HOME INTEGRATED REPORT ANNUAL FINANCIAL STATEMENTS SUPPLEMENTARY AND DIVISIONAL REPORT CORPORATE SOCIAL INVESTMENT ESKOM FACTOR INTERIM RESULTS
 

INTEGRATED RESULTS PRESENTATION
KING III APPLICATION
 
   



Group Customer Services

Group Customer Services’ mandate is to place the customer at the centre of Eskom’s business and manage customer relations. In this way, it aims to achieve satisfied customers who consistently rate Eskom in the top quartile.

Other key responsibilities include managing revenue, managing the demand for power by means of integrated demand-management initiatives, as well as the end-to-end service relationship with generators and independent power producers.

Operating highlights

Customers responded admirably when Eskom declared four power system emergencies and reduced demand by 600MW in November 2013, 340MW in February 2014 and 1 160MW during the load shedding event in March 2014
The preparedness level of the contact centres and provincial customer service operations was enhanced to deal with the load shedding
Integrated demand management (IDM) achieved a total of 410MW demand savings, exceeding the target of 379MW
Numerous meetings were held with the Department of Public Enterprises (DPE) and National Treasury to discuss sustainable ways to address municipal debt and implement longer-term interventions to deal with challenges. Agreements with municipalities stipulate that all current bills are to be honoured and debt is to be paid off within 12 months
Customer satisfaction scores for the key industrial customers as measured in the KeyCare surveys have continued to exceed target due to focused attention on managing relationships with these customers
Customer satisfaction as measured in the enhanced MaxiCare surveys improved over the year to March 2014 for the industrial, residential billed and residential pre-paid segments and in the PreCare segment
Continued month-on-month improvement in issuing quotations resulted in the performance as at 31 March 2014 exceeding the target
The grid access unit has successfully facilitated the connection of 21 renewable energy independent power producer (RE-IPP) projects (1 076MW) to the grid

Operating challenges

The lost-time incidence rate (LTIR) at 0.73 for the year is of concern, as it is significantly above the Eskom target of 0.36
Debt collection from municipalities and small power users remains a concern. Eskom is working closely with the Department of Public Enterprises, the Cooperative Governance and Traditional Affairs (CoGTA) department and Treasury at both provincial and national level to address the systemic causes of the municipal arrear debt. At a local municipality level, Eskom has made available cross-functional teams to share best practices in managing electricity portfolios
The total municipal arrear debt remains high at R2 593 million at 31 March 2014
Active marketing of IDM to customers was stopped as a result of the reduction in IDM funding in the MYPD 3 determination. As a result, the pipeline of projects is drying up and the outlook for the 2015 financial year is unfavourable
The Distribution energy losses measured on a 12-month moving average basis has stabilised
MaxiCare customer satisfaction scores declined over the year ended March 2014 for the agricultural and commercial segments, and despite year-on-year improvements in the other segments, MaxiCare did not meet the targets for the year
The minor project connections score of 75.1% remained virtually unchanged from the previous year and is below the target of 93%. Actions for improvement include addressing material and contractor resource shortages

A mobile customer service vehicle has improved service to rural areas in KwaZulu-Natal

Future focus areas

Improve safety awareness by implementing specific programmes
Implement improved revenue-management processes to enhance energy-protection and energy-loss programmes, and improve debt collection for municipal, Soweto, large and small power users
Explore further options to manage power demand, including demand-response programmes
Continue to source alternative funding for Eskom’s IDM programme
Further development of the small and micro generator framework, to enable connections of less than 1MW when policy and other supporting frameworks emerge

Residential revenue-management strategy

The residential revenue-management strategy, which includes Soweto, is critical in terms of enhancing energy protection and energy losses and to improve debt collection for Soweto, large and small power users. The strategy entails:

The installation of split metering with protective enclosures
Converting customers to pre-paid meters with new supply group codes to eliminate illegal pre-paid vending
A focused credit management process for all businesses, which, together with disconnections, should assist in recovering outstanding debt

The strategy has received PFMA approval and implementation of the strategy is planned for early in the new financial year.

Number of Eskom customers

Refer to table 5 under appendix A: Statistical tables on page 88.

Key financial statistics for the year ended 31 March 2014

R million Actual
2013/14
  Actual
2012/13
  Actual
2011/12
 
External local revenue 130 966   120 678   108 260  
Impairments 1 482   1 020   587  
Electricity debtors less provisions 13 573   10 173   8 835  
Provision for arrear debts 5 655   4 246   3 320  
Integrated demand management – excluding demand market participation and power buybacks 1 345   3 001   1 913  
Power buybacks1 87   2 808   1 750  
Demand market participation1 262   283   414  

1. Included in primary energy cost on the income statement.

Key performance indicators for the year ended 31 March 2014

Indicator and unit Target
2013/14
  Actual
2013/14
  Actual
2012/13
  Actual
2011/12
 
Arrear debt as % of external revenue, % 0.50   1.10   0.82   0.53  
Debtors’ days – municipalities, average debtors’ days1 22.0   32.7   22.4   n/a  
Debtors’ days – large power user debtors’ days (>100GWh p.a.), average debtors’ days 14.0   14.5   12.3   14.4  
Other large power user debtors’ days (<100GWh p.a.), average debtors’ days1 16.0   16.9   18.3   n/a  
Debtors’ days – small power users excluding Soweto, average debtors’ days 42.0   50.2   48.2   42.9  
Customer service index 88.7   86.6   86.8   85.6  
Eskom KeyCare, index 102.0   108.7   105.8   105.9  
Top customer KeyCare, index 104.0   110.8   107.5   108.0  

1. The previous KPI called debtors’ days (large power users – including municipalities) was replaced in 2013 by two KPIs: the municipalities debtors’ days KPI and other large power users debtors’ days (<100GWh per annum) KPI.

Arrear debt

Refer to the “Becoming a high-performance organisation – managing electricity debtors” section (page 96) in the integrated report for more information.

Customer service performance

A range of statistical perception and interaction-based customer surveys, conducted by independent research organisations, are used to measure customers’ satisfaction with Eskom’s service. These include:

KeyCare top customer, which measures the satisfaction of Eskom’s large industrial customers
MaxiCare, which measures the satisfaction of Eskom’s residential, small and medium customers on a perception, rather than transactional, basis
CustomerCare, which measures the satisfaction of those customers who have had recent contact with Eskom’s contact centres, as well as the resolution of service requests by the operating units

Results from these surveys help Eskom identify aspects of service that require improvement.

Customer perception surveys

Indicator and unit Target
2013/14
  Actual
2013/14
  Actual
2012/13
  Actual
2011/12
 
KeyCare, % 102.0   108.7   105.8   105.9  
Top customer KeyCare, % 104.0   110.8   107.5   108.0  
Enhanced MaxiCare, % 95.7   92.7   93.2   90.7  
CustomerCare, % 8.2   8.3   8.4   8.2  
Restoration time <7.5 hours, % 79.0   84.1   73.0   62.6  
Minor projects quotations <30 days, % 93.0   93.3   91.0   91.0  
Minor projects connections <90 days, % 93.0   75.1   75.0   85.0  
Contact centre service level, % 85.0   84.6   86.9   85.1  
Customer service index, % 88.7   86.6   86.8   85.6  

Top customers

The Eskom KeyCare perception survey is conducted by an external company. The questions in KeyCare cover various elements, including changes at board and Exco level. The survey weights are evenly distributed among all the elements.

The top customer KeyCare survey uses the KeyCare results, but applies different weights to the various elements, such that issues over which Group Customer Services has direct control carry a heavier weight. Examples are: accurate billing, knowledge of the customer business, quality of supply, etc.

The 12-month moving average top customer KeyCare service measure has improved from 107.16% at 30 April 2013 to 110.84% at
31 March 2014, against a target of 104%.

This improvement is attributable to Eskom meeting regularly with its top customers to share critical information on the system status and the capacity expansion programme. This was done with regular feedback from the chief executive to Eskom’s stakeholders, quarterly liaison meetings at plant level and customer forums. The regional key account managers and their teams also regularly visit the general managers of customers and municipal managers to share important information and to enquire about service-related issues requiring attention.

Despite the number of system emergencies, the proactive manner in which Eskom informs its customers of the system status, via twice daily reports, as well as the KeyAlert SMS messaging system, has made a difference in assisting Eskom’s top customers to plan their operational activities.

The three sub-measures for KeyCare performed well in the year under review:

The general management 12-month moving average has shown a gradual increase from 103.93% to 107.10%. During this period
56 general managers from top customers were interviewed
The engineering 12-month moving average has shown a steady increase from 107.59% to 111.96%. A total of 133 engineers from top customers were interviewed
The accounts 12-month moving average has also shown a steady increase from 109.97% to 113.45%. A total of 138 accounting staff from top customers were interviewed

Other customer perception surveys

The customer service index (CSI) is a composite index indicating the service to residential, small and medium customers. It combines two external customer service surveys (CustomerCare and Enhanced MaxiCare) and the four internal customer service process measures.

The score of 86.6% is below the year end target of 88.7% and its underperformance is attributable to:

The customer perception (Enhanced MaxiCare) score at 31 March 2014 of 92.7% was below the target of 95.7% and declined compared to the March 2013 score of 93.2%. The main causes are:
- Dissatisfaction with tariff increases
- The continuous threat of load shedding
- Dissatisfaction with metering accuracy (measurement and estimates)
- The speed of connections
- Quality of supply, outage management and restoration time
The reduced satisfaction levels occurred in the agricultural and commercial segments. However, there were year-on-year improvements in satisfaction in the industrial, residential billed and residential pre-paid segments, as well as in PreCare
- The minor project connections score remained virtually unchanged from the previous year and ended the year at 75.1 %, below the target of 93%. Actions for improvement include addressing material and contractor resource shortages
- The contact centre service level performance of 84.6% was slightly below the target of 85%. The drop in performance was due to staff shortages from October to December 2013 and the rotational load shedding for 14 hours on 6 March 2014
Other components of the customer service index performed well, notably:
- Restoration time performance continued its positive trend and improved significantly this year, reflecting Distribution’s commitment to improving performance. At 31 March 2014 the performance was 84.1% (2012/13: 73.0%), well above the target of 79.0%
- Minor project quotations experienced high volumes of requests, coupled with resource constraints in dealing with the work load. After a first quarter drop in performance, there has been a steady improvement during the year, with performance as at 31 March 2014 at 93.3%, above the target of 93%
- CustomerCare scores ended the year at 8.3, above the target of 8.2 but slightly down from the performance of 8.4 as at
31 March 2013

Safety performance

The Group Customer Services safety performance for the year ended 31 March 2014 is of concern as the LTIR of 0.73 is well above both the Eskom target of 0.36, and the March 2013 figure of 0.28. The main causes are motor vehicle accidents and slips, trips and falls. The division regretfully had one sub-contractor fatality.