TSHIFULARO MASHAVA | Innovation driving 'the City Power of the Future'

Sometimes change presents itself as an alluring option loaded with exciting prospects of development and unexplored opportunities. This usually stems from self-realisation and awareness of the need to improve. Such form of change is generally easier to embrace. In some instances, however, change is forced on us by evolving and unwanted circumstances we were not ready for. This form of change is often trickier and almost inconceivable.

In the fast-changing energy generation and distribution world, City Power Johannesburg has had to adapt to both types of changes. We, too, are subject to externally imposed and internally driven change.

At the top of the list of what needs to change is City Power's excessive dependence on Eskom as the main source of its power supply. We need to move more towards eco-friendly and cheaper renewables to meet the energy needs of the people of Johannesburg.

Externally imposed changes refer to, among other things, new technologies in the market; the number of new households that demand energy; the ever-developing awareness of how energy generation can have an impact on the environmental sustainability of our planet; and the evolution of the customer needs for energy.

It will be remiss to not mention the unfortunate spectre of load-shedding as one of the most pressing drivers of City Power’s need to change how we do business.

In fact, referring to “energy” instead of electricity when discussing these changes, is in itself an indication of the evolution we are talking about.

There was a time once when City Power could be accurately described as the Johannesburg “electricity utility”. These days, that description falls short.

City Power's business has become about much more than generating electricity and selling it to the residents and businesses of the Johannesburg. Our business has become about identifying and providing the best, most cost-efficient, customer-friendly, environmentally sustainable energy solutions to the people of our city.

Taking lessons from history

As an energy utility, we are optimistic and excited about the future — the City Power of the future. We appreciate that, to have the kind of future we deserve, we must do a lot in the present to fix what was done in the past.

Almost needless to say, such change first demands that the leadership of an entity appreciate that it can no longer be about business as usual. What might have worked a decade ago, may not necessarily work today. Failure to envision, embrace and position ourselves in line with global changes will set us back and possibly render us obsolete.

One of the lessons from the history of the industrial civilisation is that change doesn't often unfold in linear and baby-step methods, but rather in seismic proportions. 

Not many, for instance, could have imagined that the great technological inventions from the 19th and early 20th century such as the majestic steam train and the 1-horsepower internal combustion engine vehicle could ever be superseded, given the sheer scale of the cutting-edge concepts at the time. 

George H Daniels, one of the leaders of the New York Central and Hudson River Railroad, made this bold assertion in the Brooklyn Daily Eagle in the year 1900: “It is scarcely possible that the 20th century will witness improvements in transportation that will be as great as those of the nineteenth century.”

Yet, within a space of five years, the Wright brothers launched a fully functioning aircraft and, a few decades from then, the first satellite was launched into Earth's orbit. 

Anyway, back to my point about how City Power needs to evolve as an organisation to avoid facing what history points to as an inevitable outcome.

Naturally, over time, this could lead to a sense of uncertainty among those within the organisation, as well as suppliers and customers. It is perfectly understandable that human beings are seldom comfortable with change.

Part of our role as organisational leaders is to manage the process of change and ensure that it is as smooth as possible, even as it is disruptive in some areas. What we cannot do, is do nothing just because some people prefer how things used to be even when there are better, more efficient ways of doing things.

Addressing revenue collection

Crucial to City Power’s evolution is how we manage energy stability and revenue collection. These are mutually inclusive.

Billions are owed to us by households, businesses and, regrettably, even provincial government departments.

As things stand, the company is unprofitable due to revenue targets not being met. This is mainly driven by load-shedding, which resulted in a decrease in sales and high non-technical losses such as damage to City Power assets and vandalism.

Our ability to provide a reliable energy source for the people of Johannesburg depends on us having the financial resources to do so. At the same time, customers must feel convinced that they are paying fair value for the energy and the service they receive from City Power.

To debate which should come first is as futile as the proverbial debate about the chicken and the egg.

Also essential to City Power's relationship with our customers is them remembering that they have obligations to pay for the services they consume.

A false impression has been created that the poorest are the ones who do not pay for the services they receive. Our research shows that even in the most affluent suburbs, many choose to not pay for the energy they consume or connect illegally.

The culture of entitlement, with its historical roots, seems to be an equal opportunity disease in our city irrespective of address, income bracket or social standing. It cannot and will not be tolerated. It's crucial to demonstrate our commitment to collecting the amounts owed to us.

To this end, we have established a Collection War Room together with a Revenue Shared Services Centre, led by City of Johannesburg city manager Floyd Brink, to discuss the issues that are hindering collection and recoup the outstanding debt from government departments to platinum accounts.

The results are already showing. In many instances, customers have paid their accounts in full, which shows it is not about affordability, and those who could not, have entered into arrangements to do so.

As we do all this, we are painfully aware that many in our city live in abject poverty and cannot afford to pay for their electricity.

As a City of Johannesburg entity, we have responded to the city’s leadership commitment to raise the amount of energy we provide to indigent households from the national legislation baseline of 50kWh up to 120kWh.

Fast-tracking progress and lessening the impact of load-shedding

As the company’s leadership has stabilised in the past year, we have had to play catch-up on projects that were behind schedule. In other instances, the pace of changes in the external environment have demanded that we too, up our speed.

City Power has an annual budget of R2bn. In the first quarter of the financial year, our expenditure amounted to R207m — R26m more than the quarterly budget of R181m — and we have seen an improvement in our ability to execute projects.

The over expenditure is as a result of fast-tracking programmes, which are critical for service delivery, as well as facilitating renewable energy rollout to alleviate load-shedding, and a lot of work is under way in that regard.

The relentless blackouts have seen the entity bleeding money in the past few years, with at least R3.6m lost every day there is load-shedding — mainly to minisubstations that blow up, replacement of equipment that fails, cables that get stolen, repairs on vandalised infrastructure, extra labour costs due to load-shedding overtime hours, and loss of projected revenue.

We do not want to mention the impact this load-shedding has on our customers, especially businesses, some of whom had to close shop, and the jobs that have been lost as a result.

As City Power, we continue to work hard to find solutions to lessen the impact of load-shedding on our customers, and our employees. As part of this quest, we recently took over the implementation of load-shedding from Eskom.

This move was warmly welcomed by our customers, with most indicating that, for the first time in a long while, they've enjoy having the lights on for a longer duration in their homes.

Doing so also means City Power is now able to exclude businesses and providers of essential services such as water and health facilities from load-shedding, thus saving lives, saving jobs, and attracting and retaining much-needed investments in the City of Johannesburg.

With any change, comes the risk of teething problems — and we were not spared these when City Power took over the implementation of load-shedding. However, an essential aspect of change is to acknowledge the challenges that come with it, and work on fixing them.

City Power has acknowledged the challenges associated with the back-to-back, two-hour episodes of load-shedding in the lower stages, we and are fixing that. We accept that it is work in progress, which we are confident of getting right. In doing so, we will continue to listen to what our customers want.

Embracing new technologies on the road to a sustainable future

As we move towards the City Power of the Future, we embrace change along the way, including changing our operating model to synchronise with the environment we operate in. We've had to rethink how we do certain things. More importantly, we had to think about our customers.

Our core activity encompasses buying and selling of electricity. In the regulated environment in which operate, it's imperative for City Power to ensure Johannesburg residents are provided with secure, sustainable and universal access of electricity, and that operational costs are kept in check and managed in a prudent manner to ensure sustainability.

The intentions of City Power's Sustainable Energy Strategy are clearly articulated in its business plan. These are:

• Energy equality, which speaks to access for all;
• Energy independence, which speaks to reducing reliance on Eskom;
• Energy security, which speaks to the energy mix ; and
• Energy supply, which speaks to stability of network and minimal outages.

City Power has already rolled out various energy mix initiatives, which should give us significant capacity to be able to offset some of the lower stages of load-shedding, while contributing to job creation and SMME development.

Such initiatives include the implementation of Independent Power Producers Procurement Programme, the installation of rooftop photovoltaic (PV) systems and the development of a PV micro-grid system, and the installation of Ripple Relay Geyser Control Systems, among other initiative. 

While all these initiatives are critical in turning this ship, City Power's smart meter and load-limiting initiatives have the potential to be the biggest game-changers — these technologies literally place power in the hands of the customer.

Smart meters allow customers to manage their electricity usage in real time and, where they have excess capacity, to resell it to City Power.

For City Power, the benefit is we can read customers’ smart meters, limit the load and cut off those who default on their bills remotely. This assists us in managing revenue collection — the days of customers thinking they can avoid having their electricity cut off by not being home (or pretending they are not home) are over.

Load limiting, on the other hand, gives the customer flexibility during load-shedding. In theory, instead of the entire city being without power with an Eskom-imposed bout of load-shedding, City Power could reduce the amount of electricity available per household (from 10kWh to 5kWh, for instance) giving customers the choice of how they would like to use the available power.

Implementing the Provincial Alternative Energy Plan

It his state of the province address, Gauteng premier Panyaza Lesufi announced the Provincial Alternative Energy Plan with City Power as an implementing agency — and we have already moved forward a great deal in this regard. 

City Power has signed memorandums of agreement with the Gauteng provincial, the department of cooperative governance & traditional affairs, and various local municipalities, such as Emfuleni, for our entity to deliver alternative energy programmes to mitigate load-shedding across the province. 

Such programmes include solar high mast public lighting systems, pole-mounted transformers and miniature substations, and smart metering technologies. These are already being implemented in City Power's supply areas and we are ready to roll them out to the local municipalities around Johannesburg.

As with any pioneering paths, we expect to encounter the unexpected as we move into uncharted terrains. The enthusiasm of the private sector companies involved in energy generation and distribution, as well as the proven support for our vision shown by the Gauteng provincial government led by the premier, and the city government under executive mayor Kabelo Gwamanda, MMC for environmental and infrastructure services Jack Sekwaila and the rest of the executive, gives us confidence to meet these challenges and prepare City Power for an innovative future in the energy sector.

As City Power, we are confident we will swim through this change and ensure the entity is viable, provides reliable power supply to our customers, and cushions the residents of the city from the gruelling impact of load-shedding.

This article was sponsored by City Power Johannesburg.