7.1 Business Enviroment
7.1.1 Customer Base
The total area for the City Johannesburg is approximately 2 300 km2. Statistical sources indicate various population estimates for the city. The Greater Johannesburg Strategic Metropolitan Development Framework estimate the population in 1998 at 3 800 652, whilst the Council documents use the 1996 Census as a base line which estimate the population at the time at 2 521 353 (excluding Midrand, Modderfontein and Edenvale). A key problem in this regard is the difficulty of interpreting historical data in the light of changing local authority boundaries
The anticipated future population growth rates also vary significantly. The Metropolitan Development Framework anticipates a 3,4% growth rate.
A study commissioned by the Department of Water Affairs, which was conducted by Prof Schlemmer of Markdata, resulted in two scenarios of expected population growth. The results of the study are shown in the below:
Population Growth Rates
The table below gives a more detailed Population Growth Prediction for the City of Johannesburg. The low scenario will be used or all future planning.
Population Growth Rates
The projected number of City Power customers is given below.
Customer Base
7.1.2 Electricity Distributors
There are currently two electricity distribution supply authorities within the GJMC area of jurisdiction - City Power and Eskom.
It is estimated that there are 800 000 customers served by both Eskom and City Power. The projected growth in electricity customers is given in the table below:
Total number of electricity customers
7.1.3 EDI Restructuring
The Electricity Distribution Industry in South Africa is undergoing a restructuring process, which is expected to be completed in the next two to three years. The nearly 400 distributors will be reduced to six Regional Electricity Distributors (REDs). City Power will be RED 4 or form the core of RED 4.
The objective for determining the number and composition of the REDs is to ensure that each RED remains an economically viable entity. The electricity restructuring process will remove the direct control of electricity distribution matters from the GJMC.
7.2 Vision
A world-class electricity Company striving for the social and economic development of the Region
7.3 Mission
To meet the expectations of our customers and stakeholders by:
- Providing a sustainable, affordable, safe and reliable electricity supply
- Provide prompt and efficient customer services
- Developing and incentivising our employees
- Being the preferred equal opportunity employer
- Undertaking our business in an environmentally acceptable manner
7.4 Values
The following values guide our behaviours:
- Respect and honesty
- Loyalty
- Ethical business conduct
- Pride and ownership
- Service Excellence
- Superior Performances
- Team Culture
7.5 Operating Principles
The following principles guides our decision making in the Company
- Zero tolerance for service failures
- Core business functions are Customer Service and Operations
- Support functions are Finance, Corporate Services and Commercial
- Support functions are robust specialists/consultants and are service providers to the core business functions
- Seamless operations
- Manage value chains
- Optimum devolution of power
- Value adding activities at every level
- Minimum duplication of activities
- Optimum empowerment at each level
- Enhancement of commercial capabilities
- Competitive at National and Regional level
- All investment decisions will be business case driven
7.6 Core Competency
The core competency of City Power is the distribution and selling of electricity to customer
7.7 Business Organisation Structure
7.7.1 Legal
7.7.1.1 The National Electricity Regulator
The NER grants licences for distribution, approves tariffs and sets standards to the following (but not necessarily limited to):
- Quality of Supply
- Quality of Service
- Licensing issues
- Tariffs
7.7.1.2 Acts
The following acts are applicable to City Power's operations and no changes are envisaged:
- The Constitution of the Republic of South Africa 108 of 1996
- Municipal Systems Act, 32 of 2000
- Local Government Transition Act, 209 of 1993, as amended
- The Local Government: Municipal Structures Act, 117 of 1998
- Local Government Transition Act, 209 of 1993, as amended
The following act is also applicable to City Power's operations and changes are envisaged:
- Electricity Act (to accommodate the formation of REDS)
7.7.1.3 Bylaws
- The Municipal Bylaws of the City of Johannesburg (The impact of the Bylaws will be unpacked during the next planning cycle)
7.7.2 High Level Organisation Design
The Organisational Structure presented in the Business Plan includes a new Management Board and five functional groups, namely Finance, Operations, Customer Services, Corporate Services and Commercial. High-level competencies have been identified in the Organisational Organogram for each Group.
Certain organisational design (OD) principles guided the definition of the Company's structures. These reflect international and South African best practices. The key principles are:
- The structures were designed to ensure optimum and appropriate devolution of accountability to the most desired operational level;
- The activities of people at the various levels within the hierarchy, and in particular at executive levels, have been clearly defined to ensure effective delivery of value-adding activities at each level;
- The levels within the organisation were "flattened" to ensure minimum duplication of activities, and optimum empowerment of people at each level;
- The structures and roles within the hierarchy, starting at executive levels, will be capable of enhancing the commercial capabilities and capacity of the restructured Company;
- The structures have to create the capacity for City Power to be competitive at national and regional levels. To achieve this, it will need to take control of and be accountable for its entire (large) supply chain
7.8 Executive Management Team
The executive management team is ultimately going to be accountable for integrating and optimising the larger supply chain within which the organisation operates. This includes overseeing and integrating the value stream from external suppliers, the organisation, through to end-users of the organisation's services.
An ISB strategic committee consisting of the Vice Presidents and an external consultant will have the responsibility of developing IS policies and structures for the whole Company, whilst the execution of the function will resort under Customer Service. This will ensure that the IS system and policies serve all of the business lines equally; and
The organisation chart needs to be reviewed regularly and may change over time as the new roles and functions are bedded down.
7.9 Governance
The successes of City Power will to a large extend depend on the Company governance structure and the relation it maintains within this structure. A Contract Management Unit has been established to regulate the activities of the Company. The finalisation of agreements and the establishment of good working relationships with the Contract Management Unit will remain a priority.
The diagram below depicts the governance structures for the Company:
The Strategic Planning Manager in the Customer Service Group will perform City Power's Contract Management function, as required in the SDA.
7.10 Products and Services
City Power is contracted by the City of Johannesburg and licensed by the NER to provide the following products and services
