Mandate

Accountable for the network and customer services business in Eskom. This entails the planning, operations and maintenance of the transmission and distribution network, the management of the customer base, long-term electricity capacity planning and the revenue stream.

	Highlights			Challenges
	Provided an incident-free electricity supply for the 2010 FIFA World Cup™ Increased the uptake of solar water heater rebates offered by Eskom Launched Operation Khanyisa as part of the energy loss and theft management programme Exceeded the target for schools connections Lost significantly less energy than targeted: the 2.63RA system minutes lost against a target of 3.4 and a three-year historical average of 3.8 is exceptional There were no major interruptionsRA (this performance level was last achieved in 2004/05) Made demand-side management savings of 354.1RA MW against an Eskom target of 301MW			Very high levels of theft of equipment and electricity, which are affecting plant performance and increasing cost The deaths by accident of three Distribution employees and seven contract workers, as well as three contract workers from Transmission R123 million overdue municipal debt payments at year-end Non-payment by large and residential customers, and some lengthy contractual payment disputes Employee security is becoming a concern Not meeting the target of 158 430 overall electrification connections this year (149 914 made) Collisions and electrocutions of birds onm distribution power lines Acquisition of land and rights for electricity infrastructure

	Future priorities
	Facilitate the participation of independent power producers at local and regional levels Facilitate vibrant energy trade in sub-Saharan Africa Intensify demand management and the regional inflow of green power Manage internal electricity usage across Eskom Integrate energy and power delivery planning into Eskom’s strategic planning Acquire and retain the right skills Improve asset management Make step changes in safety and security Institute integrated demand management across all Eskom divisions			Support government initiatives such as the universal access plan and solar water heating Contribute to socioeconomic development by: Reducing public safety incidents through awareness Achieving demonstrated climate change deliverables Providing viable electricity options to informal settlements Contributing to broad-based black economic empowerment and small business development

R millions

Financial results				Transmission and   Systems Operations   and Planning		Distribution and   Integrated Demand   Management		Total Customer   Network Business
	2011
		Total revenue		42 390		55 137		97 527
		Profit for the year		146		1 875		2 021
		Total assets		40 863		51 535		92 398
		Capital expenditure (including capitalised interest)		6 485		8 474		14 959
	2010
		Profit for the year		2 080		290		2 370
		Total assets		28 438		43 995		72 433
		Capital expenditure (including capitalised interest)		7 143		7 079		14 222

Debtors days			Measure		2011		2010		2009
	Average debtor days: Distribution		Days		22.2		22.0		20.8
	Average debtor days: Transmission		Days		16.0		16.1		18.1

Overview
Customer Network Business (CNB), which has been functioning for three years, comprises Distribution, Transmission, System Operations and Planning and Integrated Demand Management with the mandate to ensure that power system risk can be managed in an integrated manner. The focus of the division is to align resources, delivery processes and operational and planning strategies across the company in a consistent and coherent manner. This approach resulted in working across divisional boundaries to ensure that the challenges of managing aged networks, a tight power system, and providing customer services were managed within a coherent risk management framework, building resilience whenever a learning opportunity arose.

Customer Network Business plays a key role in delivering on the shareholder expectations of ensuring a reliable supply of electricity to all South Africans, ensuring adequate future electricity for South Africa, supporting the developmental objectives of South Africa and significantly contributing to the sustainability of Eskom.

Key performance measures in this regard include the licence to operate, financial sustainability, regaining confidence, keeping the lights on, talent management, customer centricity, Eskom strategy and included an incident free electricity supply for the 2010 FIFA World Cup™.

The maintenance and refurbishment of existing plant and network expansion, through new infrastructure, ensures optimal electricity delivery to Eskom’s approximately 4.6 million customers.

Transmission and Distribution network infrastructure as at 31 March 2011

• 395 419km of power lines (2010: 390 338km)
• 351 297 transformers (2010: 344 369)
• 232 058MVA transformer capacity (2010: 223 398MVA)

The divisional structure was enhanced during the year to accommodate the integrated demand management project that was initiated in 2009. This approach completed the strategy to manage the tight capacity situation by adding an additional focus area in the ever challenging supply/demand balance management process. Integrated demand management provides customer solutions to reduce the demand for electricity through increased energy efficiency.

Technical system performance
Transmission, Distribution and System Operations & Planning have worked tirelessly to maintain top quartile performance in areas where this has already been achieved. They have also worked very hard on those areas aspiring for appropriate benchmark performance. An aged network such as Eskom’s makes this aspiration a difficult challenge.

South Africa’s electricity system continues to be under pressure. There is a low reserve margin, which results in shorter windows of opportunity to perform essential maintenance on power stations, as well as less opportunity to schedule the major refurbishments required by the older power stations (refer to here in Generation). However, the system has performed well over the past year, and there has been no load shedding since January 2008. The supply/demand margin will remain slim for the next 5 – 6 years, in particular the next two years. Customer Network Business manages this dynamic and complex system in real time, continuously analysing power system risks as they appear in key subsystems and interact with each other, mitigating the effects.

Thirty Transmission interruptions were recorded in 2011 (2010: 31) against a target of 35. There were no major incidents^RA (more severe interruptions) (2010: 1^RA incident). This is a substantial improvement, although the risk on the network of such incidents has not fundamentally been reduced.

The Transmission total system minutes lost (for incidents of less than one system minute) has also performed above expectation – 2.63^RA against a target of 3.40 (2010: 4.09^RA against a target of 3.40). This was the result of continued intense focus on asset management and operations within the Transmission division.