City of EkurhuleniCost of Electricity Supply Study
65th AMEU(SA) CONVENTION 2016
3-5 OCTOBER 2016
EMERALD RESORT AND CASINO
Presented by :
• Stephen Delport, Chief Engineer: Metering and Tariffs
• Dr Johan Delport, EEMS
Contents
1. Background
2. Application of the P5 philosophy
3. Results
4. Lessons learnt
OVERVIEW OF THE ENERGY DEPARTMENTELECTRICITY DISTRIBUTION IN THE CITY OF EKURHULENI
• Current replacement value of distribution network = R27 billion
• Value of bill paid to Eskom for July 2016 consumption > R1,35 billion.
• Number of Major Eskom Intake Points = 56
• CoE number of households 1 015 465
• Households with access to electricity – 82.2% (834 712)
City of Ekurhuleni CoS Background
• This is not an exercise to “balance the books”• It is to determine the true cost of electricity supply and losses• NERSA’s “Cost of supply framework” was not used, but NRS 058 was used• NRS 058 (Cost of Supply Methodology for the application in the Electrical Distribution
industry) prescribes how to regulate energy prices to different customer classes whilst being fair and equitable and at the same time yielding the expected budgetary income per annum
• Head of Department Mark Wilson has decided to conduct a cost of supply study in accordance with NRS058 as this methodology has not been incorporated in its tariff base yet.
• The first study was in 2014, with an update in 2016. The effect of the results are not yet incorporated into the existing electricity tariffs
Cost of Supply Methodology
Where Equals Description (c/kWh)
Total CoS Total Cost of Supply Total cost of supplying electricity
P1 Power All costs related to pay the supplier(s) costs for energy. Technical losses included
P2 Parts All costs related to the assets of the Electricity Department. Work with replacement value
P3 People All costs related to the people of the Electricity Department
P4 Pain Total cost of Non-technical losses
P5 Profit If expanded, the surplus can be included in the cost of supply study.
P1 = Power [1/4]
• Construct a Supply load profile of all supply points:– add load profiles per point of delivery
– calculate diversity per month
• Construct a load profile per tariff group– with AMR data
• add load profiles per customer in the tariff group
• calculate diversity per month per tariff group
– with “similar load profile”• use a load profile and scale it to the monthly statistics
• Calculate the technical losses according to voltage levels and add to tariff group
P1 = Power [2/4]
• Calculate – the difference between Supply and Tariff groups = Non-technical losses– each one’s contribution to the total electricity (power) cost.
• Remember– calculate the cost of each tariff group AND include the technical losses– the cost must be calculated using only the energy SOLD (less than energy sold and
technical losses)!!– this will give a c/kWh that is more than the c/kWh of all energy taken into account
• Calculate the c/kWh per tariff group and non-technical losses
P1 = Disaggregated Load Profile [3/4]
-
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
20
14
/07
/21
00
:30
20
14
/07
/21
04
:30
20
14
/07
/21
08
:30
20
14
/07
/21
12
:30
20
14
/07
/21
16
:30
20
14
/07
/21
20
:30
20
14
/07
/22
00
:30
20
14
/07
/22
04
:30
20
14
/07
/22
08
:30
20
14
/07
/22
12
:30
20
14
/07
/22
16
:30
20
14
/07
/22
20
:30
20
14
/07
/23
00
:30
20
14
/07
/23
04
:30
20
14
/07
/23
08
:30
20
14
/07
/23
12
:30
20
14
/07
/23
16
:30
20
14
/07
/23
20
:30
20
14
/07
/24
00
:30
20
14
/07
/24
04
:30
20
14
/07
/24
08
:30
20
14
/07
/24
12
:30
20
14
/07
/24
16
:30
20
14
/07
/24
20
:30
20
14
/07
/25
00
:30
20
14
/07
/25
04
:30
20
14
/07
/25
08
:30
20
14
/07
/25
12
:30
20
14
/07
/25
16
:30
20
14
/07
/25
20
:30
20
14
/07
/26
00
:30
20
14
/07
/26
04
:30
20
14
/07
/26
08
:30
20
14
/07
/26
12
:30
20
14
/07
/26
16
:30
20
14
/07
/26
20
:30
20
14
/07
/27
00
:30
20
14
/07
/27
04
:30
20
14
/07
/27
08
:30
20
14
/07
/27
12
:30
20
14
/07
/27
16
:30
20
14
/07
/27
20
:30
kW
h S
tac
ke
d p
er
Ta
riff
Gro
up
P1 = Losses [4/4]
-
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
-
50,000
100,000
150,000
200,000
250,000
20
14
/07
/21
00
:30
20
14
/07
/21
05
:00
20
14
/07
/21
09
:30
20
14
/07
/21
14
:00
20
14
/07
/21
18
:30
20
14
/07
/21
23
:00
20
14
/07
/22
03
:30
20
14
/07
/22
08
:00
20
14
/07
/22
12
:30
20
14
/07
/22
17
:00
20
14
/07
/22
21
:30
20
14
/07
/23
02
:00
20
14
/07
/23
06
:30
20
14
/07
/23
11
:00
20
14
/07
/23
15
:30
20
14
/07
/23
20
:00
20
14
/07
/24
00
:30
20
14
/07
/24
05
:00
20
14
/07
/24
09
:30
20
14
/07
/24
14
:00
20
14
/07
/24
18
:30
20
14
/07
/24
23
:00
20
14
/07
/25
03
:30
20
14
/07
/25
08
:00
20
14
/07
/25
12
:30
20
14
/07
/25
17
:00
20
14
/07
/25
21
:30
20
14
/07
/26
02
:00
20
14
/07
/26
06
:30
20
14
/07
/26
11
:00
20
14
/07
/26
15
:30
20
14
/07
/26
20
:00
20
14
/07
/27
00
:30
20
14
/07
/27
05
:00
20
14
/07
/27
09
:30
20
14
/07
/27
14
:00
20
14
/07
/27
18
:30
20
14
/07
/27
23
:00
kW
h E
sk
om
kW
h S
tac
ke
d p
er
Lo
ss
es
Technical Losses Non-technical losses Sum of P (kWh) Eskom Intakes (kWh)
P2 = Parts
• According to NRS058, it is better to work with replacement cost of assets
• Get the asset information according to different voltage levels
• Normally linked to tariff groups
• Calculate the assets according to the tariff groups– the tariff group with the highest voltage will carry only the cost of those assets
necessary to supply them
– the tariff group with the lowest voltage will carry all the assets necessary to supply them
• Calculate the average cost in c/kWh per tariff group
P3 = People
• The ideal situation is if records are kept of all maintenance, linked to a tariff group
• Normally, the higher the voltage the less maintenance
• Distribute the cost according to the voltage level
• Calculate the average cost in c/kWh per tariff group
Total Cost of Supply - Extract
0
20
40
60
80
100
120
140
160
180
Ekur
hule
ni 1
3/14
Tarif
f E <
=11k
V
Ekur
hule
ni 1
4/15
Res
elle
rs <=
400
V
Ekur
hule
ni 1
4/15
Res
elle
rs >4
00V
Ekur
hule
ni 1
4/15
Tarif
f A B
us
Ekur
hule
ni 1
4/15
Tarif
f B B
us 1
00A
3P
Ekur
hule
ni 1
4/15
Tarif
f B B
us 1
00A
3P N
o …
Ekur
hule
ni 1
4/15
Tarif
f B B
us 1
25A
3P N
OF
Ekur
hule
ni 1
4/15
Tarif
f B B
us 1
50A
3P
Ekur
hule
ni 1
4/15
Tarif
f B B
us 1
50A
3P N
OF
Ekur
hule
ni 1
4/15
Tarif
f B B
us 1
60A
3P N
o …
Ekur
hule
ni 1
4/15
Tarif
f B B
us 2
00A
3P N
o …
Ekur
hule
ni 1
4/15
Tarif
f B B
us 4
0A 3
P
Ekur
hule
ni 1
4/15
Tarif
f B B
us 5
0A 3
P
Ekur
hule
ni 1
4/15
Tarif
f B B
us 6
0A 3
P
Ekur
hule
ni 1
4/15
Tarif
f B B
us 6
0A 3
P No
Onl
ine …
Ekur
hule
ni 1
4/15
Tar
iff B
Bus
70A
3P
Ekur
hule
ni 1
4/15
Tar
iff B
Bus
80A
3P
Ekur
hule
ni 1
4/15
Tarif
f B B
us 9
0A 3
P NO
F
Ekur
hule
ni 1
4/15
Tarif
f B R
es
Ekur
hule
ni 1
4/15
Tarif
f B R
es N
OF
Ekur
hule
ni 1
4/15
Tarif
f C <
=11k
V
Ekur
hule
ni 1
4/15
Tarif
f C <
=11k
V No
NAC
Ekur
hule
ni 1
4/15
Tarif
f C 4
00V
Ekur
hule
ni 1
4/15
Tarif
f C 4
00V
No
NAC
Ekur
hule
ni 1
4/15
Tarif
f C 4
00V
(Sub
stat
ion …
Ekur
hule
ni 1
4/15
Tarif
f C O
ff-Pe
ak 1
1kV
Ekur
hule
ni 1
4/15
Tarif
f C O
ff-Pe
ak 4
00V
Ekur
hule
ni 1
4/15
Tarif
f D <
=11k
V
Ekur
hule
ni 1
4/15
Tarif
f D >
11k
V
Ekur
hule
ni 1
4/15
Tarif
f D 4
00V
Ekur
hule
ni 1
4/15
Tarif
f D N
CP
Ekur
hule
ni 1
4/15
Tarif
f E <
=11k
V
Ekur
hule
ni 1
4/15
Tarif
f E >
11k
V
Ekur
hule
ni 1
4/15
Tarif
f E 4
00V
Ekur
hule
ni 1
4/15
Tarif
f E 4
00V
(Sub
stat
ion …
Ekur
hule
ni 1
4/15
Tarif
f E 4
00V
No N
AC
Ergo
Conv
Res
iden
tial
Conv
Com
mer
cial
ALL C
CC's
Stre
et &
Mas
ts Li
ghtin
g & Tr
aff L
Dept
emen
tal C
ivic C
entr
e etc
.
All C
CC's
Prep
aid
+FBE
c/kW
h
Power c/kWh Parts c/kWh People c/kWh PAIN (Non-technical losses) c/kWh Profit (Surplus) c/kWh
P4 = PAIN
• Non-technical losses are not only theft!!!
• Also in the financial department
• The ideal situation is if check meters can report where the most non-technical losses are
• Calculate the total cost of non-technical losses (done under P1) and distribute it as a c/kWh to each tariff group.
P5 = Profit (surplus)
• According to the philosophy of the Municipality, the profit (surplus) can be distributed to the tariff groups as a c/kWh
CoS tariff results with Surplus (average for year)
CoS tariff results with Surplus(monthly)
CoS tariff results with Surplus (average for year)
CoS tariff results with Surplus (average for year)
Total Cost of Supply – Extract of various tariffs
Tariff Group Name Pow er c/kWh
Parts c/kWh
People c/kWh
PAIN (Non-
technical losses) c/kWh
Profit
(Surplus) c/kWh
Total c/kWh,
excluding surplus
Total c/kWh,
including surplus
Income in c/kWh
Tariff A Business 78.6853 21.6221 41.4915 7.9690 9.5788 149.7679 159.3467 159.2372
Tariff B Res 114.3747 21.6221 41.4915 7.9690 9.5788 185.4573 195.0361 141.0023
Tariff C <=11kV 74.2370 19.6406 37.5398 7.9690 9.5788 139.3864 148.9652 121.6891
Tariff C <=11kV No NAC
82.0122 19.6406 37.5398 7.9690 9.5788 147.1616 156.7404 118.124
Tariff C 400V 79.4773 21.6221 41.4915 7.9690 9.5788 150.5599 160.1387 125.3356
Tariff C 400V (Substation Supply)
75.8565 21.6221 41.4915 7.9690 9.5788 146.9391 156.5179 125.91
Tariff C Off-Peak
11kV 78.2243 19.6406 37.5398 7.9690 9.5788 143.3737 152.9525 148.5502
Tariff C Off-Peak 400V
87.8705 21.6221 41.4915 7.9690 9.5788 158.9531 168.5319 146.9479
Tariff D <=11kV 68.4470 19.6406 37.5398 7.9690 9.5788 133.5964 143.1752 95.7715
Tariff D > 11kV 64.1788 4.2077 6.1036 7.9690 9.5788 82.4591 92.0379 86.1888
Tariff D 400V (Substation Supply)
101.3359 21.6221 41.4915 7.9690 9.5788 172.4185 181.9973 141.0008
Tariff E <=11kV 72.3112 19.6406 37.5398 7.9690 9.5788 137.4606 147.0394 111.9694
Tariff E > 11kV 73.9145 4.2077 6.1036 7.9690 9.5788 92.1948 101.7736 114.2018
Tariff E 400V 78.7394 21.6221 41.4915 7.9690 9.5788 149.8220 159.4008 128.6043
Tariff E 400V (Substation supply)
75.7176 21.6221 41.4915 7.9690 9.5788 146.8002 156.3790 122.727
Tariff E 400V No
NAC 77.0634 21.6221 41.4915 7.9690 9.5788 148.1460 157.7248 176.2398
Res Resellers <=400V
79.2566 21.6221 41.4915 7.9690 9.5788 150.3392 159.9180 125.0775
Res Resellers >400V
76.2772 19.6406 37.5398 7.9690 9.5788 141.4266 151.0054 125.2634
Conv Residential 76.4706 21.6221 41.4915 7.9690 9.5788 147.5532 157.1320 164.4181
Conv Commercial 79.4517 21.6221 41.4915 7.9690 9.5788 150.5343 160.1131 163.3437
ALL COE Street and Masts and Traff ic Lighting
61.5041 21.6221 41.4915 7.9690 9.5788 132.5867 142.1655 130.9752
Departmental Civic
Centre etc. 79.2729 21.6221 41.4915 7.9690 9.5788 150.3555 159.9343 130.9752
All COE's Prepaid
and FBE 79.1639 21.6221 41.4915 7.9690 9.5788 150.2465 159.8253 90.7169
Non-technical losses
89.4247 - - - - 89.4247 89.4247 0
Income vs Cost per tariff sorted from worst deficit to highest surplus
• Total Cost of Supply for all tariffs calculated
-100
-50
0
50
100
150
200
No
n-t
ec
hn
ica
l lo
sse
s
All
CC
C's
Pre
pa
id +
FBE
De
pte
me
nta
l C
ivic
Ce
ntr
e e
tc.
Ek
urh
ule
ni 1
4/1
5 T
ari
ff D
<=
11
kV
Ek
urh
ule
ni 1
4/1
5 T
ari
ff B
Re
s
Ek
urh
ule
ni 1
4/1
5 R
ese
llers
<=
40
0V
Ek
urh
ule
ni 1
4/1
5 T
ari
ff B
Re
s N
OF
Ek
urh
ule
ni 1
4/1
5 T
ari
ff E
40
0V
No
NA
C
Erg
o
Ek
urh
ule
ni 1
4/1
5 T
ari
ff E
40
0V
Ek
urh
ule
ni 1
4/1
5 T
ari
ff B
Bu
s 6
0A
3P
No
On
lin
e …
Co
nv
Re
sid
en
tia
l
AL
L C
CC
's S
tre
et
& M
ast
s L
igh
tin
g &
Tra
ff L
Ek
urh
ule
ni 1
4/1
5 R
ese
llers
>4
00
V
Ek
urh
ule
ni 1
4/1
5 T
ari
ff C
<=
11
kV
No
NA
C
Ek
urh
ule
ni 1
3/1
4 T
ari
ff E
<=
11
kV
Ek
urh
ule
ni 1
4/1
5 T
ari
ff E
40
0V
(S
ub
sta
tio
n …
Ek
urh
ule
ni 1
4/1
5 T
ari
ff B
Bu
s 9
0A
3P
NO
F
Ek
urh
ule
ni 1
4/1
5 T
ari
ff D
NC
P
Co
nv
Co
mm
erc
ial
Ek
urh
ule
ni 1
4/1
5 T
ari
ff C
40
0V
(S
ub
sta
tio
n …
Ek
urh
ule
ni 1
4/1
5 T
ari
ff E
<=
11
kV
Ek
urh
ule
ni 1
4/1
5 T
ari
ff D
40
0V
Ek
urh
ule
ni 1
4/1
5 T
ari
ff C
<=
11
kV
Ek
urh
ule
ni 1
4/1
5 T
ari
ff B
Bu
s 7
0A
3P
Ek
urh
ule
ni 1
4/1
5 T
ari
ff B
Bu
s 1
60
A 3
P N
o …
Ek
urh
ule
ni 1
4/1
5 T
ari
ff C
40
0V
Ek
urh
ule
ni 1
4/1
5 T
ari
ff B
Bu
s 1
50
A 3
P
Ek
urh
ule
ni 1
4/1
5 T
ari
ff B
Bu
s 1
00
A 3
P N
o …
Ek
urh
ule
ni 1
4/1
5 T
ari
ff D
> 1
1k
V
Ek
urh
ule
ni 1
4/1
5 T
ari
ff B
Bu
s 1
25
A 3
P N
OF
Ek
urh
ule
ni 1
4/1
5 T
ari
ff B
Bu
s 1
50
A 3
P N
OF
Ek
urh
ule
ni 1
4/1
5 T
ari
ff C
Off
-Pe
ak
40
0V
Ek
urh
ule
ni 1
4/1
5 T
ari
ff B
Bu
s 6
0A
3P
Ek
urh
ule
ni 1
4/1
5 T
ari
ff B
Bu
s 4
0A
3P
Ek
urh
ule
ni 1
4/1
5 T
ari
ff B
Bu
s 8
0A
3P
Ek
urh
ule
ni 1
4/1
5 T
ari
ff E
> 1
1k
V
Ek
urh
ule
ni 1
4/1
5 T
ari
ff B
Bu
s 1
00
A 3
P
Ek
urh
ule
ni 1
4/1
5 T
ari
ff C
Off
-Pe
ak
11
kV
Ek
urh
ule
ni 1
4/1
5 T
ari
ff A
Bu
s
Ek
urh
ule
ni 1
4/1
5 T
ari
ff B
Bu
s 2
00
A 3
P N
o …
Ek
urh
ule
ni 1
4/1
5 T
ari
ff B
Bu
s 5
0A
3P
Ek
urh
ule
ni 1
4/1
5 T
ari
ff C
40
0V
No
NA
C
c/k
Wh
Power c/kWh Parts c/kWh People c/kWh PAIN (Non-technical losses) c/kWh Difference in c/kWh cost and income
CoE Resellers Tariff• Lessons learnt with regard to Resellers of Electricity
• With the information currently available, it is not possible to recommend what “discount” or “more favourable tariff” a Reseller is entitled to.
• It is proposed that a study be completed to quantify the actual cost per customer per tariff group to the Municipality.
• That will include things like meter reading (manual or AMR), bills, stamps, envelopes, chasing of payments, non-technical losses, etc.
• The outcomes of this study will help to quantify the benefits that could be passed on to the reseller segments, if any.
Typical Domestic Resellers Profile
Typical Electrification area ProfileIBT Tariff
Do an Energy Balance “kWh”
• Purchases = Sales + Technical Losses + Non-Technical Losses + Admin Losses!
Conclusion
• It is recommended that all municipalities execute a detailed CoS study. The good data records of the CoE assisted in making this study somewhat easier as far as that component goes, but the sheer size of a City made the study fairly complex.
• It is therefor recommended that:-
• A Municipality rather APPOINT an electricity tariff specialist to do a cost-of-supply study as guided by NRS 058.
We Thank You !
