Impact of Power Cuts on Municipalities: briefing by Cape Town and Johannesburg Municipalities

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Meeting report

Select Committee on Local Government and Administration

LOCAL GOVERNMENT AND ADMINISTRATION SELECT COMMITTEE
20 June 2006
IMPACT OF POWER CUTS ON MUNICIPALITIES: BRIEFING BY CAPE TOWN AND JOHANNESBURG MUNICIPALITIES


Chairperson Mr S Shiceka  (ANC, Gauteng)

Documents Handed Out
The Impact of Power Outages on Water Services - Power point presentation by the City of Cape Town
City Power and City of Johannesburg Presentation to the Select Committee on Local Government and Administration

SUMMARY
A presentation was made by the City of Cape on the impact of power outages on water services. This included background information who supplied Cape Town with Electricity, why the power shortages occurred during February/March 2006, and their impact. The mitigation measures to eradicate the problems, by way of the 90 days Western Cape Recovery Plan, were explained, together with brief insight into some of the challenges which would have to be overcome. The impact on bulk water, water reticulation and sewage reticulation systems was discussed, and examples were given how power saving would be achieved. Questions raised by Members included the effect that the new plant would have, alternative sources of energy, including gas, the possible revival of the Athlone power station, the progress on the pebble bed reactor, the billing system and the quantification of loss from the outages.

Representatives from the Johannesburg Municipality presented the obstacles they had overcome, the progress they were making, as well as the challenges they were facing with the issue of power supply in Johannesburg. City Power presented its initiatives to reduce outages and the network master plan. It tabled an overview of the substation transformers. Questions were raised on the revenue collection, the compilation of tariffs and the communications with clients.

MINUTES
City of Cape Town presentation
Mr Manfred Kuster (Eskom liaison, City of Cape Town) and Mr Sipho Mosai (Director Water Services, City of Cape Town) informed the committee that the City of Cape Town (CCT) and Eskom were Cape Town’s electricity providers. The February and March 2006 power shortages were primarily due to the unscheduled refueling outage of one of the Koeberg units, resulting in a lack of supply to the Western Cape. Mr Mosai discussed the impact of the power cuts on the CCT. The main issue was the fact that consumers could not access the services which were due to them. Business was negatively impacted, with a reduction in sales and revenue, and there was deterioration of the relationship between business and the CCT. Vital systems, such as telephone communications, e-mailing systems and many other computer-based systems were shut down. .

The mitigation measures set to overcome the challenges faced due to the loss of power supply involved a short term demand service management (DSM), where load shedding would take place, and the repair of Koeberg station. Medium term DSM would deal with a strengthening of the new local gas turbine generation and transmission system. Long-term measures would include a local based load generation, an improved communication plan and a risk analysis and mitigation matrix. Both Eskom and CCT Electricity Services had since implemented processes and systems which communicated regularly and, if possible, in advance to the consumers via the media. These were supported by dedicated call
centre help lines.

The challenges to be overcome involved the damage and the losses suffered by consumers as a result of the power cuts, and consumers’ reduced confidence in the electricity industry. CCT and Eskom needed to work together in order to overcome their problems, and produce an integrated operational system to protect sensitive industries, including the health sector, bakeries, and oil refineries. There also needed to be a trustworthy and accurate form of communication regarding the load shedding plans. The public would also need to be educated on the interaction of supply and demand, as well as the time of use characteristic of electricity consumption.

The presenters dealt with the impact of electricity supply on water services. The impact of power outages on bulk water supply was minimal because the reservoirs had sufficient storage capacity in winter for prolonged power shortages. The impact on water reticulation was also minimal because the city was predominantly gravity fed. There was a risk in the supply of high lying areas which were supplied by small service reservoirs, and a risk that small reservoirs would run dry during peak demand periods if pump stations were inoperable due to outages.

The impact of power outages on sewage reticulation was that the 400 pump stations were at risk of overflowing as the waste could not be pumped out, although it still kept flowing in. If the power outage lasted for two hours or less the risk of overflow was low, but prolonged outages would put the plant at risk of overflowing into storm water systems, thus polluting the water. Waste water treatment had similar challenges because outage times exceeding two hours could cause problems resulting in decline in the quality of water supplied.

General function suffered productivity losses, scientific services encountered a backlog in testing, and administration systems could not function without communication, which was largely reliant on e-mail.

Power saving was achieved by avoiding the operation of pump stations during peak periods at bulk water supply stations. Plants without generation capacity, and energy intensive processes were scheduled for off-peak periods. This would also apply to water and sewage reticulation.

Discussion
Mr J Le Roux (Eastern Cape) asked CCT if the same problems would be faced when the new plant was built. Mr Le Roux asked for details on the gas capacity and for clarification on comments that the new light bulbs did not last long.

Dr Bulumka Msengana (Executive Director Services & Infrastructure, City of Cape Town) reported that the new plant would generate almost a quarter of the electricity required to power the city, and the problems would be drastically reduced.

Mr Mosai added that although he could not answer the question on light bulbs, as he was not an expert, there were various articles explaining the function of the light bulbs available.

The Chairperson requested that the CCT must discuss alternative power sources, particularly whether gas was a cheaper alternative, because most appliances being sold did not use electricity but used gas. He also asked on the impact of gas on the environment and the people.

Mr Mosai responded that not enough was known about the capacity of gas, which was still a new option, and that its price would have to be related to the fluctuations of crude oil prices. It was certainly a possible energy source, and was also available.

Mr A Watson (Mpumalanga) asked if the City of Cape Town had investigated reviving the Athlone power station. He suggested that daylight power saving take place. He enquired how much power was lost along the way from Mpumalanga.

Dr Msengana responded that the Athlone power station was not likely to be operational soon. The power being lost was difficult to determine, but could be approximately 20%.

Ms F Nyanda (Mpumalanga) queried whether the pebble bed reactor was operating, and if not, what the problems were. She asked why plants were not being built in Cape Town to generate energy and could also create employment.

Mr Mosai responded that the pebble bed project was still in progress but that there was still much testing required.

Ms Nyanda believed that gas was not safe, because people could not operate utilities such as fridges and stoves. She pointed out that many people experienced problems in finding gas when there was no electricity.

Councillor Roelf responded that gas was safe, was regularly used overseas, but it was merely a question of educating people and getting them used to using gas.

Mr N Mack (Western Cape) asked who would pay for expensive electricity, and how the poorest of the poor would be affected. He also asked how people would know where load shedding was taking place, and if there had previously been meetings and agreements. Finally he enquired what was being done to try to regain confidence in the CCT.

Mr Mosai stated that the billing system and charges would be directly related to the electricity consumption, so that the less electricity was used, the less would need to be paid.

Mr Z Ntuli (Kwazulu Natal) asked if the loss incurred by the City could be quantified, and if power outages had an impact on voter turn out.

Councillor Roelf responded that it was difficult to quantify the losses incurred. The voter turnout did not appear to have been affected, as the voting trends had not changed significantly.

Presentation by City Power and City of Johannesburg
Ms Roslyn Greeff (Councillor, City of Johannesburg) and Mr Silas Zimu (CEO, City Power) summarized the obstacles they had overcome, the progress they were making as well as the challenges they were facing in power supply in Johannesburg.

Ms Greeff informed the committee that Johannesburg was experiencing growth and expansion, which led to infrastructure development and an increase in energy demand. The City of Johannesburg (CJ) was committed to meeting the needs of it consumers and it would manage to reduced the outages by 50% by 2010, due to CJ’s dedication and efforts. Already the City of Johannesburg had invested more than R4 billion to deal with its problems.

Mr S Zimu stated that 80% of the energy was from Eskom, and 20% from independent sources. Power development had to be considered together with its challenges. These included the fact that the current network condition was old and technologically obsolete in terms of infrastructure. Problems included poorly insulated switchgears, as well inadequate monitoring and protection systems which resulted in a high number of outages. The plant’s maximum life cycle had been exceeded and there was no system integration.

The initiatives listed to reduce outages included a network master plan, Eskom (PTM) Engineering Studies, detailed audits by original equipment manufacturers (OEMs), internal audits, focus on planned maintenance and purchase of the network modeling tools.

City Power had created a network master plan, where consulting engineers were appointed to assist in the preparation of short, medium and long term transmission and distribution plan for the Midrand area of supply, and the NET group was appointed to assist in consulting in these plans outside the Midrand area.

The overview of the substation transformers was tabled. The transformer dated back to 1936, and no development had since taken place. A five-year plan had been adopted involving refurbishment of old rotors, as new ones would not be cost or time effective, and replacement of switchboards. An upgrading of the
programme would take place via an integrated development plan (IDP), where general costs could be reduced, overloaded networks could be upgraded, and other issues dealt with.

Councilor Greeff then added that Johannesburg had grown by 6% in the last year, and the need to supply consumers made outages a non-option.

Mr Peter Coetzee (City of Johannesburg, Contract Management Unit) also added that the City of Johannesburg would have to work with government so as to adopt a strategy, reach targets and adopt a proactive role.

Discussion

Mr A Moseki (North West) asked if communication between Johannesburg and its citizens had improved because complaints had been made that people were unaware of developments. He also asked how far Johannesburg was in integration and achieving its goals.

Mr S Zimu replied that communication was good; all clients had to be given a notification and the planned programmes so that they would be aware of what was happening

Mr Z Ntuli (KwaZulu-Natal) asked what was being done to manage revenue collection, and what problems had been experienced.

 Mr S Zimu replied that those living in suburbs were only paying if services were being delivered, although more people were demanding prepaid electricity because the technology had improved, and they were uncomfortable with strangers taking the meter readings. Some companies delayed in paying bills even though they knew that they owed substantial amounts, and so City Power was trying to eradicate the problem.

Mr N Mack (Western Cape) asked how tariffs affected the poor, and if the 6% growth would increase economic activity. He congratulated the City of Johannesburg on their work.
 
Mr S Zimu responded that tariff specialists dealt with the issue of tariffs as best as possible, and that the growth of Johannesburg was accompanied by investment, particularly in view of the World Cup. They City of Johannesburg was equipping itself for these changes.

The Chairperson commented that another problem with billing was that systems were not integrated.

The meeting was then adjourned.


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