Re-commissioning of by-passed meters
City Power will continue to pursue the re-commissioning of approximately 14 000 bypassed meters.
Again it is expected that potential benefit is improvement in customer safety, an increase in revenues and
a reduction in losses. The estimated cost of implementation is R23 million in the medium term.
Intensify data and technical audits
City Power will intensify its efforts to audit its customer data sets with a view to increase the accuracy of
its information. This will lead to higher customer satisfaction and improved collections. The cost of
implementation is estimated at R95 million. Following on the short term interventions City Power will
continue with technical audits to identify and replace faulty meters, VT’s and CT’s. These initiatives
should contribute to an improvement in customer safety, an increase in revenues and a reduction in
losses.
Continue with meter installations for un-metered customers
City Power plans to continue with the installation of meters for un-metered customers. The aim of the
project is to reduce non-technical losses and improve revenues. The potential benefit of R77 million
Intensify credit control measures
Stricter enforcement of City Power’s cut-off policy will improve payment discipline and lead to an
increase of around R30 million in revenues.
Convert to pre-payment meters
In addition to the initiatives described under the short term strategic interventions, City Power’s ongoing
massive roll-out of prepayment metering will reduce the number of meters that have to be read
manually; this will eliminate estimations and accounts queries which should improve cash flow.
Automated metering
Automated metering means all meters will be read automatically. The benefits are improved cash flows
and increased customer service. The estimated cost of implementation is R750 million in the medium
term and another R750 million in the longer term.
To positively contribute towards the revenue, it is also recommended that more capital should be
allocated towards revenue generation and protection type projects.
Funding Requirements for Revenue Maximization Projects

Revenue Maximization projects Unit Type 2009/10 2010/11
Re-commissioning by-passed meters Rm Opex 23
Removal of illegal connections Rm Opex 30 30
Data and technical audits: CT's and VTs for LPUs Rm Capex 95
Intensify credit control measures Rm Opex 30 30

Convert to pre-payment smart meters Rm Capex 750 750
Convert to pre-payment smart meters Rm Opex 50 50
Protective structures Rm Capex 100 100
Roll out Automated metering Rm Capex 20 20
TOTAL Rm 1098 980
4.1.2 Core Processes

There are currently 7 main value chain processes within the organisation which are shown on table 4.1
below:
Table 4.17: The core value chain processes within the organisation
Value Proposition Driver: Company Value Chain:
Service Delivery Processes Manage Customer Interface
Product Delivery Processes Manage Availability of Supply
Maintain Network
Network Asset Creation
Supply Chain Management
Revenue Collection Processes Revenue Management
Human Capital Delivery Processes Manage Human Resources
The following has been rolled out in terms of the optimisation of the Value Chains. It must be noted that
all processes are at different stages:
• Job Profiles and Compacting of Value Chain Teams
• Value Chain forums
• Evaluation and validation of current processes
• Re-mapping and updating of processes
• Compilation of updated KPI’s and measurements
• RACI documents
• Communication of Value Chains
• Business Process Automation and Workflows
The following is what still needs to be done on the value chains:
• Visual dashboards of measurements and progress of all value chains
• Training of all levels of employees
• Intranet Site
• Monitoring progress and bottlenecks
• Benchmarking
• Continuous Improvement and sustainability of processes
A business process automation and document management project is in progress. It will implement
automation in phases for each of the value chains. The Value Chains need to still be fully
operationalised and effectively deployed across all levels of the organisation. Regular monitoring and
reporting must be more disciplined.

SECTION 5: PERFORMANCE FRAMEWORK
5.1 Balanced Scorecard Perspectives
Figure 5.1 below depicts the company’s balanced scorecard framework:
Figure 5.1 Company Balanced Scorecard Framework
Our Strategic Destination
COJ Stakeholder Perspective Community Perspective

“How do we attract resources and “How do we have a social impact with
authorisation for our mission” citizens/constituents”
Financial Perspective
“How should we manage and allocate
resource for maximum return”
Customer Perspective
“To achieve our vision, how must we look to
our customers”
Internal Process Perspective

“To satisfy our customers and shareholders,
at which processes must we excel”
Learning & Growth Perspective

“To excel at our critical processes, how must
our organisation learn and improve”
5.2 Key Performance Indicators
5.2.1. Financial Perspective

The company’s financial value proposition is depicted in Figure 5.2 below. In particular the value
drivers, in order of importance, are:
• Sustained cash flow
• Low operating costs
• Sustained profit
• Sustained revenue growth
• High asset productivity

Figure 5.2: Financial Value Proposition
The BSC financial indicators are given in Table 5.1 below
Table 5.1: BSC Financial Indicators

Measure Indicator Unit 07/08 08/09 Plan 09/10 Plan
Actual
Turnover RM 4,199 5,564 6,909
Direct Cost c/kWh 21.43 1 = above 32, 1= above 38
2 = 30 to <32 2= 36 to <38
3 = 28 to <30 3= 34 to <36
4 = 26 to <28 4= 32 to <34
5 = 26 and below 5= 32 and below
Gross Margin % 35.7 35,49 33,87
Bad Debts Contribution RM 108 1 = above 250 252

2 = 247 to <250
3 = 245 to <247
4 = 243 to <245
5 = below 243
OPEX RM 1307 1 = Plan +2% = 1,647 1,806
2 = Plan +1% = 1,646
3 = Plan =1,644
4 = Plan -1% =1,643
5= Below 1,643
Net Profit RM (48,508) 105,587 250,731
CAPEX - Controllable RM 757.39 1= Above Plan +/-3 1= Above Plan +/-3
(745) (820)
2 = Plan +/-3% (738) 2 = Plan +/-3% (812)
3 = Plan +/-2% (730) 3 = Plan +/-2% (804)
4 = Plan+/-1% (723) 4 = Plan+/-1% (795)
5 = Plan = 745 5= Plan =787
CAPEX - Non- Controllable RM 277.5 1= Above Plan +/-3% 1= Above Plan +/-3%
2 = Plan +/-3% 2 = Plan +/-3%
3 = Plan +/-2% 3 = Plan +/-2%

Actual
4 = Plan+/-1% 4 = Plan+/-1%
5 = Plan = 262,703.00 5 = Plan =
Subject to funding Subject to funding
Payment Levels – Key Customers % 100.38 1 = below 96 1 = below 96
2 = 96 to < 99 2 = 96 to < 99
3 = 99 to < 100 3 = 99 to < 100
4 = 100 to < 101 4 = 100 to < 101
5 = 101 & above 5 = 101 & above
Payment Levels – LPU Customers % 99.42 1 = Below 96 1 = Below 96
2 = 96 to < 98 2 = 96 to < 98
3 = 98 to < 99.5 3 = 98 to < 99.5
4 = 99.5 to < 100 4 = 99.5 to < 100
5 = 100 & above 5 = 100 & above
Payment Levels - Domestic % 93.42 1 = Below 90 1 = Below 90
Customers 2 = 90 to < 92 2 = 90 to < 92
3 = 92 to < 94 3 = 92 to < 94
4 = 94 to < 95 4 = 94 to < 95
5 = 95 & above 5 = 95 & above
Total Losses % 12.5 1 = 12.5 & above 1 = 12.4 & above
2 = 12.1 to <12.5 2 = 11.7 to <12.4
3 = 11.8 to < 12.1 3 = 11.3 to <11.7
4 = 11.5 to < 11.8 4 = 10.5 to <11.3
5 = below 11.5 5 = below 10.5
Technical % 9 1 = 9.4 & above 1 = 9.4 & above
2 = 9.1 to < 9.4 2 = 9.1 to < 9.4
3 = 9 to < 9.1 3 = 9 to < 9.1
4 = 8.5 to < 9 4 = 8.5 to < 9
5 = 8.5 below 5 = 8.5 below
Non-Technical Losses % 3.5 1 = 3.4 & above 1= 3 & above
2 = 3.1 to < 3.4 2= 2.6 to <3
3 = 3 to < 3.1 3= 2.3 to <2.6
4 = 2.5 to < 3 4= 2 to <2.3
5 = 2.5 below 5= below 2
5.2.2 Customer Perspective
The company’s customer value proposition is depicted in Figure 5.3 below. In particular the value
• Quality of supply
• Quality of revenue collection
• Quality service experience
• High product availability
• Affordable product price
• Positive company image
• Quality of customer information
• Quality of key customer relations

Figure 5.3 Customer Value Proposition
The BSC customer indicators are given in Table 5.2 below:
Table 5.2 BSC Customer Indicators

Actual
1= Below 80 1= Below 80
2= 80 to <84 2= 80 to <84
Customer satisfaction - Domestic
79 3= 84 to <85 3= 84 to <85
Customers
4= 85 to <87 4= 85 to <87
Index 5= 87 & above 5= 87 & above
1 = Below 70 1 = Below 70
2 = 70 to <75 2 = 70 to <75
Customer satisfaction – LPU Customers Index 74 3 = 75 to <81 3 = 75 to <81
4 = 81 to <85 4 = 81 to <85
5 = 85 & above 5 = 85 & above
1 = Below 70 1 = Below 70
2 = 70 to <75 2 = 70 to <75
Customer satisfaction - Key Customers Index 78 3 = 75 to <81 3 = 75 to <81
4 = 80 to <85 4 = 80 to <85
5= 85 & above 5= 85 & above
1 = 114 and above 1= 95 & above
2 = 105 to < 114 2= 85 to <95
Bulk Outages No 80 3 = 90 to < 105 3= 75 to <85
4 = 80 to < 90 4= 70 to <75
5 = 80 below 5= below 70
1 =105 and above 1= 85 & above
2 = 95 to < 105 2= 80 to <85
Bulk Outages - NPR No 78 3 = 80 to < 95 3= 75 to <80
4 = 60 to < 80 4= 65 to <75
5 = 60 below 5= below 65
1 = 1130 and above 1 = 1050 & above
2 = 1120 to < 1130 2 = 1000 to < 1050,
Medium voltage Outages No 1309 3 = 1000 to < 1120 3 = 900 to < 1050,
4 = 980 to < 1000 4 = 850 to < 900,
5 = 980 below 5 = Below 850

Actual
1 = 1130 and above 1= 1000 & above
2 = 1120 to < 1130 2= 930 to < 1000
Medium voltage Outages – NPR No 916 3 = 1000 to < 1120 3= 880 to < 930
4 = 980 to < 1000 4= 820 to <880
5 = 980 below 5= below 820
CAIDI No 323.57 TBD
CAIFI No 1.43 TBD
SAIDI No 24.16 TBD
SAIFI No 0.11 TBD
As Per NRS
Faults restoration within the specified 1=Below 22.5; 52.5;
time frame as a percentage of the total 82.5; 90.5 As Per NRS
number of faults reported (NRS 047) 2= 22.5; 52.5; 82.5; 1=Below 22.5; 52.5;
Within 1.5 Hrs % 98.84 90.5 82.5; 90.52= 22.5; 52.5;
Within 3.5 Hrs 3 = 25; 55; 85; 93 82.5; 90.5
Within 7.5 Hrs 4= 27.5; 57.5; 87.5; 3 = 25; 55; 85; 93
Within than 24 Hrs 95.5 4= 27.5; 57.5; 87.5; 95.5
5 = 30; 60; 90; 98 5 = 30; 60; 90; 98
5.2.3 Internal Process Perspective
The company’s internal process value proposition is depicted in Figure 5.4 below. In particular the value
• Product delivery processes
• Revenue collection processes
• Service delivery processes
• Governance and compliance processes
• Product pricing processes
• Strategy management processes
Figure 5.4: Internal Process Value Proposition
The internal processes indicators are given in Table 5.3 below:
Table 5.3: BSC Internal Process Indicators

Measure Indicator Unit 07/08 Actual 08/09 Plan 09/10 Plan

1= Below 90% 1= Below 90%

NRS 048
2= 90 to < 95% 2= 90 to < 95%
Compliance
% 100 3= 95 to < 97 % 3= 95 to < 97 %
Category 4 –
4= 97 to < 98% 4= 97 to < 98%
Domestic
5= 98% & above 5= 98% & above
NRS 048
2= 90 to < 95% 2= 90 to < 95%
Compliance
% 100 3= 95 to < 97% 3= 95 to < 97%
Category 2 –
4= 97 to < 98% 4= 97 to < 98%
Industrial
5= 98% & above 5= 98% & above
NRS 048 2= 90 to < 95% 2= 90 to < 95%
Compliance % 100 3= 95 to < 97% 3= 95 to < 97%
Category 3 – Rural 4= 97 to < 98% 4= 97 to < 98%
5= 98% & above 5= 98% & above
1 = Below 17% 1 = Below 21%
2 = 17% to < 20% 2 = 21% to < 22%
Engendered
% 22 3 = 20 to < 23% 3 = 22 to < 23%
Company Spend
4 = 23% to < 24% 4 = 23% to < 24%
5 = 24% & above 5 = 24% & above
1 = Below 65% 1 = Below 68%
2 = 65% to < 68% 2 = 70% to < 72%
BEE Spend (Opex
% 73 3 = 68% to < 73% 3 = 72% to < 75%
plus Capex)
4 = 73% to < 75% 4 = 75% to < 77%
5 = 75% & above 5 = 77% & above
5.2.4 Learning and Growth Perspective
The company’s learning and growth value proposition is depicted in Figure 5.5 below. In particular the
value drivers, in order of importance, are:
• Human Capital Utilisation
• Information Capital Utilisation
• Organisational Capital Utilisation
Figure 5.5: Learning and Growth Value Proposition

The Learning and growth indicators are given in Table 5.4 below:
Table 5.4 BSC Learning and Growth Indicators

Actual
2= 66% to < 70% 2= 67% to < 70%
Affirmative action % 70 3= 70% to < 73% 3= 70% to < 73%
4= 73% to < 75% 4= 73% to < 76%
5= 75% and above 5= 76% and above
2= 15% to < 20% 2= 20% to < 23%
3= 20% to < 24% 3= 23% to < 25%
Gender Equity % 24
4= 24% to < 26% 4= 25% to < 27%
5= 26% and 5= 27% and
above above
1= below 14 1= below 15
2= 14 to <16 2= 15 to <17
Number of Employees with Disabilities No 16 3= 16 to <18 3= 17 to <19
4= 18 to <20 4= 19 to <21
5= 20 and above 5= 21 and above
1= 1.5 and above 1= 1.5 and above
2= 1 to < 1.5 2= 1 to < 1.5
Disabling Injury Frequency Ratio
Ratio 0.87 3= 0.5 to < 1 3= 0.5 to < 1
(DIFR)
4= > 0 to < 0.5 4= > 0 to < 0.5
5= Equal to 0 5= Equal to 0
1=above 0 1=above 0
*Employees fatalities No
3 5=0 5=0
5.2.5 Community Value Perspective
The company’s community value proposition is depicted in Figure 5.6 below. In particular the value
• Minimum environmental impact
• Sustained social investment
• Sustained learnerships
• Sustained job creation
• Public safety

Figure 5.6: Community Value Proposition
Sustained social
Sustained Job
environmental
Public safety
learnerships
investment
Sustained
Minimum
creation
impact
20 % 20 % 20 % 20 % 20 %
IDP Scorecard
The IDP Scorecard is given in table 5.5 below:

Total Number of Customers No 313092 321,637
Prepaid No 120,000 350,000*
No 9057 1 = Below 2800 1 = Below 2800
2 = 2800 to <2900 2 = 2800 to <2900
Number of new electrification 3 = 2900 to <3000 3 = 2900 to <3000
customers 4 = 3000 to <4000 4 = 3000 to <4000
5 = 4000 & above 5 = 4000 & above
Dependent on funding Dependent on funding
No 18458 1= Below 14000 1= Below 14000
2= 14000 to <14500 2= 14000 to <14500
Number of potential
3= 14500 to <18000 3= 14500 to <18000
electrification connection
4= 18000 to < 19000 4= 18000 to < 19000
5= 19000 & above 5= 19000 & above
Total number of customer % 95 1= less than 75% 1= Below 89
complaints CLOSED versus 2= 76% to 89% 2= 89 to <92
Total number of customer 3= 90% to 95% 3= 92 to <95
complaints RAISED (during a 4= 96% to 99% 4= 95 to <98
defined period) 5= above 99% 5= 98 & above
% 61 1 = Below 62 1 = Below 63
2 = 62 to <63 2 = 63 to <64
Provision of Public lights in 3 = 63 to <64 3 = 64 to <65
formal Areas 4 = 64 to <65 4 = 65 to <66
5 = 65 & above 5 = 66 & above
Depending on funding Depending on funding
% 95 1 = below 90, 1 = below 90,
2 = 90 to < 95, 2 = 90 to < 95,
Public lights working in high 3 = 95 to <97, 3 = 95 to <97,
crime areas 4 = 97 to <98, 4 = 97 to <98,
5 = 98 & above 5 = 98 & above
Depending on funding Depending on funding


No 5 1 = Below 2 1 = Below 2
No. of tasks undertaken to
2=2 2=2
comply with environmental
3=3 3=3
management systems (ISO
4=4 4=4
14001) by target date
5 = 5 & above 5 = 5 & above
% 100 1 = No programme, 1 = No programme,
2 = Programme, 2 = Programme,
HIV/Aids workplace
3 = Programme + 1 interv, 3 = Programme + 1 interv,
programmes in place
4= Programme + 2 interv, 4 = Programme + 2 interv,
5 = Programme + 3 interv 5= Programme + 3 interv
No 3828 1 = 1000 below 1 = 1000 below
Job creation as per EPWP 2= 1000to <2000 2= 1000to <2000
policy 3= 2000 to <2600 3= 2000 to <2700
Temporary 4= 2600 to <3000 4= 2700 to <3200
5= 3000 & above 5= 3200 & above
*Fatalities (Public) Controllable No 0 0 0
Fatalities (Public) Non- No 4 0 0
Controllable
Days 3.37 As per NRS As per NRS
1 = above 4 Days 1 = above 4 Days
Average time taken for City
2 = 4 Days 2 = 4 Days
Power to resolve queries that
3= 3 Days 3= 3 Days
are referred to them
4= 2 Days 4= 2 Days
5= Below 2 Days 5= Below 2 Days
% New indicator 1 = below 7 1 = below 7
2 = 7 to < 9 2 = 7 to < 9
% Reduction in electricity
3 = 9 to < 11 3 = 9 to < 11
consumption
4 = 11 to < 13, 4 = 11 to < 13,
5 = 13 & above 5 = 13 & above
Opex spent on maintenance % 15.8 13.04 12.6
programmes as a percentage of
overall Opex budget
Capex spent on network as a % 98 95 95
percentage of the overall Capex
budget
% of ME’s capital budget spent % 100 100 100
% Variance against ME’s % 0 0 0
operating budget
Reconciliation of inter company % 100 100 100
balances with the CoJ
Reconciliation of intra company % 100 100 100
balances with other ME’s
Fully SA GAAP compliant % 100 100 100
register of assets
1= unqualified audit report = unqualified audit report
% Attainment of clean audit with matters of emphasis, with matters of emphasis,
report attained by MOE material adjustment and material adjustment and
other matters other matters

2=Unqualified audit with 2=Unqualified audit with
matter of emphasis and other matter of emphasis and
matters other matters
3= Unqualified audit with 3= Unqualified audit with
matters of emphasis matters of emphasis
4= Unqualified audit with 4= Unqualified audit with
other matter other matter
5=Unqualified audit report 5=Unqualified audit report
with no matters (Full with no matters (Full
Compliance) Compliance)
* Controllable fatalities, any thing more than 0 = no score for that KPI

SECTION 6: RISK MANAGEMENT AND INTERNAL CONTROLS
6.1 Overview
Effective risk management is integral to the company’s objective of consistently adding value.
Management is continuously developing and enhancing its risk and control procedures to improve the
mechanisms for identifying and monitoring risks.
Operating risk is the potential for loss to occur through a breakdown in control, information, business
processes and compliance systems. Key policies and procedures are in place to manage operating risk
and involve segregation of duties, transaction authorisation, supervision, monitoring and financial and
managerial reporting. Financial risk management is dealt with in the financial statements.
In order to meet its responsibility with respect to providing reliable financial information, City Power
maintains financial and operational systems of internal controls. These controls are designed to provide
reasonable assurance that transactions are concluded in accordance with management authority, that the
assets are adequately protected against material loss or unauthorised acquisition, use or disposal and the
transactions are properly authorised and recorded. The system includes a documented organisation
structure and divisions of responsibility, established policies and procedures, including a code of ethics
to foster a strong ethical climate. The system also includes the careful selection, training and
development of people.
Internal auditors monitor the operation of the internal control systems, risk management, governance and
report findings and recommendations to management and the Board of Directors. Corrective actions are
taken to address control deficiencies and other opportunities for improving the system. The Board,
operating through its audit committee, provides supervision of the financial reporting process and
internal control systems.
There are inherent limitations in the effectiveness of any system of internal control, including the
possibility of human error and the circumvention or overriding of controls. Even an effective internal
control system can, accordingly, provide only reasonable assurance with respect to the preparation of
financial statements and the safeguarding of assets. The effectiveness of internal control systems can
furthermore change with circumstances.
A documented and tested business continuity plan exists to ensure the continuity of business-critical
activities.
The company assessed its internal control systems in relation to the criteria for effective internal control
over financial reporting described in its internal control manual. The internal control process has been in
place up to the date of approval of the annual report and financial statements. Based on its assessment,
the company believes that, as at 30 June 2008, it’s system of internal control over financial reporting and
the safeguarding of assets against unauthorised acquisitions, use or disposition, met the requisite criteria.

6.2 Risk Management Process
6.2.1 Background
City Power is a Municipal Owned Enterprise (MOE), owned by the City of Johannesburg (COJ) and as
such City Power is continuously ensuring alignment and compliance to COJ requirements. City Power’s
Risk Management process is aligned and has adopted the COJ Risk Management Framework.
6.2.2 Broad Definition

‘Risk’ is defined as an event that may have an impact on the ability of the company to achieve its
business objectives.
6.2.3 Risk Management Process

City Power's Risk Management process has four broad steps:
• Risk identification
• Risk Assessment and treatment
• Monitoring and Reporting
• Auditing
Figure 6.1: Risk Management Process
Risk
Risk
Identification Assessment and
treatment
Monitoring and
reporting
Auditing

6.2.3.1 Risk Identification
The City Power risk identification process is aligned to the COJ framework. The company risks are
identified annually and they form part of the risk register. These risks are influenced by the executive
committee, taken for the Audit Committee of the board and then approved by the board. The approved
risks are then incorporate in the business plan.
6.2.3.2 Risk Assessment and Treatment
Once risks have been identified, they must then be subjected to a consistent assessment process to ensure
that City Power achieves an objective and holistic result that can inform its risk profile.
Risk is measured in two ways:

• By the likelihood or frequency of the risk occurring
• By the severity / impact on City Power of the risk occurring
The City of Johannesburg has developed a two-stage assessment process to assess and quantify the
identified risks.
6.2.3.2.1 Stage One – Impact and likelihood
The first stage involves an assessment of the potential impact (or severity) of each risk, and then the
likelihood of the event actually occurring. Each risk is scored on a scale of one to five. Table 6.1: shows
the criteria used to assess the potential Impact / Severity of each risk occurring
Table 6.1: The criteria used to assess the potential Impact / Severity of each risk occurring
Assessment of Impact / Severity
Financial Reputation Stakeholders Customers
Event would Contained within the individual Employees may have Customers may have been
have little service area. From a regulatory suffered minor first minimally impacted. Event
Not significant
financial perspective, minor fines or penalties aid injuries. Event may impact minimally on a
1
impact on may have been suffered. may have resulted in performance target
either income localised staff morale achievement.
or budget problems.

Assessment of Impact / Severity
Financial Reputation Stakeholders Customers
Event would Affects a significant number of the Employees may have Event may impact on a
have moderate service areas but with likely short- suffered temporary performance target
financial term impact on public memory. disabling injuries. achievement where a major
impact (> 2% From a regulatory perspective fines Event may have milestone was missed by
2 –
on or penalties > R50k may have been resulted in staff loss, more than 1 month
3
budget/income suffered. Customers may have been causing minor to impacting on a client
on either impacted so that complaints result in moderate segment.
income or media coverage (suburban consequences.
Minor
budget. newspaper).
Event would Regulator inquiry with medium term Employees may have Event may impact on a
have serious impact on public memory. From a suffered multiple performance target
financial regulatory perspective fines or temporary disabling achievement where a major
impact (> 4 - penalties > R100k may have been injuries. Event may milestone was missed by
4 – 6% on suffered. Customers may have been have resulted in staff more than 3 months and
5 budget/income impacted so that complaints result in loss, causing serious subsequent interruption over
on either media coverage (local newspaper consequences. several days to customers.
Moderate
income or not front page).

budget.
Event would Medium term public impact with Employees may have Event may impact on a
have very minor political implications. From a suffered multiple performance target
serious regulatory perspective fines or permanent disabling achievement where a major
financial penalties > R150k may have been injuries. Event may milestone was missed by
6 – impact (> 8% suffered. Customers may have been have resulted in staff more than 6 months,
7 on impacted so that complaints result in loss, causing very resulting in a major customer
budget/income media coverage (national TV serious consequences. impact.
on either headlines) and loss of service >1
income or month.
Major
budget.
Event would Long term impact on public Employees may have Event may impact on a
have memory and major political suffered fatalities. performance target
Catastrophic implications. From a regulatory Event may have achievement where a major
financial perspective fines or penalties > resulted in staff loss, milestone was missed by
8 – impact (> 15 to R500k may have been suffered. causing catastrophic more than 8 months to over 1
9 25% on Customers may have been impacted consequences. year.
budget/income so that complaints result in media
Catastrophic
on either coverage (national TV headlines)

income or and loss of service >6 month.
budget.

Table 6.2 shows the criteria used to assess the likelihood of the risk occurring:
Table 6.2: The criteria used to assess the likelihood of the risk occurring
Likelihood Description Probability

Descriptor
Almost Certain – Event has occurred within the last year The event is certain to occur within
8-9 repeatedly. this financial year.
Event has occurred within the last financial The event is likely to occur within this
Likely – 6-7
year. financial year.
The event has a probability of occurring at Event has been recoded within
Possible – 4-5 some time, in the next year. organisation as well as within the
sector in the last 2 years.
Very few recorded or known incidents. The event may occur at some time,
Reasonable opportunity to occur or has within the next 2 years.
Unlikely – 2-3
occurred within other organisations within
sector.
Event may occur in exceptional circumstances. No event recorded in the last 3 years.
No recorded incidents or little opportunity for
Rare - 1 occurrence.
The product of this stage one assessment of impact and likelihood is an "Inherent Risk Score", which
can range from a minimum of 1 to a maximum of 25, by multiplying the frequency and impact scores.
6.2.3.2.2 Stage two – Development of Risk Drivers and Risk Casual Model
Risk drivers are those elements which tend to be the cause of the risk occurring. Risk drivers are a key
process in risk management as they provide an in-depth understanding of the risk. Analysis of the
drivers’ lead to the effective monitoring of the risk, as well as the development of controls to mitigate or
manage the risk. These will be measured and monitored as per the next phase of this project. The
formulation of risk drivers is to assist with the understanding of the risk (i.e. make the risk more
tangible) and in the formulation of controls, both pre- and post and to manage / minimise the risk drivers,
which in turn reduces the overall headline risk. If the drivers are not identified, then the process only
provides a snapshot of the risks at a point in time.
6.2.3.3 Monitoring and Reporting
• Monthly, quarterly and annual reporting on progress with status of action items.
6.2.3.4 Auditing
• This process will be audited continuously.

6.3 City Power’s Top 13 Risks
Using the above process City Power has identified to 13 risks and developed mitigating strategies for
each of the risks on table 6.2 below.
Table 6.3: City Power’s Top 13 Risks
Strategic
Risk Actions to improve
risk Background to the risk Current controls
Description management of the risk
Number
1 Cable theft Increase in copper price Beefed up security in hot Invest more in information
led to increase in spot areas. Increase in the technology solutions.
network tempering and rollout of CCTV cameras.
vandalism
2 Kelvin Power • High pass through Penalties on poor Management of the current
costs as a result of delivery. Hold monthly controls.
poor efficiencies - meetings
relates to fixed and
variable costs.
• Inability of Kelvin
Power Substation to
supply at required
levels in terms of the
PPA
3 Eskom's • Eskom’s failure to City Power has applied Investigating alternative sources
Capacity supply (generation for increased capacity of energy e.g. Piloting Solar
problems and transmission) from Eskom. Powered Streetlights.
Investigating distributed
• Ability of the Eskom generation options.
network to sustain the Implementing DSM
new capacity demand. Programme. Resuscitate
Gas Turbines.
4 Business's • Unable to meet the Looking at Alternative KFW (German Bank)'s

inability to GDS , IDP ,and sources of funding. PPP, consultant in South Africa has
fund high Business Plan Revenue generating met with Treasury. The City's
capital and targets including projects, Additional Grant CFO has agreed to isolate this
operational electrification, 2010, Funding. issue to the rest of the City's
requirements Inner city project, process. Awaiting approval at
out of current public light, etc the next Lekgotla.
cash flows nor
future tariff • Unable to refurbish
applications the aging network at
an acceptable rate
• Not enough funds to

Strategic
Number
upgrade the network
e.g 4th and 5th
intake points .
Compliance to
MFMA
requirements.
5 • Alignment with the Reinforcing partnership Capacitation of the Wellness

Mayoral Priority. with COJ. Increase access Department.
Increased to their Helpline.
Provision of immune
Impact of • Absenteeism due to boosters and nutrition.
HIV/AIDS on sick leave, impacting Dispense and administer
productivity in on overall ARV's
the company performance.
6 Non - • Meter tampering. Meter Tampering - Semi Established a Revenue

technical AMR and Tamper Proof Protection Department to ensure
losses • Illegal Connections. meters with protective the implementation and
structures have been effectiveness of the Controls.
• Faulty Meters and installed. Illegal
no-access, therefore Connections have been
unable to bill removed and replaced
customers with tamper proof meters
with protective structures.
Currently utilising JMPD
to enforce by-laws.
Continuous Audits.
7 Customer Causes include: outages, The Call Centre and Improved Shift Roster, Call
satisfaction capacity demanded Walk-In Centres have Resolution and Navigation.
levels resulting in low level of been capacitated. Increased the number of Service
positive public opinion Ongoing training for Call Providers to allow for a better
(company image ) Centre, Walk-In Centre footprint. ( Vending Machines )
and Billing employees.
More accessibility to
customers and increased
number of vending
stations.
8 Management Issues relating to the Conversion from Management of the SLA and the
of Domestic management of credit conventional to prepaid. conversion from conventional to
Revenue control for domestic Manage the Service Level pre-paid.
Collection accounts. Agreement with the City.

Strategic
Number
9 Network • Age of the network • Capital investment • Crime Intelligence needs to

interruptions programme in place be improved.
• Uncontrollable
events such as • Crime Intelligence • Access controls to be
insufficient capital (Risk Control). Way increased on the Load
for upgrading and leave processes and Centres.
refurbishment of implementation of the
MV and LV network Asset Management • Penalties to be put in place
Maintenance system. for 3rd parties damaging our
network.
10 Organisational Establishment of Engage relevant Engage relevant stakeholders

change due to Phakama and the stakeholders and staff and staff communication.
restructuring implications thereof on communication
staff morale and
productivity
11 Not achieving Previous Years Qualified Actively addressing all Corrective action implemented
an unqualified Audit Report. Mayoral issues raised in the and monitored on a monthly
audit report Priority. previous year's basis.
Management Report.
12 Impact of the • New areas of supply EDI Restructuring Implementing the current
Restructuring – the burden new workgroups has been controls.
of the areas of supply will established.
Electricity put on existing
Industry resources
• Impact of new areas

of supply on
profitability
• Employee
productivity about
implications of EDI
restructuring.
Different standards
and tariffs.
13 Insufficient • Ineffective talent Prioritisation of skills Formulating a training strategy

Skills capacity management. focus. Create a pool for that supports core functions of
to support the Insufficient skills talent release. the business. Centralisation of
business. pool. Capacitating the skills the budget. Implementation of
level. the Retention Strategy.
Definition of critical skills.


SECTION 7: FINANCIALS
7.1. Capital Expenditure
7.1.1 Infrastructure & Service Delivery Capital Plan

Background
City Power is currently faced with the enormous task of addressing the following challenges:
• Reducing the average age of our transmission and distribution network where it is in excess of
40 years through refurbishment and replacement
• Obsolete and unreliable equipment for which we are no longer able to obtain spares
• Addressing and improving safety on the network i.e. replacement of high risk equipment
• A network that, due to densification, has in many areas exceeded its firm capacity and in some
instances reached its installed capacity
• Reduction in outages and restoration times to restore power following outages
• Increased economic activity which will lead to increased demand on our networks
• Extending the transmission and distribution networks in support of new development, the
electrification programme and projected 9% growth rate
• Dramatic increase in the cost of key resources i.e. labour and materials
• Meeting the Mayoral priorities i.e. Inner City, BRT,
• Alignment with the City GDS
• Upgrading of the networks to ensure a reliable supply for 2010
• Provision of capacity in support of the Gautrain
• Increasing backlogs due to insufficient capital
Long Term Capital Budget Indicatives
Table 7.1 below shows the capital budget for City Power.
Table 7.1: Long Term Capital budget
06/07 07/08 08/09 09/10 10/11 11/12 12/13
Measure Indicator Unit Actual Actual Plan Plan Plan Plan Plan
Network Assets R m 886.7 1009.4 957.5 786.37 753.02 731.04 731.04
Other Assets R m 42.6 25.4 43.00 39.50 39.50 37.50 37.50
Total R m 929.3 1034.9 1001.2 825.87 792.52 768.54 768.54
5 year Capital Requirements
City Power developed a 5 year rolling capital plan, table 7.2 below outlines the five (5) year
requirements based on the projects identified from the five year master plan.
Table 7.2: 5 year capital requirements

Five (5) year Capital Plan
Financial Year 2008/9 2009/10 2010/11 2011/12 2012/13 2013/14
R'000 RX1000 RX1000 RX1000 RX1000 RX1000 RX1000
Requirements 3,394,000 3,714,744 2,504,000 1,289,035 569,935 570,000

Funding Requirements for Revenue maximization Projects

Revenue Maximization projects Unit Type 2009/10 2010/11
Re-commissioning by-passed meters Rm Opex 23
Removal of illegal connections Rm Opex 30 30
Data and technical audits: CT's and VTs for LPUs Rm Capex 95
Intensify credit control measures Rm Opex 30 30
Convert to pre-payment smart meters Rm Capex 750 750
Convert to pre-payment smart meters Rm Opex 50 50
Protective structures Rm Capex 100 100
Roll out Automated metering (LPU) Rm Capex 20 20
TOTAL Rm 1098 980
Funding Requirements 2009/10
Table 7.3 below outlines the budget requirements for 2009/10 financial based on the projects already
committed and projects which are critical for sustainability of the company going forward.
Contractually committed,
Funding requirements 2009/10 directly linked to and Urgent Important Total
Critical
X R1000 X R1000 X R1000 X R1000
Bulk Infrastructure 374,800 361,500 523,500 1,259,800

Bulk Infrastructure - Electrification 177,174 0 0 177,174
Electrification 95,100 0 0 95,100
Fire and Security 0 30,500 0 30,500
DSM/Load Management 239,500 0 0 239,500
Meters 102,000 0 150,000 252,000
Network Development 15,000 3,200 153,310 171,510
Network Development - Electrification 20,000 0 0 20,000
Operating Capital 37,500 0 24,760 62,260
Plant and Equipment 30,000 0 3,000 33,000
Protection 20,000 5,000 0 25,000
Public Lighting 97,500 0 20,000 117,500
SCADA 15,000 0 7,000 22,000
Service Connections 105,580 0 0 105,580
Telecommunication 2,500 0 3,150 5,650
Township Reticulation 0 0 18,000 18,000
Upgrading of the Network 222,500 19,200 629,970 871,670
Buildings (OMC) 0 0 45,000 45,000
Support Services 20,000 0 30,000 50,000
Contractually committed,
Funding requirements 2009/10 directly linked to and Urgent Important Total
Critical
X R1000 X R1000 X R1000 X R1000
Other (Fencing, Hostels, COJ Bdg's, etc) 0 0 109,000 109,000

Total 1,574,154 419,400 1,716,690 3,710,244
2009/10 Allocation of budget
Table 7.4 highlights the comparison of the total budget requirements for 2009/10 vs. the proposed
indicative budget allocation. If only the indicative budget is allocated, it must be noted that a further
R3.1bn backlog will be created which will put more pressure on 2010/11 financial year budget
requirements and might result in some commitments not being honoured by City Power.
Table 7.4: 2009/10 allocations

Description Budget (R'000)
Total Requirements 3,710,244
Indicatives budget allocation 825,871
Deficit 2,884,373
CAPEX Fund Allocation
The allocation of funding is largely driven and prioritised by the City’s Capital Investment Management
System (CIMS). This looks at Mayoral initiatives i.e. Inner City, Bus Rapid Transport (BRT), 2010,
Gautrain, Social Projects etc.
From a City Power perspective we also use the following criteria:

• Quality of Supply
• Safety
• Return on investment
• Interdependence
• Increasing network availability – visible reduction in outages
• Decrease in maintenance costs
• Social benefits of project
• Revenue generation
CAPEX Allocation impact
The City of Joburg has indicated a budget allocation of R 825.871m including non-controllable and City
Power’s own funding for the 2009/10 financial year. Once the above indicative budget has been
approved at a budget Lekgotla, a further prioritisation will be done to fit the critical projects within the
final budget allocation. The business plan will be amended accordingly. Based on the indicative budget
allocation the following projects will have to be deferred. The table below indicates projects to be
deferred and the associated risks.

Bulk Infrastructure
Table 7.5: shows the deferred bulk infrastructure projects.
Table 7.5: Deferred bulk infrastructure projects

Substation/
Description 2009 / 2010 Motivation / Risk
Township
Transmission: Orlando Switching Station -
Replace all 88kV switchgear with compact Voltage instability of the 88 kV grid will
Quattro 100,000,000
gas insulated switchgear and introduce prevail by 2010.
275kV
Voltage instability of the 88 kV grid will
prevail by 2010 compounded by the
Transmission: Kelvin - Build a new 275/ unreliable Kelvin PS supply. Development
Sebenza 88kV yard at Sebenza and demolish existing 100,000,000 in the Greater Modderfontein, Alexandra
yard and Johannesburg Northern suburbs (Atholl
Inanda, Houghton etc) will have to be
curtailed.
We will not be able to proceed with the
refurbishment and replacement of high risk
Tranformer Capital Programme to eliminate
All 10,000,000 transformers. A commitment was made to
high risk transformers.
Exco and the Board to improve system
performance and to reduce outages.
We will not be able to proceed with the
refurbishment and replacement of high risk
Switchgear Capital Programme to replace
All 25,000,000 and aged switchgear. A commitment was
aged and critical switchgear
made to Exco and the Board to improve
system performance and to reduce outages.
We will not be able to acquire servitude
The acquisition of servitudes and sub station timeously for future transmission lines and
Servitudes 20,000,000
sites sub stations. This will have a cost
implication.
Replacement of obsolete 88 kV surge Safety risk, continuity of supply and risk of
All 2,500,000
arresters at major sub stations damage to equipment due to lightning.
The HV equipment in the sub station is
Earthing and lightning protection at all major prone to lightning damage which can result
All 5,500,000
sub stations in unnecessary outages and equipment
failure.
Mondeor
Finalise Riverlea servitude 3,000,000
switch yard
Beyers Sub
Install two additional 88/11 kV transformers Unable to deload Christiaan de Wet
Station phase 25,000,000
and one 11 kV feederboard Rooseveld sub stations.
2.
New 88/11 kV substation, 2 X 40 MVA
Fourteenth Unable to support new developments in
transformers, feeder board and 88 kV cables 110,000,000
Avenue Constantia area.
from Beyers sub station.
Transmission: Install 3 rd transformer, Exceed fim capacity, Busbar must be
extend the existing switchroom and install created to accept 88 kV supply from Eskom
Nirvana 30,000,000
additional 11kV switchgear. Install 88 kV to improve the system stability to Orlando
busbar to accommodate infeed from Etna. switching station.
Unable to transport transformers in case of
Lotus Construct Access Road 5,000,000
a fault.
Unable to transport transformers in case of
Lunar Construct Access Road 2,000,000
a fault.
Substation/
Township
Devland sub - New 88/11 kV 2 X 45 MVA
substation to replace Baragwanath, Soweto
Devland and Soweto Local and acquire substation 12,000,000
servitude (Required to feed JDA Ikhaya
Project)
Lenasia South Sub. Do away with Jericho
Lenasia Firm capacity exceeded and unable to
scheme. Additional 40 MVA transformer. 17,000,000
South supply new electrification projects.
Extend 11 kV feederboard.
Transmission: Establishment of 88/11kV
Isidleke 1,000,000
substation
Phase 1 Laying of 11kV from Westfield to
Isidleke Isidleki and provision of 17 x panel 11kV 15,000,000
switchroom & switchboard
Transmission: Provision of servitudes and Unable to support new developments in
Newmarket 6,000,000
establish of new 2x45MVA 88/11kV S/S Kyasands.
Transmission: Establish new 88/11 kV S/S
Oakdene 55,000,000
Columbine off the M2 Motorway Phase 1
Transmission: Establish new 88/11kV S/S (2
Edgardale 5,000,000
x 45MVA TRX's)
The firm supply to Rand Water Board
New Mondeor Switching Station if fourth supply at risk. Also to provide
Mondeor 75,000,000
intake point is at Orlando. interconnectivity between Prospect and
Orlando.
Transmission: Replace "Dumpy" feeder
Wilro Park 2,000,000 Safety risk.
board
Transmission: Provision of servitudes, build
new 88 kV Zebra line from the existing
Princess New developments in the area cannot be
Roodetown - Kloofendal circuit and Build 49,000,000
Crossing supplied.
new 88/11 kV 2 X 40 MVA sub station with
1x11kV feederboard.
Transmission: Install 1X40MVA New developments in the area cannot be
Robertville 30,000,000
transformer and feeder board. supplied.
Roodepoort Sub - replace 5x33kV CB
Roodepoort replace 10x33kV IL replace 15x6,6kV 15,000,000
switchgear, refurbishment.
Construct the interconnecting lines. The
Lutz - Dalkeith. New twin Zebra lines from
Lutz 54,000,000 transmission lines between Kloofendal and
Peter Road to Lutz and Dalkeith sub station.
Peter Road are at risk (over firm capacity).
Lutz Sub Construct new 88/11 kV 3 X 45 MVA sub

55,000,000
station station.
Cleveland Sub - Busbar reconfiguration,

replace I high risk transformer and install Aged 20 kV transformers and switchgear
Cleveland 25,000,000
additional 45MVA transformer and feeder cannot be decommissioned.
board. Decommission 20 kV networks.
Kelvin- Upgrade the existing 88 kV lines between
Cannot take full load at Alexandra sub
Alexandra- Kelvin, Alexandra and Cydna from 100 80,000,000
station.
Cydna MVA to 200 MVA
Consultants cannot be appointed to design
All Pre Engineering design of sub stations 6,000,000
new sub stations

Meters
Table 7.6 shows the deferred meters projects.
Table 7.6: Deferred meters projects

Substation/
Description 2009 / 2010 Risk
Township
Metering: Replace obsolete energy kwh
All areas meters & purchase of energy meters for new 30,000,000
installations (single, three phase and prepaid)
The routers have been purchased and
Revenue Generation Efficiency Project. Pre- installed at the customer's mini subs.
All paid system installation of Semi automated 30,000,000 Communication has been done.
pre-paid & automated pre-paid There are customers on free mode in
both Dainfern and Eagle Canyon.
The installation of statistical meters on
All 20,000,000
distributors
All areas City wide pre paid roll out 70,000,000
All areas Domestic AMR roll out 30,000,000 Reduced from R 30 M to R 10 M
Eldorado Park and Installation of pre paid meters and protective
40,000,000 Reduced from R 40 M to R 10 M
Lenasia structures.
Installation of pre paid meters in Naturena
Naturena 20,000,000 Reduced from R 20 M to R 10 M
and sectional title flats.
Upgrade of Network
Table 7.7: shows the deferred network upgrade projects.
7.7: Deferred network upgrade projects

Substation/
Township
The MV networks must be
upgraded to accommodate new
Alexandra Alexandra Upgrading of MV infrastructure 2,000,000
developments. This affects
revenue generation.
Can be postponed to 2010/11.
Temporary relief was achieved
Load relief interconnectors between Vasco through another project. There are
Alexandra 12,000,000
Da Gama and Rooseveld however a number of
developments in the area which
must be supplied.
Khanyisa sub station in Bryanston
will be complete by February
2010. The 6.6 kV network in the
Replace feeder cables and 6.6kV load centres area must be converted to 11 kV
Bryanston with dual ratio mini's and transfer load to 33,000,000 and transferred to the new sub
Khanyisa sub station. station. This will relieve load off
Brynorth sub station where we
exceed the allocated capacity
from Eskom.
Rembrand Park Build new switching station and feed 4,000,000 The existing sub station is at full
Substation/
Township
& Lyndhurst existing distributors from new switching stn. capacity and no new
East developments can be supplied.
Replacement of 95 mm (0.15") cables The existing distributors are
between N694 & Bramley G TSS (Erf 157 derated due to the 95 mm cable in
Gresswold 1,500,000
New Av & Helen Rd) in Kew Central with the circuit. This limits the load
185 mm due to overload transfer.
The existing distributors are
Replacement of 95 mm (0.15") feeders with
derated due to the 95 mm cable in
Hyde Park 185 mm between Hyde Park 6th Road and 2,000,000
the circuit. This limits the load
Hyde Park TSS
transfer.
Elton Hill Replace bare OHL with ABC 2,500,000
Large trees makes line
Waverley Replace bare OHL with ABC 1,000,000
maintenance difficult.
Hyde Park Underground bare overhead mains. 4,500,000 No double earthing on the lines
Large trees makes line
Bramley Park Underground bare overhead mains. 2,500,000
maintenance difficult.
The overhead lines must be
Kew Underground bare overhead mains. 7,000,000 undergrounded to reduce theft of
electricity.
Replacement of link cabinets in the Kew Public and operator safety is a
Alexandra 4,000,000
Depot area. serious concern.
These pillar boxes are on the
pavement and have been
Siemert Elimination of MV pillar boxes 3,000,000
damaged. They pose a serious
safety risk to the public.
New developments and upgrading
of supply is not possible in
Third Leg required between Fabric City and Richards Drive and Old Pretoria
Halfway House 2,100,000
Midas std 365 Road south of Le Roux Drive.
This has an impact on revenue
generation.
Split back to back feed cables between
This is a critical part of the
Bekker St and Boulders S/S at James
James Crescent 2,000,000 feedback system and restoration
Crescent. Install additional feeder between
times are affected.
Grand Central and James Crescent
Unable to cater for new
developments. The existing
Upgrade the MV and LV network in system is severely overloaded and
Kyalami Estates 8,000,000
Kyalami Estates. excessive outages occur in winter.
There are a number of sensitive
customers in this area.
Northern
Closing of spurs 3,000,000
Region
Northern Re inforcement of overloaded MV
12,000,000
Region infrastructure (winter load readings)
Turnkey project to replace LV open wire
Northern
overhead systems with ABC in problematic 15,000,000
Region
areas.
Road widening affects the safety
Complete U/G of LV OHL Bryanston Drive of our overhead lines. This
Bryanston 2,000,000
(Theft of O/H mains prevalent in this area) project also contributes to the
general upliftment of the area.
Maroeladal Upgrading single phase LV networks 1,500,000 The LV networks are overloaded,
Substation/
Township
Maroeladal resulting in damage to equipment
and customer appliances.
Selkirk Feeder overloaded - reconfiguration
Randburg 3,000,000 Same as Kelland
& upgrade
Garden feeder Overloaded - strengthen Unable to cater for new
Bordeaux 1,320,000
feeder developments.
We do not have N-1 Contingency
on the 6.6 kV network which
Westminster and Brynorth Main feeders
Bryanston 3,800,000 result in extended restoration
overloaded - reconfiguration and upgrade
times under fault conditions. New
developments are also curtailed.
We do not have N-1 Contingency
on the 6.6 kV network which
Kingswood & Country Life feeders
Bryanston 6,000,000 result in extended restoration
overloaded - reconfiguration & upgrade
times under fault conditions. New
developments are also curtailed.
Bryanston Borrowdale feeder ring not firm - upgrade 5,000,000 Extended restoration time
Belgrave & Chesterfield Ring not firm -
Bryanston 3,200,000 Extended restoration time
upgrade
St Audley & Cresant Flats ring not firm -
Bryanston 2,500,000 Can be postponed to 2010/11
upgrade
Baker & Portman feeders overloaded -
Brynorth 7,000,000 Can be postponed to 2010/11
reconfiguration and upgrade
Goede Hoop/Culemburg Ring not firm -
Hurlingham 5,000,000 Extended restoration time
strengthening
Morningside Parkmore feeder overloaded - upgrade 4,134,000 Extended restoration time
River Club feeder overloaded -
Morningside 3,871,000 Extended restoration time
reconfiguration and upgrade
Alon feeder overloaded - reconfiguration and
Randburg 4,300,000 Can be postponed to 2010/11
upgrade
Randburg Conrad Feeder overloaded -
upgrade
Malanshof and Annie feeder overloaded -
upgrade
Underground LV overhead lines in
Robindale 4,000,000 Can be postponed to 2010/11
Robindale/Hills
Underground LV overhead lines in Bordeaux
Bordeaux 5,000,000 Can be postponed to 2010/11
& Blairgowrie
Underground LV overhead lines in
Malanshof 2,600,000 Can be postponed to 2010/11
Malanshof and Fontainebleau
The sub station and feeder loads
are above firm capacity and
Bordeaux Bordeaux 11 kV conversion. 5,000,000 constitutes a safety risk and
extensive restoration times for
customers under fault conditions.
Underground 11 kV OHL in Northumberland Critical part of feedback system -
Northriding 3,000,000
Ave with 1600 m 185 x 3 cable restoration time
Northriding Close Ascot & Hans Strydom ring 11,000,000 Restoration time
Establish standby supply, Conduit,
Northriding Amsterdam & Johannesburg North from 19,000,000 Restoration time
School Street
Reinforce and reconfigure Kelland N-1 will not be reinstated on the
Randburg 6,200,000
distributor 6.6 kV distributors which may
Substation/
Township
result in extended restoration
times under fault conditions.
Additional capacity is required
for new developments.
Preparation of MSS's and Load Centres for
Central 8,250,000
11kV conversion ( 0 MSS & 71 L/C)
Van Beek 11kV conversion ( 5 MSS & 75 L/C) plus 12,000,000
upgrade cables
Ellis Park
LV and MV upgrade phase 1 12,500,000
Precinct
New Jeppe standby distributor for
Cleveland 3,000,000
Jeppestown and Troyville
Replace 95mm (0.15 inch) on Houghton Dx
Cydna 1,000,000
with 185mm and close spur.
Replacement of 95 mm (0.15") cables with
Orchards 1,000,000
185 mm - Norwood Dist. Overload
Bruma Upgrade LV networks 1,100,000
Bez Valley Upgrade LV networks 10,000,000
Cyrildene Upgrade LV networks 6,400,000
Bellevue Upgrade LV networks 3,000,000
Oaklands Upgrade LV networks 1,000,000
Fordsburg Upgrade LV networks 2,000,000
Fairwood Upgrade LV networks 1,800,000
Fairview Upgrade LV networks 540,000
Cleveland Upgrade LV networks 3,500,000
Upgrade and reinforce various distributors in
Cleveland 9,000,000
Cleveland
Cydna Upgrade Houghton Golf Course network 4,200,000
Fort Upgrade Girton Road distributor 1,800,000
Siemert Project to reduce outages by 50% 10,000,000
Replace 50 mm cable between MSS N401 &
MSS N562 and between TSS Oxford Road &
Melrose 3,000,000
Cecil Road on the North Distributor from
Cydna sub station
Fordsburg Establish new Fordsburg Central distributor 1,000,000
Herriotdale Upgrade MV network 3,600,000
Denver Upgrade MV network 8,000,000
Cleveland Establish RMU's and reconfigure distributors 7,000,000
Establish standby distributor for Parktown
Parktown 2,000,000
West
Upgrade MV distributors and sub rings from
Observatory 20,000,000
Observatory sub station.
Reinforce Richrds Drive ring from Halfway
Halfway House
House 41 by installing a RMU in the K101 600,000
41
traffic light circuit.
All areas Replace Service Cables 2,000,000
Elimination of spur feeds to reduce outage
All areas 4,000,000
restoration time
Substations &
Install maximum demand meters 1,000,000
Satelite S/S's
Vrededorp Decommision Vrededorp Satellite sub station 6,000,000
Substation/
Township
and replace with outdoor switchgear.
Upgrade of MV and LV infrastructure:
Hursthill 10,000,000
Master plan
Replacement of cable sections with 185 mm
Dunkeld 2,000,000
- Dunkeld W Dist
Replace 0.06 cable between TSS Norman
Cres & TSS Joseph Ave (6 MSS's) and
Northcliff North 3,000,000
between HVC2 & TSS Joseph Ave on
Berrario standby distributor with 185 mm
Install new distributors to strengthen the MV
Newlands 2,500,000
network in Newlands.
Strengthening of MV network in Craighall
Craighall Park 4,500,000
Park
Vlakfontein - Provision of Sectionalisers and
Vlakfontein 3,000,000
backfeed
Eldorado Park Klipspruit West Ext 2 Dist backfeed req 1,200,000
Ennerdale Unaville O/H line Backfeed req 600,000
Lenasia 5,000,000
Lotus Kiasha Park Distributor overloaded 4,000,000
Relocate MV cable between MSS 3 and
Nirvana 1,500,000
HVC 54
Baragwanath 11kV includind Baragwanath 25,000,000
Hospital.conversion ( 1 MSS & 8 L/C)
LV Pole and overhead line replacement (with
Lenasia 4,000,000
ABC)
Upgrade overloaded 315 kVA MSS's to 500
Lenasia 2,000,000
kVA (32)
Install sectionalisers, autoreclosers &
Unaville pathfinders on Lenasia/Unaville overhead 2,000,000
line.
Eldorado Replace loop in system 4,000,000
Lenasia X 5 Replace pillar boxes and loop in system 5,000,000
Lenasia X 2 Replace loop in system 5,000,000
Selby 11,000,000
Kibler Park 11kV overhead line to Concrushers 5,000,000
Meredale. Preparation of MSS's and Load
Mondeor Centres for 11kV conversion (18 MSS & 16 6,500,000
L/C)
Upgrade overloaded load centres. TSS 112,
Forest Hill 2,000,000
TSS 114 & MSS 42
Rosettenville Relieve overload on Zinnia/Prairy sub ring. 4,000,000
1. TSS 82 overloaded, upgrade from 2 X 315
kVA to 1 MVA. 2. Data Cres distributor
Robertsham overloaded, install extra distributor. 3. 5,000,000
Complete ring to MSS 93 on Ridgeway
distributor.
Rossetenville, Haddon & Turffontein South
Wemmer distributors overloaded. Install extra 5,000,000
distributors.

Substation/
Township
Install new 185 mm distributor from
Wemmer 6,000,000
Wemmer to the Hill (South Rand Hospital)
Upgrade and reconfigure network to allow
Robertsham 1,500,000
additional capacity at Evans Park.
Upgrade and reconfigure network to allow
Mulbarton 5,000,000
for new service connection
Replace MSS with no switchgear at strategic
Roodepoort 2,000,000
points initially
Local rings need to be strengthened due to
Penny Street 1,200,000
loading
Penny Street General Pienaar sub Distributor 600,000
Penny Street Witpoortjie Gardens 450,000
Penny Street Barbara Flats distributor 450,000
Transmission: Dumpy feeder board needs
Panorama 4,000,000
replacement
Poortview Upgrade / underground MV OH line 10,000,000
Florida,
Discovery, Replace oh lines with ABC 3,000,000
Georginia
Short str ss Replace switchgear & transformer 1,000,000
Maraisburg park
Replace existing circuit breakers 1,500,000
6,6 kv ss
Replace existing feeder from Florida Glen
Florida Glen Switcing station to Drakens switching stn, 7,180,000
7th Avenue & Banfield
Florida North
switching ss to
Replace existing feeder cables 3,000,000
Maraisburg
Park
Florida Replace existing MV areas < 70mm al 365,000
Replace 70 mm Al from Fredenharry to Lone
Florin 1,500,000
creek with 95 mm cu
Refurbish Honeydew North and Bothma Str
Honeydew 4,000,000
OHL
Maraisburg Replace OHL with underground cable.
1,500,000
Park Capacity of OHL exceeded and unreliable.
Install 4 MV cables from Kloofendal sub
Kloofendal 4,000,000
station to Helderkruin switching station.
Close spur between Progress No 3 MSS and
Penny Street 500,000
Elm Street MSS - Station distributor
Geldenhuis Upgrade LV network. Low voltage during
4,000,000
Street Winter
Roodepoort Replace all overhead service connections 4,000,000
Replace the 11 kV OCB's at Helderkruin
Helderkruin 1,000,000
switching station with vacuum breakers
Install a 3rd 11 kV cable from JG Strydom
JG Strydom switching station to reinforce the ring with 2,000,000
31 MSS's.
Protect exposed MV cables. Wilgeheuwel,
Roodepoort 5,000,000
Christiaan de Wet & Bergbron
Replace unreliable 35 mm PEX cables in the
Bergbron 8,000,000
Bergbron area.

Substation/
Township
Upgrade the supply to Spokeshave switching
Spokeshave station by installing a 300 mm Cu cable from 25,000,000
Robbertville to Spokeshave
CBD 11 kV conversion 8,000,000
Southern
Closing of spurs 3,000,000
Region
Southern Reinforcement of overloaded MV
12,000,000
Region infrastructure (winter load readings)
Turnkey project to replace LV open wire
Southern
overhead systems with ABC in problematic 15,000,000
Region
areas.
John Ware 4,000,000
11kV conversion (5 MSS & 88 L/C)
Inner City MV master plan for the Inner City 1,500,000
Ebury & Cowley Feeders ring not firm - This project forms part of the
Brynorth 6,310,000
upgrade Bryanston Master plan.
Van Beek Transmission: Decommission 20,5/6,6kV 5,000,000
Siemert Provision to close spurs 2,000,000
Siemert 1,000,000
Upgrade 50 mm cable between Melrose TSS
Cydna 2,500,000
Cr Oxford Rd & Cecil Ave and MSS N405
Install 2 X 300 mm Cu XLPE cables from
Halfway House
Waterval to Halfway House 41 satellite sub 5,000,000
41
station
Other Critical Projects
Table 7.8: shows other deferred projects.
Table 7.8: Other deferred projects

Substation/
Township
City Power to take over the
This is in line with the City's commitment to
maintenance of all COJ buildings.
All areas 40,000,000 reduce power consumption and to align with the
Install DSM, Solar geysers and
National PCP initiative.
lighting, CLF's, pre paid meters etc
City Power to take over the
This is in line with the City's commitment to
maintenance of all hostels. Install
All areas 50,000,000 reduce power consumption and to align with the
DSM, Solar geysers and lighting,
National PCP initiative.
CLF's, pre paid meters etc
The control centre is the "heart" of City Power's
network. The existing arrangement consists of
separate rooms with severe space and noise
Establishment of a Control and
All areas 45,000,000 challenges posing serious safety risks, and it's
Outage Management Centre
not scalable in terms of future expansion. In fact,
it is totally unacceptable as a control centre for
City Power.
All Purchase three standby generators 3,000,000
A large amount of theft and vandalism occurs in
Install alarm systems in load
All 1,500,000 City Power's load centres. An alarm system
centres.
linked to the Risk Control room will reduce this.
CBD Tunnel security alarm and 9,000,000 This is an important project to reduce vandalism
Substation/
Township
surveillance system and the theft of cables in the tunnels
City Powers depots and major sub stations does
Integrated security, fire detection not have a reliable security and fire detection
& suppression systems for major system to protect against illegal entry, theft or
All areas 20,000,000
substations. Including fibre optic severe damage due to fire. The work will be
links (+- 50 % of budget). phased over a number of years to reduce the
impact per financial year.
This project can be deferred until Sandringham
Establish a new standby distributor
Sandringham 1,000,000 sub station is built or until capacity can be made
for the Linksfield area.
available from an alternative source.
New distributor from Cydna to
Cydna HVC130 due to North street feeder 3,000,000 Will be done in 2008/9
overload
New feeder from Alex sub (clean
Gresswold Lombardy East standby 1,000,000
distributor)
Add 1x new ring to relief overload Unable to support new developments resulting
Bordeaux 3,200,000
from existing feeders in loss of revenue.
Randburg Add 1x new ring to relief overload The project started in 2008/9 will not give full
3,200,000
11kV from existing feeders benefit without the second phase being done.
Reinforcing master plan for the N-1 isc not available which result in extended
Kyasands area. Supply to and restoration times under fault conditions.
Kyasands 23,900,000
between the various switching Additional capacity is required for new
stations not firm developments..
Create new standby dist from No N-1 contingency resulting in extended
Orchards 2,500,000
Orchards to HVC109 restoration time under fault conditions.
Replace 95 mm (0.15") sections To optimise the capacity of this distributor, the
Cleveland 1,610,000
with 185 mm- Jeppe East Dist 95 mm sections must be replaced.
The existing distributors are severely overloaded
Observatory Upgrade Bruma distributor 4,500,000 resulting in insulation damage. This will result
in an increase in faults in future.
Reinforce and install various
distributors from Beyers sub
Beyers 50,000,000
station to Berario and Fairlands.
Phase 2.
Carina/
Mss 203 Dist complete the ring 700,000
Lenasia
To be fed from Beyers on
completion of Transformer
Without upgrade. Cables previously 11,500,000
installed to be checked if still
intact
Bridal Veil - Lone Creek ring not
firm - Create two new rings from
Florin 1,500,000
Florin ss, connect at Wasbank &
Weiling mini subs.
Boloop - Almond Rock Ring not
firm - replace70 Al from
Fredenharry to Lone Creek with 95
Florin 1,600,000
mm Cu. Create two rings from
Florin when load increase
sufficiently.
Florin Minisubs on spur feed - install 95 800,000
Substation/
Township
mm Cu cable from Witwatersrand
3 to Pennyweight 2 and
Fredenharry to Witwatersrand 1 to
extend ring.
Yacht feeder overload - install new
Ridge Road 185 Cu ring to take load off Yacht 2,000,000
feeder.
Substation supply not firm. Install
Ruimsig 2 185 Cu cables from Peter Road 6,500,000
to Ruimsig.
Constantia Establish temporary 6.6/11 kV sub
33,000,000
Kloof station
Install earth fault indicators on MV
All areas 5,000,000
load centres
We made a commitment to Exco and the Board
to replace obsolete equipment to improve system
Replace obsolete relays and
performance and to eliminate unnecessary
provision for protection on
All areas 5,000,000 outages and damage to plant. The existing relays
various feeders in existing
cannot accommodate SCADA and also cannot
substations
record system disturbances making it difficult to
do proper fault investigations.
All SCADA: RTU Installations 15,000,000
MV Load Centre and mini sub
All 7,000,000
monitoring system
Alexandra Establishment of new townships 2,000,000
Midrand Establishment of new townships 2,000,000
Randburg Establishment of new townships 2,000,000
Siemert Establishment of new townships 2,000,000
Hursthill Establishment of new townships 2,000,000
Lenasia Establishment of new townships 2,000,000
Reuven Establishment of new townships 2,000,000
Roodepoort Establishment of new townships 2,000,000
Roodepoort Establishment of new townships 2,000,000
From the above tables it can be seen that a major contribution comes from the network related projects
which, in turn, impose a significant contribution towards service delivery. Therefore, there is no doubt
that this reduction will have significant impact in service delivery and, due to the nature of these
projects, natural load growth and network deterioration, the required investment will have to be made
sooner or later. It is most likely that this reduction will put pressure on future capital budget allocations.
The following are some of the areas which will see the impact in the near future:
• Impact in the reduction of unplanned outages
• Impact in the improvement of restoration times
• Provision of new service connections will be negatively impacted
• There will be an increase in OPEX (R&M) due emergency repairs
• Stock Levels will be impacted negatively (most likely to be high)
• Township developments will slow down due to capacity constraints
• N-1 contingency will be violated, impacting negatively on network reliability
• Deferred budgets will place additional burden on future financial year budgets

Focus Areas
• The construction / upgrading of substations to alleviate loading problems and the elimination of
non-standard voltages
• Upgrade of all transmission and / distribution equipment in order to alleviate the current
overloading situations
• Upgrade all equipment where safety of personnel is jeopardised
• Upgrade / replace all un-maintainable cable networks
• Upgrade of protections systems with modern technology equipment
• The expansion of the SCADA system to make it possible to monitor / operate substations
remotely
• Roll out of DSM / Load Management
7.1.2 Major Infrastructure Initiatives
Major Intake Points
The upgrading of Delta 275/88kV intake point in the North West which commenced in 2007/08 will be
completed mid 2009. Two new Eskom intake points are being planned to provide security of supply for
2010 and to provide the capacity required to support development into the future. These are major
projects, and will take approximately two to three years to complete. “Sebenza” will be situated in the
North-East of Johannesburg adjacent to Kelvin Power Station and “Quattro” in the South West of
Johannesburg adjacent to the old Orlando power station site. The identification of funding for these two
projects is now critical, so tenders can be placed to ensure that long lead items can be ordered.
Eskom Upgrades
To support of our immediate and future capacity upgrades our load projections have been communicated
to Eskom. Eskom have indicated that to provide the capacity required they will have to upgrade their
transmission networks. Initial payments have been made to Eskom for some of these upgrades. Upgrades
to support development in the Randburg, Midrand and Roodepoort areas are currently in progress and
are planned for completion at the end of 2009. Further upgrades are necessary to support the planned
growth across the city.
Eskom’s transmission networks will also need to be extended to supply our planned 275/88kV intake
points at both Quattro and Sebenza.
Project Status
This section highlights the status of payments for applications made to Eskom for the upgrade of their
substation and backbone infrastructure in order to cater for additional backbone capacity requirements.
Table 7.9: Project status

Eskom payments towards the Infrastructure upgrade for additional capacity
Project Name Total(Budget quote) Amount Paid Outstanding
Harley 9,466,823.76 2,366,706 7,100,117.82
North Riding 3rd Trx 17,504,047.95 6,902,823 10,601,224.95
Olivedale 13,016,886.06 3,254,222 9,762,664.54
Randburg 11kV 14,493,238.81 10,869,929 3,623,309.70
Lutz 32,078,703.95 16,039,652 16,039,051.97
Eskom payments towards the Infrastructure upgrade for additional capacity

Project Name Total(Budget quote) Amount Paid Outstanding
New Road 16,121,522.53 12,091,142 4,030,380.63
Khanyisa (Brywest) 32,883,291.00 8,220,823 24,662,468.25
Randburg Backbone 20,000,000.00 8,078,386.56 11,921,613.44
Crown 580,253.00 580,253.00 0
Delta Upgrade 19,662,000.00 4,787,866.60 14,874,133.40
Noordwyk 19,000,000 0 19,000,000
194,806,767.06 73,191,805.16 121,614,964.70
Totals
Substations
Upgrade of Existing Substations
The upgrading of eight substations which commenced in 2007/08 and 2008/9 will continue, and be
completed in 2009/10. The planning and design for a further seven upgrades is at an advanced stage, and
these upgrades will commence towards the end of 2008/9 and be completed in 2009/10. The upgrading
of Siemert Road, Crown and Braamfontein Substations, which support 2010 and Gautrain respectively,
have commenced.
New Substations
The construction of two substations which commenced in 2007/08 will continue and be completed in the
latter part of 2008.
The planning and design of four new substation has been completed, three of which are pending GDACE
approval. The construction of Crown Substation which will supply Soccer City, host to both the opening
and closing ceremonies for 2010, and will be completed during 2009/10.
Project Status
Table 7.10 below indicate the status of upgrade and new substation projects, aimed at addressing
capacity constraints and refurbishment backlog as alluded to above.
No. Substation Area to Benefit Progress
1 Khanyisa Substation, Bryanston area Construction stage
2 New Road Substation, Midrand area Construction stage
3 Crown Substation, Nasrec Area Construction stage
4 Nirvana Substation Lenasia Area Design Stage
5 Westfield Substation, Modderfontein Area Construction stage
6 Fort Substation, Inner City Area Tender Stage
7 Wemmer Substation, Turfontein, Rosettenville Area Planning Stage
8 Grand Central Substation Midrand Construction Stage
9 Rooseveldt Park Substation North Cliff, Rooseveldt Park Area Final Design Stage
10 Delta Substation Rosebank, Parkhurst Area Construction Stage
11 Greswolrd Substation Gresworld Area Tender Stage
12 Pennyville Substation Pennyville, Noordgesig Area Tender Stage
13 Hopesfield Substation Lawley, Ennerdale Area Commissioned
14 Hursthill Substation Hursthill Construction Stage
15 Randburg Substation Randburg Construction Stage
16 Olivedale Substation Olivedale Construction Stage
17 Rosebank Substation Rosebank Construction Stage

18 Crown Substation Crown Construction Stage
19 Siemert Rd Doornfontein Construction Stage
20 Eikenhof Eikenhof Tender Stage
21 Parkhurst Parkhurst, Hyde Park, Rosebank Tender Stage
22 Ennerdale Ennerdale, Lenasia South Tender awarded
23 Christiaan de Wet Strubens Valley, Weltenvreden Final Design Stage
Park
24 Peter Road Ruimsig, Honey Dew Final Design Stage
25 Noordwyk Noordwyk, Randjiespark, Final Design Stage
It should be noted that the committed budget requirements for the 2009/10 financial year includes some
of the above projects.
Overhead and Underground Transmission networks
We are currently experiencing transfer capacity problems on our transmission line networks and
significant upgrades are required to support capacity upgrades at existing and new substations being
planned. These upgrades need to be undertaken before the load reaches a critical level, whereby we will
no longer be able to take these lines out of service to do the upgrades. In areas where we are no longer
able to get servitude corridors, underground cables are being planned. The cost of underground networks
in comparison to overhead lines is approximately five fold.
Where new overhead lines are being planned the acquisition of land and the environmental process that
has to be followed has proven to be a major challenge and is delaying projects.
Refurbishment of the Transmission Networks
The refurbishment of existing substations and replacement of high risk transformers and switchboards
will continue to be implemented, in order to bring the network within the acceptable average age. In
many instances these transformers are replaced as part of planned upgrades.
Upgrading & Refurbishment of the Medium & Low Voltage networks
This still presents a major risk and is where the majority of outages occur. However, due to limited funds
being made available and the need to first upgrade the transmission networks with the majority of the
available funds, the backlog on refurbishment and upgrading of these networks is growing each year. As
soon as the transmission networks have been upgraded the focus will change to the refurbishment and
upgrading of the medium and low voltage networks.

Township Establishment, Densification and New Service Provision
This remains our single biggest risk, and a source of frustration for City Power staff, developers and
Consultants. Considering that City Power has seen an overall natural growth in maximum demand of
approximately 5% over the last few years, our networks in a growing number of areas have been placed
under severe strain and have become overloaded. This has been further compounded by the demand for
housing which has resulted in an exponential boom in many areas due to densification and natural load
growth. In many areas, particularly the Midrand, Randburg and Roodepoort areas, the growth has been
in excess of 30%. As a consequence we have no capacity to support further development, and have for
some time now been forced to turn down applications for densification, township establishment and the
provision of new service connections. This will have to continue until these networks have been
upgraded. This will ensure that our networks are not further overloaded and will protect the existing
customer base.

7.1.3 Sources of Funding

Table 7.11 below gives the breakdown of the anticipated Budget allocation and sources of funding for
2008/09:
Table 7.11: Budget allocation and Sources of Capital Funding

Engineerin
Public g Service Other and
Contributi Adopt-a- Contributi DSM
2009 / 2010 Loans Own funds ons light DME ons CMIP/MI Province Surcharge)
Type of project RX1000 RX1000 RX1000 RX1000 RX1000 RX1000 RX1000 G RX1000 RX1000 RX1000
Buildings 2,000 2,000
Bulk Infrastructure 291,928 268,928 23,000
Bulk Infrastructure
Electrification 40,000 20,000 20,000
Electrification 50,150 50,150
DSM/ Load
Management 55,000 55,000
Emergency
Generators 0
Fire and Security 15,000 15,000
Meters 12,000 12,000
Meters - Revenue
Protection 30,000 30,000
Network
Development 15,000 15,000
Network
Development
Electrification 13,000 13,000
Operating Capital 37,500 37,500

Plant and
Equipment 0
Protection 20,000 20,000
Public Lighting 60,093 17,072 5,000 38,021
SCADA 5,000 5,000
Service Connections 89,700 89,700
Support Services 0 0
Telecommunications
s 5,000 5,000
Township
Reticulation 0
Upgrading of
network 84,500 84,500
TOTAL 825,871 600,000 0 89,700 5,000 70,150 23,000 38,021 0 0

7.2. Operational Expenditure
7.2.1 Financial Planning Assumptions

Table 7.12: Financial Planning Assumptions
Details Notes Budget Forecast Budget Budget Budget

2008-2009 2008-2009 2009-2010 2010-2011 2011-2012
Revenue
Tariff Increase % 30.60% 30.60% 28.20% 18.00% 15.00%
Income Split Key Customers % 46.00% 46.00% 46.00% 46.00% 46.00%
Income Split City Power % 15.00% 15.00% 15.00% 15.00% 15.00%
Income Split Prepaid 2.00% 2.00% 2.00% 2.00% 2.00%
Income Split COJ % 37.00% 37.00% 37.00% 37.00% 37.00%
Other Income 5.00% 5.00% 4.5% 4.0% 4.0%
Direct Costs
Kelvin Power Station Increase % 47.60% 47.60% 6.00% 5.38% 12.50%
ESKOM Increase % 35.60% 35.60% 25.00% 25.00% 25.00%
%
Growth in units purchased % 2.00% 2.00% 1.00% 1.00% 1.00%
Payment Levels
Key Customers % 99.0% 99.0% 99.0% 99.0% 99.0%
City Power Top Customers % 99.0% 99.0% 99.0% 99.0% 99.0%
City Power Prepaid 100.0% 100.0% 100.0% 100.0% 100.0%
COJ Domestic Customers % 93.0% 93.0% 93.0% 93.0% 93.0%
Expenditure
Inflation CPIX % 6.2% 6.2% 6.8% 5.6% 5.2%

Salary Increases: Salaries % 8.30% 8.30% 11.00% 7.0% 5.9%
Allowances % 8.30% 8.30% 11.00% 7.0% 5.9%
General Expenses % 6.2% 6.2% 7.3% 5.6% 5.2%
Repairs and Maintenance % 6.5% 6.5% 8.8% 7.6% 7.2%
Repairs and Maintenance Other % 50.0% 50.0% 8.8% 7.6% 7.2%
Capital Expenditure R000 1,043,352 1,043,352 825,871 792,516 768,540

Loan funded projects R000 595,649 595,649 450,000 400,000 400,000
Internal Sources R000 150,000 150,000 150,000 150,000 100,000
Other R000 297,703 297,703 225,871 242,516 268,540

7.2.2 Income Statement

Table7.13: Income statement
Details Actual Budget Forecast Budget Budget Budget Budget
2007-2008 2008-2009 2008-2009 2009-2010 2010-2011 2011-2012 2012-2013
Total Operating Income 4,328,037 6,011,917 5,916,539 7,302,326 8,715,411 10,188,539 11,419,620
Turnover 4,164,040 5,620,324 5,564,857 6,909,043 8,253,902 9,704,009 10,912,746
Other Income 163,997 391,593 351,682 393,283 461,509 484,530 506,874
Cost of Sales 2,795,652 3,890,654 3,816,539 4,830,710 5,960,500 7,323,700 8,468,100
Gross margin 1,532,385 2,121,263 2,100,000 2,471,616 2,754,911 2,864,839 2,951,520
Gross margin % 35.41% 35.28% 35.49% 33.85% 31.61% 28.12% 25.85%
Operating overheads 1,314,282 1,627,682 1,643,621 1,793,382 1,964,730 2,137,608 2,295,636

Employee Related Costs 444,270 500,968 500,968 556,074 594,999 630,104 662,870
Salaries
Gen.exp - Other 421,865 435,567 495,001 518,019 546,327 575,304 605,220
Repairs and maintenance 209,273 205,000 205,000 223,040 243,991 267,558 286,823
Contribution bad debts 111,769 285,029 243,827 252,042 301,102 354,002 398,097
Depreciation and amortisation 127,105 201,118 198,825 244,208 278,310 310,640 342,628
Operating Profit before 218,103 493,581 456,380 678,234 790,181 727,231 655,883
interest and taxes
Operating Profit % 5.04% 8.21% 7.71% 9.29% 9.07% 7.14% 5.74%
Net interest (266,614) (283,700) (309,738) (326,996) (273,603) (215,848) (171,881)

Interest income/(Expense -ve) 56,306 76,484 28,400 54,592 95,224 139,367 179,138
Interest on COJ shareholder (109,904) (109,617) (109,617) (109,617) (109,617) (109,617) (109,634)
loans (-ve)
Interest on Mirror conduit (65,121) (50,784) (50,784) (34,308) (14,723) (490)
loans (-ve)
Interest on Capex loans (-ve) (167,405) (233,764) (216,803) (271,694) (288,228) (294,433) (297,276)
Interest on outstanding Debtors 19,510 33,981 39,066 34,030 43,740 49,325 55,890
Add Back Prior year

adjustments
Profit before fair value -48,511 209,881 146,642 351,238 516,578 511,382 484,003
adjustments
Net Fair Value Adj
Profit before tax -48,511 209,881 146,642 351,238 516,578 511,382 484,003
Taxation (58,767) (41,060) (98,347) (144,642) (143,187) (135,521)
Attributable income -48,511 151,114 105,582 252,891 371,936 368,195 348,482
Retained income at beginning of 808,966 722,571 760,455 866,037 1,118,928 1,490,864 1,859,060
period
Retained income at end of 760,455 873,685 866,037 1,118,928 1,490,864 1,859,060 2,207,541
period

7.2.2.1. Forecast for 2008/2009
The forecast profit for the year has reduced from the original budget of R151,114 million to R105,6
million. The main reasons for this reduction in profit are set out below:
Turnover
Turnover has decreased from R5,620 million to R5,564 million. The forecast volumes are lower.
Other revenue
• Deferred income has reduced by R23,5 million because of the change in the amortisation
period of the deferred income from 30 to 53 years as requested by the auditors.
• DSM levy has decreased from R230 million to R200 million because of the late
implementation of the levy and the decrease in units purchased
• Cut off fees and new connections have increased against the original budget. These increases
are because of credit control and new developments.
Direct Cost
• Direct Cost has decreased by R74 million. This is because of the decrease in units
purchased, that also affected our revenue. The unit price at June 08 was 45c/kWh, at
September 08 81c/kWh and at December 68c/Kwh. An energy consultant has been
appointed to monitor the coal purchases at Kelvin and it starting to bear fruit
resulted in a decrease of R74 million.
.
Gross Profit
As a consequence of the decrease in other revenue for the year, gross profit has decreased by R21
million.
Operating Expenditure
The decrease in the operating expenditure amounts to R88 million. The reasons for this decrease are the
following:
(i) Contributions to Bad Debts: Decrease of R41 million
The provision for bad debts has been decreased by R41 million because of the decrease of the
DSM levy (an additional R80 million was added to the provision when the final budget was
approved). The collection rate needs to improve to ensure outstanding debtors are collected.
The current provision for bad debt is sufficient to cover all debt older than 90 days.
(ii) Financing Charges – Increase of R28,8 million

Net expenditure on financing charges shows an increase of R28,8 million mainly as a result of
the interest earned on the favourable bank balance which is less than budget because of the
decreased cash position of City Power by R48,1 million. The interest received on debtors is
R5,1 million less because of the adjustment of the DSM levy and the current collection rates.
Interest on Capex loans is also less by R17 million because of the late payments of capex
claims.

(iii) General expenses – Increase of R59,4 million

General expenses have increased from R435 million to R495 million because of the increase in
security cost, meter readings, cut off cost, commission paid to third parties as well as illegal
connections and meter audits.
(iv) Attributable Income
Attributable income has been reduced by 45,5 million to R105,6 million for the reasons
detailed above.
7.2.2.2 Budget 2009/2010
Overview
The budget for 2009/10 has been prepared on the following basis:
• The forecast for 2008/09 has been used as the base period.
• For expenditure the CoJ indicatives have been followed:
• CPIX - - 6,8%
• Salary increases - 11%
• Repairs and maintenance increase - 8,8%
• Other expenditure - 7,3%
• Growth in consumption - 1%
The following increases in direct costs were utilised

• Eskom - 27% (25% in 2010/11 and 25% thereafter)
• Kelvin - 6%
Revenue Tariff Increase
A standardised tariff model was utilised for the CoJ entities utilising a Rate of Return methodology.
This methodology is also in line with recent NERSA initiatives.
A key driver of the required revenue increase is the capital base. A risk weighted return on the asset base
is incorporated into the required tariff increase calculation to ensure there is adequate investment in the
network infrastructure. This is influenced by the level of capital expenditure required by the entity.
7.2.2.2.1 Income Statement

Explanations for the amounts provided in the income statement are set out below. Reasons for the
increases between the original budget for 2008/2009 and the budget for 2009/2010 are also included
where necessary.
7.2.2.2.2 Turnover
Turnover has increased from R5,620 million to R6,909 million compared to the original budget, an
increase of 22,9% or an increase of 24.15% based on the forecast.
In addition to the growth and reduction in non-technical losses, the details of which are contained
elsewhere in the business plan, provision has been made for a tariff increase of 28,2%.

7.2.2.2.3 Other Income
The main components of other income and the budget provision made for 2009/2010 include the
following:
DSM Levy - R230 million
New Service Connections - R52,8 million
Deferred Income - R20,8 million
Reconnection Fees - R41 million
Water Meter Reading - R11,3 million
Sale of Scrap - R4,5 million
Other income has generally been increased by the CPIX of 6,8%.
7.2.2.2.4 Direct Costs
The forecast of R3,891 million has been used as the base figure on which the budget for 2009/2010 has
been calculated.
In addition to the growth in units purchased an increase in Eskom costs of 27% has been included in the
budget. The overall budget provision for 2009/2010 therefore amounts to R4,831 million, which is an
increase of 24,2% when compared to the budget. The increase of 24,2% is also attributable to the change
in the mix in units purchased from Eskom and Kelvin Power Station, since it is to City Power’s
advantage to take additional units from Eskom during the summer months and extra units from Kelvin
Power Station during winter. Provision is also made for utilising the Gas turbines during load shedding
periods to the amount of R14 million.
7.2.2.2.5 Gross Margin

The gross margin for the 2009/2010 financial year of 33,85% is less than the original budget of 35,28%,
due to the fact that provision has been made for a tariff increase of 28,2,% while Eskom costs are
budgeted to increase by 27% and Kelvin Power Station by 6% and other income is only increasing by
6,8%. Provision is also made for additional cost for the gas turbines.
There is a decrease of 1,6% in the gross margin for the 2009/2010 financial year compared to the
forecast for 2008/2009.
7.2.2.2.6 Operating Expenditure

Total operating expenditure for 2009/2010 financial year amounts to R1,793 million compared to the
original budget for 2008/2009 of R1,628 million, which represents an increase of 10,1% or R168
million. This increase is analysed below.
Salaries and Allowances:
Salaries and allowances have increased by 11% from R501 million to R556 million. The increase of 11%
is due to the following:
A general annual increase of 11% has been provided for, which amounts to R55 million.
General Expenses: Increase of R82 million

• Overall General expenses forecasted budget in 2008/09 of R495 million has increased by R23
million to become R518 million for 2009/10. The R23 million represents only a 4,6% increase on all
General expenses.
Repairs and Maintenance: Increase of R18 million (8,8%)
The increase is based on the parameters as set.
Contribution to Bad Debts: Decrease of R33 million based on the budget 2008/2009 or R9million
increase based on the forecast.
Turnover has increased from R5,620 million to R6,909 million which represents an increase of R1,289
million. Payment levels have been set at 99% for City Power debtors and 93% for City of Johannesburg
debtors. With the additional revenue generated, the unrecovered portion must be provided as an
additional contribution to the bad debts provision. It must be noted that this is a potential risk area based
on the historical and current CoJ collection levels.
Depreciation: Increase of R43,1 million based on the budget 2008/2009 or R46 million based on the
forecast.
The increase in capital expenditure is the reason for the high increase in depreciation.
Net Interest: Increase of R42,3 million
Net interest shows an increase of 14,9% from R283,7 million to R326,9 million based on the 2008/2009
budget, or 3,1% more based on the forecast.
Although the interest on the Shareholders Loans remains constant, and the interest on Mirror Loans is
decreasing as the loans are repaid, interest on new capital project loans has increased from R234 million
to R272 million.
This increase is due to the increase in capital spending and, specifically, the loan funded projects where
expenditure financed from loans will amount to R450 million.
Profit
The original budgeted profit for 2008/2009 amounted to R151,1 million. The profit after tax for
2009/2010 amounts to R252,9 million which represents an increase of 67% based on the budget or
R147,3 million based on the forecast.

7.2.3 Cash Flow

Table 7.14 below shows the cash flow statement for the five year budgetary period.
Table 7.14: Cash Flow statement

2007-2008 2008-2009 2008-2009 2009-2010 2010-2011 2011-2012 2012-2013
Profit Before Interest and 218,103 493,581 456,380 678,234 790,181 727,231 655,883
Taxes
add: Depreciation and 127,105 201,118 198,825 244,208 278,310 310,640 342,628
amortisations
Add loss on disposal of assets
Add Exceptional items
Less: Interest (paid)/ received (266,614) (283,701) (309,738) (326,996) (273,603) (215,848) (171,881)
Less: Taxes paid/fair Value (58,767) (41,060) (98,347) (144,642) (143,187) (135,521)
Adjustments
Cash generated from 78,594 352,231 304,407 497,099 650,246 678,835 691,109
operations
Increase/decrease in net (82,777) 540,547 360,623 430,860 225,325 150,732 303,428

current assets
Less : (Increase)-decrease in 13,088 (2,031) (1,750) (2,038) (1,793) (1,758) (1,849)
stock
( Increase)-decrease in (94,361) (1,286) (2,493) (2,996) (2,559) (2,509) (2,640)
debtors
(Increase)-decrease in (64,540) 208,585 52,948 260,264 (69,089) 5,529 12,128
other current assets
add: Increase-(decrease) in -65,306 98,067 215,159 83,601 230,650 235,870 239,393
creditors
Increase- (decrease) in 9,593 7,612 (16,283) 11,331 7,648 6,897 6,437
accruals and provisions
Increase-(decrease) in 71,204 204,242 106,687 50,741 34,512 -122,368 17,398
short term portion of LTL
Increase-(decrease) in 23,737 25,359 31,703 29,957 25,957 29,072 32,560
consumer deposits
Increase-(decrease) in 23,808 -25,347 0 0 0 0
other current liabilities
Prior year adjustments
Net cash generated / -4,183 892,779 665,030 927,959 875,571 829,567 994,537
(absorbed)
from operations
Cash impact from investing (1,036,730) (1,043,352) (941,511) (827,901) (800,618) (755,155) (815,346)
activities
Increase in intangible assets (695) 2,814
Acquisition / (realisation (1,036,035) (1,043,352) (944,325) (827,901) (800,618) (755,155) (815,346)
proceeds) of fixed assets
Proceeds on disposal of Assets
Cash impact from financing 451,032 651,126 62,640 443,573 329,912 456,803 285,733
activities
Increase -(decrease) in 0 0 0 0 0 0 0
shareholder loans
Increase-(decrease) in long term (87,460) (190,869) (103,409) (103,936) (143,024) 113,179 4,518
liabilities
Increase-(decrease) in Capex 340,756 544,015 102,781 298,490 184,257 49,229 (1,494)
Loans
Increase-(decrease) in Deferred 197,736 256,007 13,771 207,046 225,428 225,626 147,188
Income
Increase in Deferred Tax 0 41,973 49,497 41,973 63,252 68,770 135,521


2007-2008 2008-2009 2008-2009 2009-2010 2010-2011 2011-2012 2012-2013
Net movement in cash (589,881) 500,553 (213,841) 543,631 404,865 531,216 464,923
position
Opening cash position 956,062 665,317 366,181 152,340 695,971 1,100,836 1,632,052
Closing net cash position 366,181 1,165,870 152,340 695,971 1,100,836 1,632,052 2,096,975
The closing net cash position for City Power for the 2009/2010 financial year amounts to R695 million.
This is based on a forecast cash flow balance for the 2008/2009 financial year of R152 million plus a net
inflow of cash for 2009/2010 of R543 million.
The reasons for the net inflow of R543 million are given below:
• Cash generated from operations amounts to R497 million of which R678 million relates to profit
before interest and tax
• Net current assets reflect an increase of R430 million mainly as a result of the decrease in current
assets of R260 million. In addition the creditors has increased by R83 million and the short term
portion of the long term debt by R50 million.
• The cash impact from investing activities amounts to R826 million. This capital expenditure is made
up of R450 million in respect of loans, R150 million in funding from City Power’s own cash
resources and R226 million by way of public contributions and government grants.
• The cash impact from financing activities amounts to R443 million the bulk of which relates to the
increase in new capital loans refunded to City Power by the City of Johannesburg. Deferred income
has also increased by R207 million resulting from the capital projects funded from public
contributions and government grants.

7.2.4 Balance Sheet

Table 7.15 shows the company’s Balance Sheet.
Table 7.15: Balanced sheet

2007-2008 2008-2009 2008-2009 2009-2010 2010-2011 2011-2012 2012-2013
Assets
Non Current Assets

Employment of Capital
Fixed assets (net book values) 4,339,600 5,104,981 5,085,100 5,675,951 6,205,416 6,657,088 7,136,963
Land and buildings 125,229 104,280 104,280 81,020 57,924 34,644 11,327
Plant & equipment 4,107,205 4,761,388 4,761,388 5,312,398 5,819,772 6,258,054 6,727,101
Motor vehicles
Fixtures and fittings 5,026 4,169 4,169 2,533 1,360 1,360 1,468
Office equipment 4,488 17,443 17,578 23,336 29,159 32,898 35,549
Other fixed assets 97,652 217,702 197,686 256,664 297,201 330,131 361,518
Other non-Current Assets 71,569 62,975 68,755 61,598 54,441 47,284 40,127
Other Long Term Assets 71,569 62,975 68,755 61,598 54,441 47,284 40,127
Current Assets 1,665,387 1,945,944 1,402,840 1,691,241 2,169,547 2,699,501 3,156,785

Debtors 1,903,377 1,959,283 2,106,383 2,358,425 2,659,527 3,013,529 3,411,626
Less :Provision for Bad Debts(-ve) (1,087,015) (1,336,643) (1,290,021) (1,542,063) (1,843,165) (2,197,167) (2,595,264)
Sundry Debtors 40,204 21,445 42,697 45,692 48,251 50,760 53,400
Stock / Projects in progress 28,225 34,786 29,975 32,013 33,806 35,564 37,413
Cash & equivalents 366,181 1,165,870 152,340 695,971 1,100,836 1,632,052 2,096,975
COJ 414,415 101,203 361,467 101,203 170,292 164,763 152,635
Total Employment of Capital 6,076,556 7,113,901 6,556,696 7,428,790 8,429,404 9,403,873 10,333,876
Equities and Liabilities
Capital and Reserves 872,921 986,151 978,503 1,231,394 1,603,330 1,971,526 2,320,007
Share Capital and Premium 112,466 112,466 112,466 112,466 112,466 112,466 112,466
Retained Income 760,455 873,685 866,037 1,118,928 1,490,864 1,859,060 2,207,541
Non-Current Liabilities 3,689,497 4,334,656 3,752,136 4,195,709 4,525,621 4,982,424 5,268,157

Mirror Conduit External Loans 232,673 129,263 129,263 25,327 -117,697 -4,518 0
Shareholders Loans 624,793 624,793 624,793 624,793 624,793 624,793 624,793
Other External Loans 1,878,670 2,279,941 1,981,451 2,279,941 2,464,198 2,513,426 2,511,932
Deferred Income 953,361 1,209,190 967,132 1,174,178 1,399,605 1,625,231 1,772,419
Deferred Tax Liability 0 91,470 49,497 91,470 154,722 223,492 359,013
Current Liabilities 1,514,138 1,793,093 1,826,057 2,001,687 2,300,453 2,449,923 2,745,711

Trade creditors 924,725 1,112,198 1,139,884 1,223,485 1,454,135 1,690,004 1,929,397
Accruals and provisions 114,205 95,888 97,922 109,253 116,901 123,798 130,235
Short term portion of long term liabilties 295,214 401,901 401,901 452,641 487,153 364,785 382,182
Consumer Deposits 154,648 183,106 186,351 216,308 242,264 271,336 303,897
Other UAC's of COJ 25,346 0
Total Equities and Liabilities 6,076,556 7,113,901 6,556,696 7,428,790 8,429,404 9,403,873 10,333,876
The main items contained in the Balance Sheet for the period 2009/2010 that warrant comments are
detailed below.

7.2.4.1 Fixed Assets
The net book value of fixed assets amounts to R5 676 million, and has increased by R571 million when
compared to the original budget for 2008/09, and R591 million compared to the forecast. This is
attributed to the increased capital spending during the 2008/09 financial year and the impact of the
proposed capital spending for the 2009/10 financial year.
7.2.4.2 Current Assets
Changes to current assets include the following:

• Debtors have increased to R2,358 million compare to the budget of R1,959, and an increase of R252
million compare to the forecast, while the provision for bad debts amounts to R1,542 million.
• City of Johannesburg inter-company debtors amount to R101 million. This includes capital claims
on the City which are outstanding at the end of the financial year and are raised as debtors.
• The cash balances amounts to R695 million.
7.2.4.3 Capital and Reserves
Capital and reserves amount to R1,231 million compared to R986 million reflected in the 2008/09
budget or R978 million based on the forecast. This increase is due to the budgeted profit of R253
million for the 2009/10 financial year.
7.2.4.4 Non-Current Liabilities
Non-current liabilities amount to R4,196 million. The main changes from the 2008/2009 budget are:
• Other capital loans, for new capital projects have increased by R297 million owing to increased
capital spending financed from loans. Capital repayments to be made during the year amount to
R452 million.
• Deferred income has increased from R1,209 million in the 2008/2009 budget or R967 million on the
forecast to R1 174 million as a result of public contributions and government grants. These grants
include R40 million from Municipal Infrastructure Grant funds for Street lightning. A further R25
million in respect of funding of bulk infrastructure from Engineering Service Contributions has been
provided.
7.2.4.5 Current Liabilities
Current liabilities for the 2009/2010 financial year amount to R2,001 million and consist of the
following:
• Trade Creditors amount to R1,223 million and consist of energy purchases from Eskom and Kelvin
Power Station as well as normal trade creditors. The increase in capital spending especially in the
last month of the financial year also has a substantial impact on creditors.
• The short term portion of the long term debt has increased from R402 million reflected in the
2008/2009 to R453 million. This increase is due to the increase in loan funded capital projects.
• Consumer deposits have been increased to R216 million based on the average of previous years
trends.

7.3 Tariff Plan (NERSA and Mayoral approvals are not align, the tariff may change subject to
Mayoral approval)
The long term tariff plan is critical for financial objective planning and strategic planning. This explains
the need to develop such a plan.
7.3.1 Tariff Assumptions

Cost of Supply are:
Growth by 1%
Energy Purchase by 31%
Eskom by 30%
Kelvin by 8%
Gas turbine
R 9.214 /litre
80,000 kW
5 hours per day (during peak)
10 days a month
Volumes
Eskom (88 %)
Kelvin (11 %)
Gas turbine (0.36%)
Salaries, Wages & allowance by 11%
Repairs & maintenance by 8.8%
General expenses by 0.5%
7.3.2 Tariff Objectives
The key objectives of the tariff plan are:
To sustain company viability;
To align tariffs with national benchmarks;
To meet the requirements of National Energy Regulator of South Africa (NERSA);
To meet the requirements of the Shareholder;
To minimise the impact of tariff increases in order to meet customer needs;
To move towards cost reflective prices in all categories in a phased approach;
To maximise customer tariff choice;
To send the right signal for DSM.
7.3.3 Proposed tariff increase
The proposed average tariff increase is 30%, with the detail of the increase as outlined in table 7.12
below.
Table 7.12 is the proposed long term tariff increase

Tariff Actual Plan
Tariff structure 08/09 09/10
Domestic Lifeline 14.2% 7.5 %
Domestic Single phase 20.60% 49%
Domestic Three phase 42.0% 30%
Agricultural Three phase 43.0% 32%
Business Three phase 43.0% 32%
7.3.4. Structural changes per rate category

Domestic Tariffs
The tariff is applicable to existing, as well as new customers, in the City Power area of supply. These
tariffs are applicable for the following supplies: private households, flats, boarding houses and hostels,
charity residences and caravan parks. Domestic customers have a choice of three tariffs. Customers not
exercising their particular choice will default to the life-line tariff. All domestic tariffs are assumed to
have Ripple Control facilities built in (Domestic tariffs are discounted for the ability to do ripple
control). There is no option for customers to opt out of ripple control.
Life-Line Tariff
• Cut-off at 500 kWh
• There will be alignment with the City of Johannesburg social package
• The tariff to be more cost reflective and transparent, yet taking affordability into consideration
• 100 kWh per month of free basic electricity.
• Pre paid policy allows for anyone within the City Power area of supply
Recommendation
Proposed increase of 7.5%
Single-Phase Domestic Tariff

• Starts from 500kWh upwards
• There will be alignment with the City of Johannesburg social package
• The tariff to be more cost reflective and transparent, yet taking affordability into consideration
• Customers on this tariff do not qualify for 100 free kWh/month
• It has an option of Prepaid or conventional accounts
Recommendation
Proposed increase of 49%
Three-Part Seasonal Domestic Tariff

• Winter period (May to August, 4 months) and Summer period (Sept to April, 8 months)
• If customers have the ability to reduce winter consumption (e.g. space heating by gas, anthracite
etc) then the three part seasonal tariff would be the cheaper option. Also customers who have
high consumption in Summer months (air conditioner load) will also benefit by being on this
tariff
• Encourage customers to migrate to this tariff, migrate costs will be waived (zero charge)
• Increase seasonal differentiation (Summer to Winter energy rate)
• Seasonal energy rates of single and 3 phase will remain the same
• Customers on this tariff do not qualify for 100 free kWh/month
• Customers on this tariff need to remain on the tariff for a minimum period of 12 months before
they can migrate to another domestic tariff (To avoid moving between tariffs)
Recommendation:

Agricultural Tariff
• Applicable to supplies not exceeding a capacity of 40 kVA
• The property or portion must be zoned for agricultural purposes
• Not for business purposes
• Service charges need to be reviewed in line with cost reflectivity and will remain the same
charge during Winter and Summer months
• It will be assumed (service charge calculation) that all supplies will be three phase.
Recommendation:
Proposed increase of 32 %
Business Tariff
• Applicable to supplies not exceeding capacity of 100kVA
• Applicable for business purposes, industrial purposes, nursing homes, clinics, hospitals, hotels,
recreational halls and clubs, educational institutions (including schools and registered crèches),
sporting facilities, bed and breakfast houses, mixed domestic and non-domestic loads, welfare
organisations of a commercial nature and premises used for public worship and religious
purposes.
• It will be assumed (service charge calculation) that all supplies will be three phase, no provision
for basic charge single phase
• The tariff to be cost reflective and transparent, energy rates need to be reviewed as this particular
customer category rates are high compared to the industry average
Recommendation:
Customers who have changed their tariff with installed capacity above 100 kVA will be
limited to only 75 kVA
Large Power Tariff

• Demand Charge needs to be reviewed as it is comparatively high compared to the industry norm
• Possible migration of demand charge to a network based charge
• The tariff to be cost reflective and transparent, energy rates need to be reviewed upward, as this
particular customer category rates are extremely low compared to the industry average
• Reactive energy charges need to be applied to all customers where the power factor is
consistently below 0.96
• Voltage differentiated tariffs to remain
Recommendation:
Proposed increase of 32 %
Time of Use Tariff (TOU)
• Voltage categories to remain
• Customers who meet the TOU criteria need to be encouraged to migrate to this tariff, customers
who have the ability to influence the load consumption can go on this tariff and ultimately
reduce their purchase costs
• A conversion surcharge will be charged.
• A conversion cost (meters etc) will need be billed equal to the actual cost of the meter
conversion, etc
• Service charges would be differentiated according to the supply voltage level
• A monthly R/kVA maximum demand charge need to be applied, possible migration to network
based charges and a demand charge instead of a demand charge
• A revenue neutral conversion surcharge to limit the negative revenue impact on City Power
when customers migrate tariffs without shifting load. Surcharge is based out the difference
between existing customer tariffs and TOU tariffs, taking into account the customers load
profile.
• Surcharge to phase out over a five year period viz.
o 90% surcharge 1st year
o 75% surcharge 2nd year
o 60% surcharge 3rd year
o 45% surcharge 4th year
o 30% surcharge 5th year
• Demand clauses need to be reviewed in line with the issues raised by the NERSA.
• Reactive energy charge needs to be applied to all customers where the power factor is
consistently below 0.96
• Voltage differentiated tariffs to remain
Recommendation:
Special Pricing Agreement
• Customised pricing agreements for large customers meeting City Power and the NERSA
qualifying criteria are available
• Based on customer by customer application
• Application needs to be made via City Power’s Key Customer Division
Green Energy Tariff (Optional add-on to existing tariff)
In support of the draft Energy White paper and Renewable Energy Policy, City Power will be offering a
green energy tariff option in conjunction with the NERSA Green Energy Certificate process as utilised
by the World Summit on Sustainable Development. The additional cost associated with a Green Energy
Certificate would be an added cost to the customer’s existing tariff. Application needs to be made via the
City Power Key Customer Division.

Other Charges
All other charges (incl. connection charge etc) need to be reviewed inline with cost reflective tariff
principle
Recommendation:
To increase the miscellaneous charges to be in line with actual cost.

SECTION 8: WARD PRIORITIES
Table 8.1 below outlines the City Power projects that have been committed, and the duration of the
project. The ward allocation will be done per project.
Administration Ward Projects 2009 / 2010 Start End
Region
1 E Normalisation: Continuation of the 35,000,000 Multi
normalisation programme 5000 year
stands - Alexandra project
2 F Electrification of 1800 Houses in 12,600,000 2009/10 2009/10
Mountain View - Ennerdale South
3 D Electrification of 3000 erven and 21,000,000 2008/9 2009/10
the provision of the bulk
infrastructure - Pennyville
4 E Installation of new service 2,300,000 Multi
connections - Alexandra year
project
5 E Install dual ratio devices on 5,500,000 2007/8 2009/10
Norwood - Houghton distributor to
prepare for 11 kV conversion.
Allow for the replacement of joints
and cables - Cydna
6 A Installation of new service 20,200,000 Multi
connections - Midrand year
project
7 A 1. Complete 185 Al ring in New 8,000,000 2009/10 2009/10
Road along Looper str back to New
Road SS.
2. Install new 185 Cu Ring in
New Road and return via planned
road north of new rd - Erand
Gardens
8 A Install 300 mmCu XLPE cable 15,000,000 2009/10 2009/10
from Grand Central sub station to
Stauch Vorster and New Road -
Stauch Vorster
9 E Change supply to James Crescent 10,000,000 2009/10 2009/10
satelite sub station from Waterval
to Grand Central. Install additional
cable - James Crescent
10 A Upgrade the MV network in the the 12,000,000 2009/10 2009/10
New Road/Halfway Gardens area -
New Road
11 All Emergency Work - Northern 10,000,000 Multi
Region year
project
12 B Additional distributor required to 2,000,000 2008/9 2009/10
relieve overloaded distributors -

Region
Harley Street
13 B Installation of new service 26,800,000 Multi
connections - Randburg year
project
14 B Replace feeder cables and 6.6kV 33,000,000 2007/8 20010/11
load centres with dual ratio mini's -
Bryanston
15 F Preparation of MSS's and Load 32,000,000 2008/9 2009/10
Centres for 11kV conversion -Jeppe
16 F Installation of new service 14,200,000 Multi
connections - Siemert year
project
17 F Forest Town Satelite s/s to be 1,000,000 2007/8 2009/10
replaced. Install MSS and join
cables through - Forest Town
18 B Installation of new service 7,450,000 Multi
connections - Hursthill year
project
19 G Installation of new service 11,230,000 Multi
connections - Lenasia year
project
20 F Installation of new service 11,600,000 Multi
connections - Reuven year
project
21 B New distributors from new Crown 5,000,000 2008/9 2009/10
sub station to Nasrec area - Crown
sub station
22 C Installation of new service 11,800,000 Multi
connections - Roodepoort year
project
23 All Emergency Work - Southern 10,000,000 Multi
Region year
project
24 E Transmission: Extend building and 50,000,000 2008/9 2009/10
install new switchboard.
Reconfigure 88 kV busbar and
install additional transformer -
Alexandra
25 All Repair of HV/MV Transformers - 20,000,000 Multi
All Regions year
project
26 All Upgrade 88 kV lines from Delta to 2,000,000 2009/10 2009/10
Delbank feeding Rosebank - Delta -
Delbank
27 All Installation of Sergie fire protection 10,000,000 2008/9 2009/10
system on major transformers - All
Regions
28 B Busbar reconfiguration, replace 3 X 5,000,000 2009/10 2009/10

Region
30 MVA transformers with 3 X 45
MVA. Replace 40 X 11 kV panels
switchgear refurbishment -
Roosevelt Park
29 All Delta sub - busbar reconfiguration, 2,000,000 2008/9 2009/10
install additional 250 MVA
transformer - Delta
30 G Ennerdale Sub - Upgrade the 55,000,000 2008/9 2009/10
existing 3 X 10 MVA transformers
to 3 X 40 MVA. Build new
building and control room to
accommodate 2 X 17 panel feeder
boards.Upgrade the 88 kV yard -
Ennerdale
31 D (A) Establish new 88/11 kV sub 95,000,000 2009/10 2010/11
station - Doornkop
32 D Extend 88 kV transmission lines to 12,174,000 2009/10 2010/11
supply two new sub stations -
Doornkop
33 A Transmission: Upgrade Noodwyk 20,000,000 2009/10 2009/10
sub station by replacing 2 x 20
MVA transformers (two of the
three) with 40 MVA (Eskom).
Build new switchroom and install
two new feederboards -Noordwyk
34 A Establishment of 88/11 kV , 5,000,000 2008/9 2009/10
45MVA S/S (2 x 45 MVA
transformers and 11kV switchroom
and feederboard) (also see P0563) -
New Road
35 B Construct new 88/11 kV 2 X 40 2,000,000 2007/8 2009/10
MVA sub station at Bryanston
Country club - Khanyisa
36 C Northriding sub. Install additional 4,000,000 2007/8 2009/10
40 MVA transformer, construct
switchroom and additional 11kV
switchboard - Northriding
37 D Transmission: Replace 88/22.5kV 6,000,000 2009/10 2009/10
transformers with the recovered
transformers from Cydna - Soweto,
Soweto/Orlando Local &
Baragwanath
38 B&F Establish 132kV/11kV substation 16,000,000 2008/9 2009/10
comprising of 2 x 45MVA trx's -
Crown
39 F Mulbarton Sub - Install additional 25,000,000 2009/10 2009/10
45MVA transformer,refurbishment
and bus bar reconfiguration -

Region
Mulbarton
40 F Transmission: Install (replace) 3,000,000 2009/10 2009/10
1X45MVA transformer - Eikenhof
41 C Transmission: Provision of 12,000,000 2008/9 2010/11
servitude for proposed 88kV
transmission lines: Dalkeith / Lutz /
Peter Rd T-point - Lutz
42 C Construct Access Road - Christiaan 5,000,000 2009/10 2009/10
de Wet
43 C C de Wet sub - busbar 12,000,000 2009/10 2009/10
reconfiguration, additional 40MVA
transformer, expand 11x11kV
switchgear, refurbishment -
Christiaan de Wet
44 C Lutz Substation. New 88/11 kV 3 X 55,000,000 2009/10 2010/11
45 MVA sub station - Lutz
45 C Install 3rd 88/11 kV 40 MVA 25,000,000 2009/10 2009/10
transformer - Peter Road
46 B New 88/11 kV substation, 2 X 40 20,000,000 2008/9 2009/10
MVA transformers and feeder
board - Pennyville
47 F Braamfontein Sub. Reconfigure bus 17,000,000 2008/9 2009/10
bar, Extend switchroom and install
- 8x11kV switches - Braamfontein
48 F Fort Sub. Replace 4 X 30 MVA 5,000,000 2008/9 2009/10
transformers with 4 X 45 MVA.
Replace 46x11kV switchgear,
refurbishment. Install additional 11
kV breakers - Fort
49 F Third transformer plus switchboard. 55,000,000 2008/9 2009/10
Refurbish 11 kV breakers and
reconfigure bus bar - Siemert
50 E Reconfigure the 88 kV double 25,000,000 2009/10 2009/10
busbar - Cydna
51 All Computer Software - All Regions 7,500,000 2009/10 2009/10
52 All Protection: Replacement of 16,000,000 2009/10 2009/10
Obsolete Relays and cables, build
new control room - Kelvin
53 B Load Management: Transmission 40,000,000 2009/10 2010/11
Equipment(Recievers) Randburg
system replacement - Randburg
54 All Metering; Replacement of obsolete 6,000,000 Multi
pre-paid meters - All Regions year
project
55 All Roll out of AMR. Replacement of 6,000,000 Multi
obsolete demand meter and year
purchase of demand meters for new project
installations to large power users -

Region
All Regions
56 All Refurbish transmitters and control 10,000,000 2009/10 2009/10
systems - All Regions
57 All 20 year service for 88 kV 8,000,000 2008/9 2009/10
switchgear - All Regions
58 All Demand Side Management in all 100,000,000 Multi
areas - All Regions year
project
59 All Refurbishment of public lights 15,000,000 2009/10 2009/10
2010 - All Regions
60 G Load management expansions - 5,000,000 2009/10 2009/10
Ennerdale
61 E Load management expansions - 40,000,000 2009/10 2009/10
Sandton/Bryanston
62 All Replacement of obsolete relays and 4,000,000 2008/9 2009/10
cables + refurbishment of bay
control and interlocking units -
Prospect
63 F Energy efficient buildings - 4,500,000 2007/8 2009/10
Reuven-Central
64 F Load management expansions - 40,000,000 2009/10 2009/10
Johannesburg
65 All Powerline communications - All 2,500,000 2009/10 2009/10
Regions
66 All Operating Capital - All Regions 30,000,000 2009/10 2009/10
67 F 2000 houses - Hospital Hill - 14,000,000 2009/10 2009/10
Lenasia ext 28
68 E Electrification of 3000 Houses in 40,000,000 2009/10 2009/10
Alexandra. (Hybrid reticulation) -
Alexandra Far East Bank ext 9
69 E Electrification of 500 Houses in 7,500,000 2009/10 2009/10
Alexandra. (Hybrid reticulation) -
Alexandra Far East Bank ext 10
70 F Transfer of capacity from Lunar 6,500,000 2009/10 2009/10
sub station to Mountain View -
Lunar
71 F Transfer of capacity from -
Doornkop sub station to Lufhereng
72 E Transfer of capacity from 7,000,000 2009/10 2009/10
Alexandra sub station to Alexandra
Far East Bank exrensions 9 & 10
73 F Transfer of capacity from Lotus sub 6,500,000 2009/10 2009/10
station to Hospital Hill
TOTAL 1,296,854,000

Table 8.2 below outlines City Power’s critical projects and the duration per project. The ward allocation
will be done per project.
Administration Ward Projects Budget Start End
Region
1 Northern Installation of double earthing Multi year
Region on MV and LV overhead 4,000,000
lines and the installation of
SEF and ARC Relays to meet
statutory and safety
requirements - Northern
Region
2 Northern Refurbishment of MV Multi year
Region infrastructure (Switchgear 2,000,000
and transformers) - Northern
Region
3 Northern Replacement of aged and/or Multi year
Region faulting MV cables - 10,000,000
Northern Region
4 Northern Upgrading of Load Centres - Multi year
Region Northern Region 2,500,000
5 Northern Refurbishment of LV Multi year
Region infrastructure - Northern 9,000,000
Region
6 B 68 Reconfigure network to 2009/10 2009/10
provide a service connection 4,000,000
to Central Rand Gold Mines.
- Industria
7 Southern Installation of double earthing Multi year
Region on MV and LV overhead 4,000,000
lines and the installation of
SEF and ARC Relays to meet
statutory and safety
requirements - Southern
Region
8 Southern Refurbishment of LV Multi year
Region infrastructure - Southern 9,000,000
Region
9 Southern Refurbishment of MV Multi year
Region infrastructure(Switchgear and 2,000,000
transformers) - Southern
Region
10 Southern Replacement of aged and/or Multi year
Region faulting MV cables - 10,000,000
Southern Region
11 Southern Upgrading of Load Centres - Multi year
Region Southern Region 2,500,000
12 C 70 Build barrier walls between 2009/10 2009/10
transformers - Sentraal 800,000
13 E Public Lighting: New and 2009/10 2009/10
Administration Ward Projects Budget Start End

Region
Additions - Alexandra 7,000,000
14 All SCADA: RTU Installations - 2009/10 2009/10
All Regions 15,000,000
15 All Domestic AMR roll out - All 2009/10 2009/10
Regions 30,000,000
16 G Installation of pre paid meters 2009/10 2009/10
and protective structures. - 40,000,000
Eldorado Park and Lenasia
17 D&F 24 Installation of pre paid meters 2009/10 2009/10
in Naturena and sectional title 20,000,000
flats. - Naturena
18 D Public Lighting: New and 2009/10 2009/10
Additions - Meadowlands 8,500,000
19 A Public Lighting: New and 2009/10 2009/10
Additions (Ivory Park) - 10,500,000
Midrand
20 G Public Lighting: New and 2009/10 2009/10
Additions - Orange 14,500,000
Farm/Lenasia
21 A Public Lighting: New and 2009/10 2009/10
Additions - Diepsloot 6,200,000
22 B 90 Public Lighting: New and 2009/10 2009/10
Additions - Rosebank 4,000,000
23 B 88 Public Lighting: New and 2009/10 2009/10
Additions - Northcliff 2,200,000
24 F Public Lighting: New and 2009/10 2009/10
Additions - JHB South 3,000,000
25 C Public Lighting: New and 2009/10 2009/10
Additions - Roodepoort/ 9,800,000
Dobsonville
26 C Install public lighting - 2009/10 2009/10
Cosmo City 2,000,000
27 F Public Lighting: New and 2009/10 2009/10
Additions - JHB Inner City 2,800,000
28 D PB Public Lighting: New and 2009/10 2009/10
Additions - Soweto 12,000,000
29 ALL The provision of emergency 2008/9 2009/10
generators for MOE's - All 30,000,000
Regions
TOTAL 277,300,000


SECTION 9: HUMAN CAPITAL
9.1. Human Capital Plans
9.1.1 Human Capital Achievement: Performance Management

City Power Johannesburg (Pty) Ltd has a two-tiered performance management system, that is a strategy
based and output based system. The performance management system links congruently with the
business plans and business planning process of the organisation. Performance management is an
ongoing integrated process aimed at guiding and managing the employee’s efforts at work to achieve
individual and corporate objectives. Great emphasis is being placed on an ongoing process to create a
performance driven culture. The elements of the performance management system are:
• Company performance compacts
• Group performance compacts
• Managing Director’s performance compact
• Directors/Departmental Head performance compacts
• Individual performance compacts
• Personal development plans
• Business performance measurement system
• Business deliverable programme management systems
• Four performance discussions per cycle
• Two performance assessments per cycle
• Two formal business reviews per cycle
• Performance management training and support systems
• Quality performance compact audit systems
9.1.2 Employee Productivity
Table 9.1 below depicts the leave types for the cycle - 1 July 2007 to 30 June 2008
Type of leave No of days % of Total
Annual leave days 31544 79.29%
Exam Leave 4138 0.81%
Family responsibility leave 460 1.16%
Long service 0 0%
Maternity leave 1538 3.87%
Paternity Leave 54 0.14%
Sick leave days 4877 12.26%
Special leave Court / Summons 3 0.01%
Special leave days – IOD 82 0.21%
Special leave days other 0 0%
Sport & Cultural 0 0%
Study leave days 232 0.58%
Unpaid leave days 672 1.69%
Total 39784
9.1.3 Human Capital Salary Costs

Table 9.2 below gives a breakdown of the total salary costs for 2007/08, and Graph 9.1 depicts the cost
driver distribution
Table 9.2: Salary cost for 2007/08

Salaries 226,335,495
Pension Fund Contributions 34,576,203
Medical Aid 29,241,368
Service & Incentive bonus 21,906,616
Car allowance 25,914,936
Overtime 47,963,316
Group Life Assurance 13,745,763
Leave Provision 14,942,403
Standby Allowances 10,278,515
Other 6,164,460
TOTAL 431,069,076
Graph9.1: Salary cost driver distribution
Salaries
Pension Fund
Contributions
TOTAL Medical Aid
Service & Incentive bonus
Car allowance
Overtime
Group Life Assurance
Leave Provision
Other Standby Allowances
9.1.4 Other Human Capital Related Costs

Table 9.3 below gives a breakdown of the other human capital related costs for 2007/08
Table 9.3: Other Salary Costs 2007/08

Cost Driver Rm
Hostel / Housing 1,183,554
Training Courses 3,100,329
Skills Development Levy 3,618,777
Conferences / Seminars 3,793,052
Long Service / Special Awards 3,814,806
Cost Driver Rm
Bargaining Council 33,794
UIF 2,306,914
Recruitment Cost 868,024
Medical Examinations 355,833
Travelling & subsistence 676,165
Other 1,474,227
Total 21,225,475
9.1.5 Human Capital Ratios
A summary of the key human capital ratios is given in Table 9.5 below
Table 9.4: Key Salary Cost Ratios for 2007/08

Indicator Ratio
Average salary cost per employee 106,951.70
Average total remuneration cost per employee 208,931.51
Salary versus total remuneration costs 51.19
Overtime as a percentage of salaries 16.56
Training cost per employee: External training 3,314.35
9.1.6 Human Capital Staffing Levels
The total staff complement of 2007/08, including permanent and contract employees, is 1924. The
complement for permanent employees as on 30/06/2008 is 1908 compared to 1890 at the corresponding
date in the previous financial year. A total of 16 contract employees were on the payroll as of 30/06/2008
versus a total of 31 contract employees on the same date in 2007. Tables 9.5 and 9.6 below give the
manpower staffing status as at 30 June 2008.
Table 9.5: Manpower staffing status per levels as on 30 June 2008

Occupational Levels Male Female TOTAL
African Coloured Indian White Total African Coloured Indian White Total
Male Female
Top Management 1 0 1 1 3 1 0 0 0 1 4
Senior Management 14 1 2 7 24 4 0 0 1 5 29
Professionally qualified 103 9 4 82 198 78 3 2 10 93 291
Skilled technical and 90 12 7 32 141 28 2 0 3 33 174
academically qualified
workers, junior
management,
supervisors, and
Technicians
Artisans (All types) 188 21 4 82 295 13 1 0 0 14 309
Administrative 108 8 1 13 130 173 13 2 37 225 355
Semi-skilled and 354 8 1 11 374 31 0 0 3 34 408
discretionary decision
making
Elementary positions 338 4 0 0 342 12 0 0 0 12 354
TOTAL (Permanent 1196 63 20 228 1507 340 19 4 54 417 1924
and Contract)

Graph 9.2: The deployment of manpower per group
CORPORATE
FINANCE, 2.49% SERVICES, 6.03%
OFFICE OF THE
MD, 2.91%
CUSTOMER
SERVICES,
15.59%
ENGINEERING
OPERATIONS,
55.87%
ENGINEERING
SERVICES,
17.10%
The human capital staffing trend, including temporary workers, is given in Graph 8. 4 below:
Graph 9.3: Human Capital Staffing Trends

2020
2000
1980
1960
1940
1920
1900
1880
1860
30.06.01 30.06.02 30.6.03 30.06.04 30.06.05 30.06.06 30.06.07 30.06.08
Series1 1988 1980 1990 1952 2003 1954 1909 1924
Graph 9.3: Human Capital Outflow:
160
140
120
100
80
60
40
20
0
30.06.01 30.06.02 30.06.03 30.06.04 30.06.05 30.06.06 30.06.07 30.06.08
Early retirements / voluntary 0 0 0 0 12 2 2 3
seperations
Normal retirements 16 9 65 46 14 15 13 18
Natural attrition 10 22 91 99 103 138 155 63
Dismissal 2 3 26 11 5 4 8 7
Medical Boardings 1 1 2 1 1 3 5 2

9.1.7 EE Report
City Power achieved the submission of an Employment Equity Report dated ‘1 October 2006’ as part of
it’s compliance with the country’s legislative requirement in terms of the Employment Equity Act.
The company target on affirmative action (AA) for 2007/8 financial year end was 70%. The Company
achieved a 72.69% affirmative action rate for supervisory levels and above)m and 85.34% for all levels.
The company target on gender equity (GE) for 2007/8 financial year end was 20%. The Gender Equity
ratio for the whole Company by 30 June 2008 was 21, 67% (all levels – bottom up). The numbers for
‘people with disability (PWD’s) the target for 2007/8 was 15 and by the 30 June 2008 we went to 16.
It is, therefore, clear that the company has delivered in terms of Employment Equity. Numbers,
structures and policies are in place in order to govern this area; however, these aspects still require some
improvement and enhancement because the organisation is dynamic. Even though the Electricity
Distributions Skills Base has been dominated by males, the current profile reflects that there has been an
improvement in the achievement of targets that the company set for itself over past years.
The target set for affirmative action has been exceeded. Targets set for gender equity and people with
disabilities were influenced by the scarcity of skills, as well as competition for scarce skills, in the labour
market. To show its commitment to implementation of the Act the company has established the
following official forums;
• Employment Equity Forum
• Skills Development Forum and
• Women’s Forum
9.2.1 EE Plan for 2008/09
Table 9.7 below shows the EE targets for the company:
Table 9.7: EE targets for the company

Measure Unit 05/06 06/07 07/08 08/09 09/10 10/11
Indicator Actual Actual Actual Plan Plan Plan
Affirmative
action % 67.65 73 72.69 70 70 70
Gender Equity % 19.28 23.53 21,67 20 20 20
Tables 9.8 to 8.10 below illustrate the group AA targets
Table 9.8 AA targets for the groups
ACTUAL PLAN PLAN

MEASURE UNIT
2006/7 2007/8 2008/9
Customer Services % 81.72 82 82
Engineering Services % 47.86 70 70
Engineering Operations % 64.33 70 70
Financial Services % 78.57 69 70
Corporate Services % 81.81 91 90
Office of the MD % 73.10 80 80

Table 9.9: GE targets for the groups

ACTUAL PLAN PLAN
MEASURE UNIT
2006/7 2007/8 2008/9
Customer Services % 45.08 45 50
Engineering Services % 18.43 20 20
Engineering Operations % 7.48 20 20
Financial Services % 49.00 53 55
Corporate Services % 57.48 56 58
Office of the MD % 50.00 60 60
Table 9.10: PWD (People with Disability) targets for the groups
ACTUAL PLAN PLAN
MEASURE UNIT
2006/7 2007/8 2008/9
Customer Services No 2 3 4
Engineering Services No 3 4 5
Engineering Operations No 4 5 7
Financial Services No 2 2 3
Corporate Services No 2 2 3
Office of the MD No 0 1 1
9.1.8 Skills Development
A total of 2,713 employees were trained during the 2005/06 financial year compared to 2,093 employees
during the same period in the 2006/07 financial year. These figures are inclusive of employees that have
attended more than one training session. A substantial portion of these numbers represents employees in
ABET. Table 9.11 below illustrates training per employee:
Table 9.11: Training per employee

Summary of Training per employee for the financial year July 2006 - June 2007
Month Staff No. of Percentage of Training no. of NQF aligned
compliment employees employees days training programmes
trained trained programmes
Jul ‘07 1935 118 6% 915 6 4
Aug ‘07 1910 116 6% 941 8 5
Sep ‘07 1903 113 6% 764 7 5
Oct ‘07 1924 170 9% 1049 9 5
Nov ‘07 1926 67 3% 494 8 4
Dec ‘07 1928 14 1% 36 2 0
Jan ‘08 1937 0 0 0 0 0
Feb ‘08 1931 80 4% 665 5 4
Mar ‘08 1934 100 5% 626 5 4
Apr ‘08 1911 78 4% 594 5 4
May ‘08 1906 111 6% 556 12 7
June ‘08 1924 127 7% 629 9 4
Annual
actual 1,922 1094 7269 76 46

9.2 BEE
9.2.1 BEE and Engendered Spend
Spend on BEE and an Engendered company has been gradually rising since 2005 to present as shown in
table 9.12 below:
Table 9.12 BEE and an Engendered

FINANCIAL YEAR BEE SPEND ENGENDERED SPEND
2005/6 R804, 880, 904 R164, 733, 707
2006/7 R1, 003, 758, 485 R177, 840, 980
2007/8 R1, 363, 077, 928 R300, 537, 777
2008/9 R1, 452, 033, 721 R322, 027, 231
2009/10 R1, 541, 734, 646 R344, 858, 791
The BEE target for 2007/8 was 70%, and City Power has exceeded this target by achieving 73%. The
Engendered spend target has, over the years, proven to be a difficult target to meet as there are few
companies who can render projects with high value spend. However, for 2007/8 City Power has
managed to achieve the 22% target that was set.
9.2.2 Training and Capacity Development

For developmental purposes, the BEE unit has coordinated training programmes to address the capacity
needs of BEE, Engendered and Emerging companies.
Training took place was on:

• Cable Jointing (LV, MV, SOPS and Access) - 46 contract workers have been trained
• Tendering Processes- 22 suppliers were trained. This training targeted those companies that
have been tendering with City Power, but not being awarded any tenders for various reasons.
The training was focused on the whole process, from bid specification to award, and how bid
documents should be completed.
9.2.3 Supplier Summit
City Power hosted a supplier summit on the 10th of April 2008, with a view to create a platform for
interaction, to build sound relationships and open up communication channels with its supplier base.
And also encourage inter-supplier communication. The summit was organised internally, unlike the
years where it was outsourced.
The speakers for the day were from the Department of Trade and Industry (DTI) and City Power.
Suppliers were very pleased about the topics which covered the understanding of the Preferential
Procurement scorecard, electricity service delivery, City Power procurement processes, demand side
management and energy efficiency.
9.2.4 Supplier Audits

Supplier audits are done to evaluate the BEE status of companies that City Power has contracts with, and
those suppliers that want to do business with City Power. This is proving to be successful as some of the
companies that are manipulating our BEE objectives are being removed.
In the 2007/8 financial year, two (2) companies were suspended due to fronting practices, and they are
no longer rendering their services to City Power.
9.3 HIV and AIDS
9.3.1 HIV/Aids Structures

A comprehensive support structure aided this project, which includes comprehensive case management,
an HIV/Aids Steering Committee, the availability of trained Peer Educators, voluntary counselling and
testing, 24 Hour Employee Help Line, etc.
9.4.2 Education
The Company has a fully-fledged clinic, which is manned by Professional Health Practitioners (1
Doctor, Social Workers and Occupational Health Nurses). The clinic was also extended to other
geographical areas within the Company. An ongoing education programme has been instituted with the
assistance of these Practitioners, amongst other duties. This initiative is progressing well.
9.4.3 Monitoring and measuring of performance

• Monthly, quarterly and annual reporting to SHER Committee & Board
• Case management of infected employees
• Quality assurance by the City Power HIV/Aids Steering Committee
• Alignment with the National Policy and World Health Organisation
• Networking with Non-Governmental Organisations
• Benchmarking with prominent and well established Organisations
• Aligning the City Power HIV/Aids policy & strategy with CoJ policy
9.4.4 Case Management
Employees that have declared their status have been put on a treatment regime i.e. immune boosters &
ARV’s, nutrition support, depending on the stage of their infection.
HIV/AIDS PROGRAMME PLAN : JULY 2008 – JUNE 2010
Table 9:14 HIV/AIDS Programme Plan
Task/ Deliverable Objective
1. Disease Management Provision of:

o Ongoing case management
o Ongoing one on one VCT
o Provision of ARV’s, immune boosters, supplements such as
insta-meal and post exposure prophylaxis
o Treatment of sexually transmitted infections, opportunistic
diseases and TB supervision
o Compliance counseling and support
o Assessment tests
o Monitoring tests
o Male and female condom distribution
o Healthy lifestyle management
o Laboratory monitoring
o Top up funding for extended family/community support
o HIV Test kits
o Healthy lifestyle management
Task/ Deliverable Objective
2. Care & Support Provide care and support for infected and affected employees, as well as
their next of kin.
Identify and adopt a school or orphanage home within the City Power
region with the view of extending our service to the community.
3. Education & Training Conduct ongoing HIV/Aids workshops (preventative and educational),
knowledge and information sharing sessions to the business via group
meetings, intranet, hand-outs, flyers, posters, portable banners. Engage
PLWA (Person Living with Aids) as well as establish a support group.
Conduct lunch hour talks.
Participate and observe national and international health awareness days.
Market the HIV & Aids programme with the view of ensuring
programme visibility and utilisation thereof.
Train management and engage them in campaigns.
Create online education and website.
4. Peer Educators Training Training of newly appointed Peer Educators. Advance and refresher
and advanced/refresher courses for existing Peer Educators.
courses
5. Campaigns Conduct campaigns such as VCT , reproductive health, cost impact study,
condom distribution, TB and other opportunistic infections programmes
etc.
6. Internal Helpline Information dissemination and telephone counseling for infected and
affected employees as well as their next of kin.
7. Empowerment of staff Attendance of educational courses seminars ans conferences.
8. Programme governance Continuous monitoring and evaluation of programmes, policy review and
benchmarking with other companies.
SECTION 10 DEPENDENCY MATRIX
Table 10:1 Dependency Matrix

No Inter-Departmental Dependency Department/ME and Departmental Response
Description Individuals Assigned
Responsibility
1 Housing Department(Local and Infrastructure Alignment of Electrification
provincial) coordination with housing master plan

committee(ICC)
2 Provision of grant funding for Electrification Sourcing of funding from DME
Electrification & public lighting And Public lighting from & MIG by City Power
DME & DPLG
3 Approval environmental impact Gauteng dept of Compliance with the
assessment for infrastructure Agriculture GDACE Environmental impact
projects Assessment (EIA )act
4 Way leave applications JRA Processing of Way leaves prior
to project execution
5 Approval of township Township Planning Participate in the commenting
establishment/subdivisions department process for township
establishment(compliance to
turnaround times)


2009 - 2014 Annual Business Plan

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City Power (PTY) LTD

Continuous Strategy Improvement - Rev 17 – Page 3 of 131

Continuous Strategy Improvement - Rev 17 – Page 5 of 131

SECTION 1: EXECUTIVE SUMMARY

Continuous Strategy Improvement - Rev 17 – Page 6 of 131

1.2 Structure of the document

Section1 is the Executive Summary.

Section 5 is the Departmental Balanced Scorecard, a framework for performance monitoring.

Continuous Strategy Improvement - Rev 17 – Page 7 of 131

SECTION 2: COMPANY OVERVIEW

2.1 Vision, Mission and Mandate

2.1.4 Business Operations Principles

Continuous Strategy Improvement - Rev 17 – Page 8 of 131

2.1.7. Organisational Management and Structure

Continuous Strategy Improvement - Rev 17 – Page 9 of 131

Table 1.1: Board members

Board Sub-Committees and their Members

Continuous Strategy Improvement - Rev 17 – Page 10 of 131

Audit Committee Members

The Audit Committee consists of the following directors:

Table 1.2: Audit Committee members

Table 1.3: Human Resources and Remuneration Committee members

Continuous Strategy Improvement - Rev 17 – Page 11 of 131

Pricing & Regulatory Committee Members

The Pricing and Regulatory Committee consists of the following directors:

Table 1.4: Pricing and Regulatory Committee members

Board Oversight Committee Members

The Oversight Committee consists of the following directors:

Table 1.5: Oversight Committee members

The Ad Hoc EDI Working Group consists of the following directors:

Table 1.6: EDI Working Group

(Ad Hoc) Turnaround Strategy Working Group Members

Table 1.7: Turnaround Strategy Working Group

Continuous Strategy Improvement - Rev 17 – Page 13 of 131

2.2 Description of day-to-day operations

Continuous Strategy Improvement - Rev 17 – Page 14 of 131

2.3 Quantitative Indicators

Figure 2.1 Business Model

2.3.1 Provide Network Infrastructure

Table 2.1: Network Infrastructure

Figure 2.2: City Power Johannesburg (Pty) Ltd Networks

Continuous Strategy Improvement - Rev 17 – Page 16 of 131

Eldorado, Nancefield, Pritchard, Siemert, Central,

Continuous Strategy Improvement - Rev 17 – Page 17 of 131

Table 2.2 Restoration Times

2.3.4 Suppliers of Materials

Continuous Strategy Improvement - Rev 17 – Page 18 of 131

Table 2.3: Top 15 Suppliers of stock materials by value 2007/08

Continuous Strategy Improvement - Rev 17 – Page 19 of 131

Graph 2.4.Customer Base

Graph 2.5: Customer Base Distribution

Key Customers Large Power Users

Continuous Strategy Improvement - Rev 17 – Page 20 of 131

Table 2.6: Top 20 Customers

1 220063623 Rand Water 69,707,875

The following are the main challenges:

Continuous Strategy Improvement - Rev 17 – Page 21 of 131

2.3.5.3 Network Related Contacts

2.3.5.4 Non-Network Related Contacts