eJournal

The 63rd AMEU Convention registration opens soon

[Your Name Here] — Wed, 02 May 2012 09:18:15 +0000

The AMEU Executive Council announces that the 63rd AMEU Convention, hosted by the Ekurhuleni Municipality will be held at the Emperors Palace from 15 – 17 October 2012.

Registration to open soon, so watch this space!!!

Department of Labour dumps the Electrical Contracting Board - update

[Your Name Here] — Wed, 02 May 2012 09:08:01 +0000

A month can be a long time in the electricity industry in South Africa!

The March 2012 edition of this e-Bulletin carried a report by Chris Yelland that `The Chief Inspector of the Department of Labour (DoL) has given notice that, with effect from 1 June 2012, it will assume responsibility directly for the statutory registration of electrical contractors, a function that had previously been delegated by the Chief Inspector to a somewhat obscure industry body known as the Electrical Contracting Board of South Africa (ECB).’

Then on 16 April 2012 the ECB issued a press release advising that the Department of Labour (DoL) has extended its function of the registration of electrical contractors until 31 August 2012. `or to such later date as may be determined by the Chief Inspector’.

Members of the AMEU were provided with a copy of the press release in a circular distributed on 17 April 2012 which states that `The Chief inspector again confirmed his acceptance of the ECB’s electronic and hard copy COC’s and Test reports, as well as the appointment by the ECB of additional vendors/facilitators.’ The ECB will therefore continue to provide Certificate of Compliance (CoC) forms, both hard copies and the new eCoC, bearing a unique traceable number which is captured on the ECB database. Electrical contractors were also advised that they must continue to register with the ECB until 31 August 2012 or further notice.

The ECB press release also highlights that amendment 8 of SANS 10142-1 was published on 30 March 2012 containing a new Test Report which will be phased in from 1 April 2012. The existing Test Report will be valid until 30 March 2013 to allow contractors `the opportunity to run down their old stocks’.

A copy of the ECB press release is available here.

NERSA: Regulatory rules on network charges for third-party transportation of energy

[Your Name Here] — Wed, 02 May 2012 08:56:28 +0000

NERSA has recently published on its website, regulatory rules for use-of-system (UOS) charges to facilitate transmission and distribution system access to ` Sellers of the new generation capacity’.

The `Electricity Regulations on New Generation Capacity’ dated 04 May 2011 (Government Gazette No. 34262) provide the framework for the procurement of new generation capacity but are only applicable to such procurement by organs of state and not for wheeling arrangements. The NERSA rules are therefore intended to provide Independent Power Producers (IPPs) and renewable energy generators with guidelines on the costs involved in network access and transportation of electricity.

Use-of-system (UOS) charges are tariff structures and rates that recover the costs associated with making capacity available on an electricity network. These charges are the unbundled regulated tariffs, charged by the Network Services Provider (NSP) for making transmission or distribution capacity available to the generators and other distributors. The application of UOS tariffs allows for the recovery of the fixed and Operation and Maintenance (O&M) costs, recovery of transmission losses as well as costs for ancillary services procured by the System Operator. These UOS charges do not recover connection charges, which should be charged separately.

Important points to note arising from these rules are:

For distribution generator connections, all upstream costs are included in the rate base and not charged directly to the customer [sec 11.8];
Wheeling will be allowed for generators connected at > 11 kV and for any load customer [sec 12];
A 300 MW embedded generator capacity limit for wheeling is applicable until a balancing mechanism is in place [sec 12.10];
Compensation to generators for poor network performance (below the 98% and 95% availability limits for Transmission and Distribution Systems) [sec 12.8];
Uneconomic bypass of distribution services shall be addressed on a case-by-case basis to be approved by NERSA [sec 13.1];
These regulatory rules are applicable to the current Electricity Supply Industry (ESI) structure and will be aligned with the Independent System Market Operator (ISMO) once it is approved as Government policy [sec 15.1]; and
Generator UOS charges will be indexed to CPI and load UOS charges will be indexed to the Transmission portion of the price increase [secs 6.11 and 6.12] ( for municipalities this means that “wheeling” charges will not be aligned to the price increase but linked to Eskom Transmission increases).

The formulation of the rules is seen as a progressive move forward by NERSA in developing a national standard for the implementation of use-of-system charges, particularly to encourage the establishment of IPPs. However, the implications of the rules will need to be understood by each affected distributor and further engagement with NERSA on the possible impact and implementation challenges may be necessary.

Comments on the rules as well as any suggestions to address implementation challenges may be addressed to Peter Fowles at pf15@mweb.co.za or 072 865 0558.

Copies of the NERSA reasons for decision (RFD) document, the regulatory rules and the Electricity Regulations on New Generation Capacity dated 04 May 2011 (Government Gazette No. 34262) are available here.

Small Scale Embedded Generation Workshop: 15/16 March 2012

[Your Name Here] — Wed, 02 May 2012 08:52:22 +0000

In response to `an urgent call by a number of the city metros’, Sustainable Energy Africa (SEA), in partnership with SALGA, convened a Renewable Energy Knowledge Sharing Workshop focused on small scale embedded generation (decentralized grid-tied electricity generation) on 15 and 16 March 2012. The workshop was also in response to the NERSA document (RFD) on “Standard Conditions for Small Scale (less than 100kW) Embedded Generation within Municipal Boundaries” that was highlighted in an article in the January 2012 edition of this Bulletin.

In announcing the workshop, the City Energy Support Unit of SEA stated that municipalities have long understood the opportunities presented by renewable energy (RE) project implementation and have implemented a number and range of renewable energy projects. The aim of the workshop was thus to bring the cities together to share experience and discuss the opportunities and constraints of embedded generation through:

municipal renewable energy project implementation experience exchange; and
developing a standard approach and methodology for small scale (less than 100KW) embedded generation.

Due to the fact that Eskom and the AMEU are encountering similar requests for the acceptance of embedded generation and much work has already been undertaken on possible solutions and enabling policies, Eskom representatives were also invited to participate in the workshop and discussions.

Copies of the workshop agenda and the Action Notes that emerged from the discussions are available here. Interested readers should however note that all information relating to the Workshop is available on Sustainable Energy Africa’s City Energy Support Unit website: http://www.cityenergy.org.za/resources/workshops including copies of the presentations and associated documents.

One of the tasks agreed at the workshop was drafting municipal concerns relating to the contents of the NERSA `Standard Conditions for Small scale (<100kVA) Embedded Generation within Municipal Boundaries’. This process has commenced with the initial comment being provided by the workshop participants, including Eskom. This draft will then be submitted to the AMEU membership before being discussed at a further workshop by representatives of the AMEU, Eskom, SALGA, SEA and NERSA with a view to arriving at an alternate to the current impractical proposal. This will then be submitted to NERSA as it is apparently wishing to `...prepare a position paper for comment because from our point of view there are a number of very concerning (issues) to us.’ The RFD document currently on the NERSA website is thus not the final say in the matter of regulating small scale embedded generation.

Members will be informed of any new developments. Queries and comment may be addressed to Peter Fowles at pf15@mweb.co.za or 072 865 0558.

Smart Grids: Establishment of a South Africa Smart Grid Initiative (SASGI)

[Your Name Here] — Wed, 02 May 2012 08:46:40 +0000

On 31 March 2012, Engineering News Online published an article reporting that `Eskom has started to deploy a hybrid smart grid model that supports its legacy time-division multiplexing management system, while gradually introducing an Internet Protocol (IP) packet communication system, which will enable smart demand-side management, automatic correction and the connection of variable, renewable-energy generation capacity’. It also quotes Eskom acting GM for research, technology and development Barry MacColl as noting that `….the business case still needs to be demonstrated’ and that “We are focusing too much on the technology and not the reasons for implementing the technology. We need to be able to do demand-side management [and] revenue management, and a smart grid must improve the safety of the system, as well as have a common language to enable all devices to talk to one another,”

While this is quite a mouthful, it is clear now that the ever-increasing demand for electricity, load management and demand response are some of the catalysts for introducing smart grids in South Africa. To this end, the South African Energy Development Institute (SANEDI) convened a Smart Grid Workshop on 12 April 2012 attended by a number of South African stakeholders. A number of the workshop delegates that had participated in a US Trade and Development Agency (USTDA) site visit tour between 20 February and 2 March 2012, reported on the lessons that had been learned and agreed with the SANEDI objective to establish a representative, efficient and effective electricity industry smart grid institution which will be known as the South African Smart Grid Initiative (SASGI). SASGI’s purpose will be to:

Co-ordinate and integrate the activities within the electricity supply industry pertaining to smart grids;
Evaluate options pertaining to grid intelligence;
Consider pilot projects and evaluate the results from pilot projects;
Establish work groups and co-opt subject matter experts where required;
Facilitate resource allocation;
Discuss and make recommendations to enhance grid intelligence and smart grids

The AMEU and Eskom are among numerous interested parties and stakeholders included in the proposed members of this initiative. An introduction document setting out the proposed engagement structure and terms of reference has been circulated to workshop participants for comment.

Copies of the Engineering News Online article, minutes of the Smart Grid Workshop and the document setting out the proposed Smart Grid stakeholder engagement approach are available here.

Queries and comment may be addressed to Peter Fowles at pf15@mweb.co.za or 072 865 0558.

Electricity Supply Situation

[Your Name Here] — Wed, 02 May 2012 08:34:19 +0000

As reported in the March edition of this Bulletin, the daily `Power system status report’ sent by Eskom to a number of industry participants continues to serve as a stark reminder of the delicate supply/demand balance being managed by the generation maintenance team and the National System Control. Several of these reports have indicated that the expected evening peak demand exceeds the available generation capacity by 1000 odd MW (reference the evening report for 24 April 2012). This situation of course does not happen as Eskom is forced into utilizing its DMP contracts, peaking plant and other interruptible supplies at great cost to meet the demand.

Readers are reminded that Eskom `Generation Medium Term Adequacy Reports’ can be accessed on the Eskom website at http://www.eskom.co.za/c/59/supply-status/ and also via a link on the AMEU home page. Its regular `System Status Bulletins’ are also available to interested persons at http://www.eskom.co.za/c/article/827/system-status-bulletins/.

An ESI Africa `Top Headlines’ article of 12 April 2012 referred to one of the System Status Bulletin No.26 (9 April 2012) in reporting that `Eskom has continued with high levels of planned maintenance’ and that ` As of the beginning of the week starting the 9th of April 2012, its planned maintenance stood at 6,573 MW of generation capacity, withdrawn for that purpose.’

Engineering News Online meanwhile has provided updates, published on 30 March 2012, on the `second renewables bid’ and the RFI from potential developers of cogeneration facilities, as well as those coal-fired power stations, natural gas facilities and imported hydropower opportunities that could be introduced into the country’s stressed power system before March 2019.

The first reports that a total of 79 tenders, representing 3 233 MW of potential power generation capacity, had been received by government during the second bidding round under its renewable energy independent power producer (IPP) purchase programme, which closed on 5 March 2012. No technology breakdown has yet been made but the offers were well above the 1 275 MW allocated for the March window and the preferred bidders for this second round would be named on 14 May.

The second article reports that government has received an extremely strong response to a recently released request for information (RFI) for the development, or importation, of conventional power generation capacity. Department of Energy (DoE) director-general Nelisiwe Magubane is reported to have confirmed that `…..potential developers of cogeneration facilities, as well as coal-fired power stations, natural gas facilities and imported hydropower projects (have) indicated that 60 300 MW of capacity could be introduced into the country’s stressed power system before March 2019.’

Evaluation work was still required before government could make a decision on whether an independent power producer (IPP) procurement programme would be worth pursuing but `… the scale of the response was “exciting” and could result in the issuance of a request for proposals (RFP) by year-end.’

Copies of the ESI Africa and Engineering News Online articles and Eskom System Status Bulletin No.26 are available here.

Electricity consumption statistics: February 2012

[Your Name Here] — Wed, 02 May 2012 08:31:40 +0000

Statistics South Africa (Stats SA) have reported that South Africa’s electricity consumption grew by 1.8% year-on-year in February, while production increased by 0.5%.

This is according to an Engineering News Online article on 6 April 2012 that also reported that `The country increased its power consumption to 18 779 GWh in February, from 18 455 GWh a year earlier. In January, electricity consumption was 19 676 GWh’.

A copy of the article is available here.

Important meeting dates for 2012

[Your Name Here] — Wed, 02 May 2012 08:20:03 +0000

The 2012 meeting schedule detailed below has been approved by the AMEU Executive Council. Meeting dates and venues are however subject to revision and we will attempt to ensure that any changes are included in this monthly e-Bulletin and on the AMEU website. Recent changes are shown in red.

May 2012	Branch meetings Bushveld – 4 May 2012 [Polokwane] Good Hope – 18 May 2012 [Wellington] Highveld – 25 May 2012 Affiliates Steering - 31 May 2012
June 2012	Affiliates Main – 7 June 2012 Branch meetings KZN – 21/22 June 2012 [Jozini Tiger Lodge, Jozini]
July 2012	AMEU Committee meetings – 17/18 July 2012 Branch meetings Eastern Cape - 19/20 July 2012 Affiliates Steering - 26 July 2012
August 2012	Affiliates Main – 2 August 2012 Branch meetings Bushveld – 3 August 2012 Highveld – 10 August 2012 Good Hope – 17 August 2012 [Koeberg] FS & NC – 24 August 2012 [Kimberley]
September 2012	Nil
October 2012	AMEU Convention – 15 to 17 October 2012 [Emperors Palace, Kempton Park, Ekurhuleni] Executive Council – 18 October 2012 Affiliates Steering - 25 October 2012
November 2012	Affiliates Main – 1 November 2012 AMEU Committee meetings – 7/8 November 2012 [George] Branch meetings Bushveld – 2 November 2012 Good Hope – 8/9 November 2012 [George] FS & NC – 16 November 2012 [Ficksburg] KZN – 22/23 November 2012 [Didima]

The 63rd AMEU Convention at Emperors Palace

[Your Name Here] — Tue, 27 Mar 2012 13:24:01 +0000

The AMEU Executive Council announces that the 63rd AMEU Convention, hosted by the Ekurhuleni Municipality will be held at the Emperors Palace from 15 – 17 October 2012.

The Council invites all parties who may be interested in presenting papers at the Convention to submit a synopsis, of no more than 400 words, to the AMEU Secretariat by 30 March 2012. If your proposal is selected for presentation at the Convention, you are required to provide a manuscript for publication. This should comprise of no more than 10 typed pages and will be due by 27 August 2012.

Click here for more information.
Click here for the Call for papers form.

Convention Theme: Solutions for a Smart Industry

The following sub-themes and paper concepts are suggested:

Smart grids
Renewable energy
International trends
System performance
Energy shortages and load shedding
Independent power producers and embedded generation
Demand Side Management & Energy Efficiency
New Technology
Safety
Tariffs

Speakers will be allocated 20 minutes to present their papers followed by 10 minutes of questions and discussion time per paper. Please note that a written version of your final paper in MSWord format is needed for inclusion into the AMEU Proceedings Book and Convention delegate pack. A PowerPoint presentation will not be accepted in lieu of a paper.

Practical case studies, research, innovations, management practices and report backs to the industry, are all welcome.

Summaries of proposed papers should be sent to Melindi@vdw.co.za by no later than 30 March 2012.

Please click here for the paper proposal form.

AMEU Reaction to revised tariff increase – Message from the AMEU President, Michael Rhode

[Your Name Here] — Tue, 27 Mar 2012 13:16:38 +0000

The AMEU welcomes the announcement by NERSA on 9 March 2012 of a 9.9% reduction in the anticipated Eskom average price increase of 25.9% to a level of 16% with effect from 1 April 2012. This has translated to an average increase in the bulk electricity prices to municipalities of 13.5 % with effect from 1 July 2012.

Considering the misalignment of the Eskom and municipal financial years, this translates into a nett reduction of 13.56% (inclusive of the environmental levy) in the expected municipal bulk tariff price increase of 27.06%. This lower percentage increase will bring much relief to electricity users who are continually facing increased pressure on their purses, thanks to endless increases in their basic costs.

It is however disturbing to note that that the implementation of the Inclining Block Tariffs (IBT) is still being forced upon Municipalities despite our many calls for proper consultation pending implementation. It is well known that IBT is a difficult concept for our communities to understand and many municipalities have their hands full dealing with irate members of the community as well as coping with the negative financial impact on their budgets. The AMEU, together with SALGA and Eskom, has submitted a comprehensive position paper on the problems with IBT but NERSA has still not yet completed a review of this tariff as envisaged in its consultation paper published on 14 October 2011.

The AMEU would like to encourage its members to get their tariff applications in as soon as possible for it to be tabled with their municipalities’ budget by the end of May 2012. We also encourage members to use the “AMEU Annual Tariff Survey Model”, available on our website, to get an idea as to how its tariffs compare with those of other municipalities.

Energy Indaba: Keynote address by the Minister of Energy

[Your Name Here] — Tue, 27 Mar 2012 13:14:03 +0000

Readers may be interested in reading the keynote address by the Minister of Energy, Ms Dipuo Peters delivered to the Energy Indaba on 21 February 2012.

Ms Peters told the delegates that `After COP 17, it is useful to reflect on the questions we identified as being critical for South Africa’s energy future: improved Energy Efficiency, the diversification of our energy mix towards a low carbon economy, finalization of the Nuclear Power option, Carbon Capture and Storage, and universal access are some of the initiatives that come to mind.’ She addressed these as well as a number of other issues in her address, a copy of which is available here.

National Electrification Indaba

[Your Name Here] — Tue, 27 Mar 2012 13:04:35 +0000

The Department of Energy (DoE) convened a National Electrification Indaba at the Elangeni Hotel, Durban, from 15 to 16 March 2012. The objective of the Indaba was to have open discussions and debate, with all relevant stakeholders, on electrification related issues that inhibit the DoE from meeting its set objective of universal access to electricity. The Integrated National Electrification Programme (INEP) Business Planning Unit hoped that the process would indentify innovative and sustainable ways to speed up universal access to electricity as the level of funding is not increasing substantially and connection rates are declining. The Indaba is seen as the `beginning of a process’ to create a strategy to improve electrification delivery.

Six AMEU representatives as well as a number of other municipal representatives took part in this well attended event. Delegates were welcomed by the Deputy Mayor of eThekwini Metro and the Deputy Minister of Energy, Barbara Thompson, who advised that 82% of all formal households in South Africa have access to electricity (which equates to a 75% access level) but the target of 92% access by 2014/15 has several serious challenges:

Increasing the number of electrification connections achieved each year to reach the target;
The escalating costs per connection; and
Improving the delivery capacity, especially by municipalities.

The Minister of Rural Development and Land Reform, Mr G Nkwinti, highlighted the role that electricity plays in closing the social divide while the DoE DG, Ms Nelisiwe Magubane, reported that the current backlog in electrification was 3.4 million households (2.2 m formal and 1.2m informal households).

Mr P Theuret (EDF) and Ms P Bardouille (IFC) then provided an international perspective on electrification. This was followed by a panel discussion on `Experiences and lessons learned’ that included a number of very interesting short presentations by Dr Wolsey Barnard (DoE), Mthobeli Kolisa (SALGA), Ayanda Noah (Eskom), Serutle Ntlatleng (Ekurhuleni Metro) and Mkhuseli Faku (KES) that examined many aspects of the programme performance. The day’s programme concluded with a look at the community perspective on electrification.

Day 2 commenced with another interesting panel discussion on the `technical issues in electrification’, which included presentations by Nomvula Kungwane (Eskom), Jay Kalichuran (AMEU) and Mr U Huber (Consulting Engineering Council of SA), highlighting many of the significant challenges facing the implementers of the electrification programme. Another panel discussion on `Funding options/models’ included an extraordinarily biased presentation by Ms M Moore of National Treasury that criticised municipalities for not utilizing electricity income for electricity projects and suggested that electrification could not continue to be a subsidised sector. No mention was made of the Eskom `profit’ or the fact that it was fully subsidised by the fiscus for electrification projects.

The Indaba concluded with calls for a fresh and innovative strategy to achieve universal access to electricity in South Africa. This should include an examination of the ways to improve the effectiveness and efficiency of our implementation of the INEP. Various speakers called for an urgent reassessment of some of the electrification policies such as the `80% occupancy rule’ and `differentiated funding (different treatment of Eskom and municipalities)’ as well as the need to formalize the relationship between municipalities and Eskom. Dr Wolsey Barnard advised that the valuable discussion and suggestions made during the Indaba will form the basis of a document that will be submitted to three workgroups that will be established to further investigate and advise DoE on:

Access to energy – an analysis of the current figures and a reassessment of the universal access target;
Funding options; and
Planning – including many of the technical challenges raised during the Indaba.

All delegates to the Indaba will receive a copy of the document setting out the `way forward’ and copies of all of the presentations have been posted to the DoE website at www.energy.gov.za (to access the presentations, select the “events” icon on the website and then select the “INEP” icon). Readers are advised that some of the presentations are large files. A selected number of the presentations are available on the AMEU website.

Department of Labour dumps the Electrical Contracting Board

[Your Name Here] — Tue, 27 Mar 2012 12:52:59 +0000

In an article published in Vector e-News: Issue No 55 on 22 March 2012, Chris Yelland reports that `The Chief Inspector of the Department of Labour (DoL) has given notice that, with effect from 1 June 2012, it will assume responsibility directly for the statutory registration of electrical contractors, a function that had previously been delegated by the Chief Inspector to a somewhat obscure industry body known as the Electrical Contracting Board of South Africa (ECB).’

In the same issue of Vector e-News: Issue No 55, Chris Greager, national director: Operations for the ECA(SA) in his article on `What is happening in the industry?’, advises that `…..the ECB has been doing the registrations since February 1993, and employed the ECA(SA) as its service provider to carry out the function on its behalf until September last year. We then gave notice to terminate the contract because we were under-recovering costs. The ECB then continued to carry out the process on its own, via electronic registrations.’

Chris Yelland reports that the Chief Inspector (of DoL), Thobile Lamati, has now instructed the ECB to hand over the register of electrical contractors kept by the ECB to his office by no later than 14 April 2012, and has indicated that as of 1 June 2012 the registration of electrical contractors will be done at the Labour Centres of the DoL throughout South Africa. In response to the termination notice given by the DoL, Chris Yelland notes that `…ECB chairman Tony McDonald has indicated that the ECB accepts “with a certain sadness” that its services are no longer required by the DoL. He further indicates that he trusts that the DoL will have the necessary ability and resources at its disposal to continue with this important task.’

Copies of both of the Vector e-News articles quoted are available here.

Appointment of private contractors by municipalities

[Your Name Here] — Tue, 27 Mar 2012 12:47:22 +0000

The AMEU has recently been provided with a copy of a letter dated 15 February 2012 that the Electrical Contracting Board (ECB) has received from the Chief Inspector, Department of Labour (DoL) in response to a query it had raised in respect of the appointment of private contractors by certain municipalities.

Mr Tony McDonald, Chairman of the ECB advised that on investigating whether these contractors were registered or not, `....the board found that apparently some of these contractors were not registered with the ECB and that at least in one instance, the registered person was registered as a tester for single phase and was working on 3 phase and 11Kv installations.’ The Board believed that this practice was `.. strictly illegal in terms of the Regulations’ and had enquired from the CI `........ whether municipalities had by any chance been given exemption and whether municipalities were required to issue certificates of compliance for installation work as defined and carried out by them.’

As a result of content of the CI’s letter, the Board interpretation is that `.....municipalities have no exemption and must issue certificates of compliance for all work executed by their appointed contractors and work within the requirements of the Occupational Health and Safety Act.’

A copy of the Chief Inspector’s letter to the ECB dated 15 February 2012 is available here.

Independent Systems and Market Operator [ISMO] Establishment Bill [B9-2012]

[Your Name Here] — Tue, 27 Mar 2012 12:43:10 +0000

An article in the May 2011 edition of this e-Bulletin advised of the Department of Energy’s intention to submit an Independent System and Market Operator Bill to Parliament and invitation to submit comments on the draft of the Bill to the Department no later than 13 June 2011.

Interested reader should note that DoE have submitted a revised ISMO Bill to the Parliamentary Portfolio Committee on Energy in March 2012. It has also invited written comment on the revised bill which should be submitted by no later than Friday, 13 April 2012 to Mr S.J. Njikelana, MP: PC on Energy and marked for the attention of Mr A. Kotze, Parliament of RSA, PO Box 15, Cape Town 8000. Enquiries may be directed to Mr A. Kotze on tel: 021 403 3662, cell: 083 709 8470, fax: 086 505 5618, or email: akotze@parliament.co.za.

The Bill provides for the establishment of an Independent System and Market Operator as a state-owned entity which will provide an independent system operation to ensure safe, secure and efficient operation of the integrated power system, and trading of electricity at wholesale level, and to provide for matters connected therewith.

Public hearings are scheduled for 15 & 16 May 2012 and persons interested in making an oral presentation to the PC are requested to advise Mr Kotze by 13 April 2012.

A copy of the Bill and invitation to comment are available here.

NERSA: Reasons for decisions on 2012/13 tariff increases

[Your Name Here] — Tue, 27 Mar 2012 12:36:16 +0000

This e-Bulletin has carried two articles on the absence of the Energy Regulator’s decision on the Municipal tariff guideline for 2012/13 which were `........due to some unforeseen delays.’ It is reported in the February 2012 edition that some municipalities had been advised in writing by NERSA that their average tariff increase should be limited to 19.82%.

The reason for the delay became clear on 9 March 2012 when NERSA issued a media statement announcing that it had restricted the Eskom average price increase for the period 1 April 2012 to 31 March 2013 to 16.0%, down 9.9% from the previously approved 25.9%. The statement also announced that the `Local Authority Tariff (effective 1 July 2012)’ would be 13.5% with the `municipal tariff guidelines increase for the financial year 2012/13’ set at 11.03%. A table setting out the `revised’ municipal tariff benchmarks was also included.

NERSA also provided a copy of a letter addressed to the Municipal Managers of licensed electricity distributors dated 9 March 2012 that confirms that municipal bulk tariffs will increase by the 13.5% and that their guideline increase would be 11.03%. This letter makes no reference to the earlier advice to municipalities to limit their 2012/13 increases to 19.82% on which a number of budgets will have been formulated. No doubt, the tariff people in many municipalities have had to frantically revise their budgets to both get approval from their Councils before the end of March and submit revised applications to NERSA. Whether these applications are processed by the time Municipal budgets have to be finalised remains to be seen.

In a short statement welcoming the reduction in the bulk tariffs (included at the beginning of this Bulletin), AMEU President Michael Rhode has urged municipalities to submit their applications as soon as possible in order to try and meet these budget deadlines.

An AMEU circular distributed on 13 March 2012 also provided members with copies of the NERSA `Reasons for Decision’ documents related to both the review of the Eskom tariffs and the municipal tariff guidelines. They are available on the AMEU website for those who may not have received the circular.

The Eskom RFD document states that (page 3) `Eskom’s request for the review of the price increase emanates mainly from the State of the Nation address of 09 February 2012, wherein the President stated the following:"There is an ongoing concern from business and communities about high electricity costs".

A NERSA notice issued on 24 January 2012 advised that `…..the public hearings on the review of the Inclining Block Tariffs (IBTs) and the Multi-Year Price Determination (MYPD) methodology which was (sic) scheduled to take place on 02 and 03 February 2012 at the NERSA offices in Pretoria has (sic) been postponed until the finalisation of the review of ‘The South African Electricity Supply Industry: Electricity Pricing Policy GN 1398 of 19 December 2008’ (EPP)’.

Engineering News Online published an article in its 10 March 2012 edition in which it is reported that ‘However, it was confirmed on Friday that there would be no change to the policy [EPP] with government reaching consensus that the current policy, which was premised on a transition towards the long-run marginal cost over time, offered sufficient flexibility to meet the price-smoothing objective.’ A copy of this article is also available here.

Municipal members will be interested to note that the increase in their average tariff rates is lower, at 13.5% with effect from 1 July 2012, than the Eskom average price increase for 2012/13. This is a reversal of the situation over the past few years when the municipal bulk tariffs increased at a greater percentage that the average Eskom increase (2011/12 – Eskom average increase was 25.8% while that charged to municipalities was 26.71%). Eskom were asked for an explanation and responded that `The reason why the effective municipal increase is lower than 16% this year is because of the MFMA timing and volume variance’. The full explanation is too long to be included in this article but are available here, along with a formal communication on the matter. Suffice to say that Eskom confirmed that `13.5% is therefore the average increase, including the environmental levy charge that will be applicable to the local authority tariffs from 1 July 2012.’

Queries may be sent to Peter Fowles at pf15@mweb.co.za.

'Scandalous' bungling leaves young electricians without proof of qualification

[Your Name Here] — Tue, 27 Mar 2012 12:29:44 +0000

An observer of the electricity distribution industry could be forgiven if he or she is left with the impression that the training environment in South Africa is in a shambles after reading three articles published in reputable journals recently.

The first was an article published by Engineering News Online in its 16 March 2012 edition which reports on an impassioned plea by the South Africa’s Electrical Contractors Association [ECA(SA)] for greater urgency to be given to dealing with what it describes as scandalous administration and training-payment delays at the troubled Construction Education and Training Authority (Ceta), which was placed under administration last year.

It also quotes National director Chris Greager as saying that ECA(SA) has submitted 100 apprenticeship contracts to the Ceta for registration with only 15 having been returned, the balance having been "sitting there for months", despite the fact that they are supposed to be processed within 21 days. "We have another 100 people who have passed their trade tests still waiting for their trade test certificates, some of them for in excess of two years," an exasperated Greager reports. "They cannot work as electricians without that certificate that is their diploma." Ceta's acting CEO Sonja Pilusa is reported to have denied the accusations.

Chris Greager, in an article published in Vector e-News: Issue No 55 - March 2012 asking the question `What is happening in the industry?’, states that `Training in the industry is a disgrace and something the ECA(SA) has attempted to discuss and resolve with the Department of Higher Education and Training, the ESETA and the Construction SETA (CETA) under which the industry now falls.’ After closing their training centre in Durban in the middle of last year because it was no longer financially viable, the Ceta has failed to provide accreditation to the service provider ECA(SA) approached to carry out training and trade testing for the industry in KZN. `The worst is yet to come.’ said Mr Greager, `The accreditation of our training centres in Germiston and Cape Town expired on 25 February 2012, and our appeals to the CETA to arrange the necessary accreditation inspections have fallen on deaf ears.’

The final article was published by ESI Africa E-news on 22 March 2012 in which the views of Mark Mfikoe, the president of the Electrical Contractors Association of South Africa [ECA(SA)] on the training scandal are reported. He laments that `The Energy Seta was placed under administration and the electrical contracting industry was transferred to the Construction Seta, and before you could wink, the Construction Seta was itself placed under administration and still is.’

Mfikoe would like to see (the) people responsible being held accountable for their actions. “I listened to South Africa’s finance minister talk about the usage of money for training the other day and I had to ask myself, does this person have a clue what we are going through? Does he know how much this country’s skills development mandate is being compromised by officialdom in dedicated departments with no dedication and commitment? The scary thing is that we did not have SETAs before. Do you know how much we are paying for these organisations to exist and we, as tax payers, get absolutely nothing in return.”

Copies of all three articles may be found here.

Electricity Supply Situation

[Your Name Here] — Tue, 27 Mar 2012 08:57:48 +0000

The daily `Power system status report’ sent by Eskom to a number of industry participants continues to serve as a stark reminder of the delicate supply/demand balance being managed by the generation maintenance team and the National System Control. It would seem as though we are being spared the spectre of load shedding by the efforts of these people and those from Eskom IDM, together with those in South Africa who can and are willing to reduce their electricity consumption. As a nation, we have cause to be extremely grateful to these individuals and organisations.

In the meantime, Engineering News Online has published three articles that offer both a modicum of concern and of hope. The first of these on 6 March 2012 advised that `The second bid window for the procurement of 3 725 MW of renewable energy capacity from independent power producers (IPPs) closed at 18:00 on Monday (5 March 2012), with 2 309 MW still available for allocation to developers.’

It also reported that `Government was hoping for increased competition in the second round and was especially keen to select projects with higher local content levels than had been achieved during the earlier round. During the second bid period a target of 60% local content would be demanded from certain technologies.’ The expected announcement by DoE of the number of bids received, the combined capacity of the projects submitted and the technology solutions proposed, appears to have not materialised.

The second article published on 7 March 2012, reports on the issue by DoE and the National Treasury of a request for information (RFI) from potential developers of cogeneration facilities, as well as those coal-fired power stations, natural gas facilities and imported hydropower opportunities that could be introduced into the country’s stressed power system before March 2019. Responses are required by 12:00 on March 26, 2012. The new RFI is intended to “generate information to assess the projects of potential developers, as well as the readiness of the market to enter into intensive procurement and fast-track negotiation processes” and follows a similar request for information for renewable energy projects issued in October 2010. This latter information was later used by the DoE and the National Treasury to inform the framework adopted for the renewable energy independent power producer (IPP) programme, under which government would procure an initial 3 725 MW of capacity by 2016.The article reports that the results of this latest RFI would also be used as the basis for the development of an IPP procurement process.

The final article on 9 March 2012 reports that Eskom announced that it would shut down unit 1 of its Koeberg nuclear plant from Monday (12 March 2012) until early June for scheduled refuelling and maintenance. The Eskom statement also said that "The shutdown has ... been taken into account into Eskom's plans to keep the lights on, and is not expected to result in a shortage of supply to the Western Cape (province) or the rest of the country".

Copies of the Engineering News Online articles are available here.

Namibian Branch meeting: 8 March 2012

[Your Name Here] — Tue, 27 Mar 2012 08:32:33 +0000

The AMEU Namibian Branch held a very successful two day meeting in Windhoek on 7 and 8 March 2012. It was reported that 95 delegates had registered their intention to attend the meetings but the actual number that attended did not quite match this figure.

Proceedings began with welcomes by the CEO of the City of Windhoek and Mr Joseph Iita, Permanent Secretary of the Ministry of Mines and Energy and AMEU President, Michael Rhode. The first day comprised an agenda of SARPA issues culminating in the formal establishment of a SARPA Namibian Branch and election of its first Committee.

The second day commenced with a summary of AMEU structures and operations as well as the current issues being addressed in the South African environment. A number of very interesting and valuable papers were presented to the delegates culminating in an overview of electricity pricing and EDI performance in Namibia by Pinehas Mutota, Manager: Economic Regulation at the Namibian Electricity Control Board. It was heartening to see the involvement by the Namibian Regulator in AMEU Branch activities and the meeting was deemed to have been very successful.

The Branch re-elected its current Chairman, Vice-Chairman and Secretary for another term of office.

AMEU Namibian Branch Committee: (L to R) Leon Hanekom, Oshakati; Ralph Ham, Swanib Cables; Gerhard Coeln, Erongo RED & Vice-Chair; Michael Rhode; Ferdinand Diener, City of Windhoek and Branch Chair; Wiseman Molatzi, Conselect Engineering and Affiliate Vice-Chair

Important meeting dates for 2012

[Your Name Here] — Tue, 27 Mar 2012 08:16:43 +0000

April 2012	Affiliates Main – 5 April 2012 Branch meeting Eastern Cape - 11/13 April 2012 [Katberg Eco Golf Estate, Ft Beaufort] FS & NC – 20 April 2012 [Bloemfontein]
May 2012	Branch meetings Bushveld – 4 May 2012 Good Hope – 18 May 2012 [Wellington] Highveld – 25 May 2012 Affiliates Steering - 31 May 2012
June 2012	Affiliates Main – 7 June 2012 Branch meetings Eastern Cape – 7/8 June 2012 KZN – 21/22 June 2012 [Eshowe - to be confirmed]
July 2012	AMEU Committee meetings – 17/18 July 2012 Affiliates Steering - 26 July 2012
August 2012	Affiliates Main – 2 August 2012 Branch meetings Bushveld – 3 August 2012 Highveld – 10 August 2012 Good Hope – 17 August 2012 [Koeberg] FS & NC – 24 August 2012
September 2012	Nil
October 2012	AMEU Convention – 15 to 17 October 2012 [Emperors Palace, Kempton Park, Ekurhuleni] Executive Council – 18 October 2012 Affiliates Steering - 25 October 2012
November 2012	Affiliates Main – 1 November 2012 AMEU Committee meetings – 7/8 November 2012 [George] Branch meetings Bushveld – 2 November 2012 Good Hope – 8/9 November 2012 [George] FS & NC – 16 November 2012 KZN – 22/23 November 2012 [Didima]