Options for a prepayment framework for the City of Cape Town in RED 1

1. Options for a prepayment framework for theCity of Cape Town in RED 1 Neil Ballantyne

2. Electricity vending in REDs:Discussion of options Aim of presentation: • List existing systems in CT Metro • Give overview of possible RED vending system components • Examine option for each component • Present favoured option of the City for RED system • Stimulate discussion

3. Six existing vending systems in CT Metro area [1]: • Cape Town and South Peninsula areas: • Syntell master system • 380 000 meters • 125 off-line vending outlets (municipally supported) • 110 on-line vending outlets (managed by vending service provider) • 1,1 million transactions vended per month • R45m value of sales per month • R350 000 arrears recovered per month

4. Six existing vending systems in CT Metro area [2]: • Tygerberg area • Syntell master system • 56 000 meters • 38 off-line line vending outlets (municipally supported) • 43 on-line vending outlets (managed by vending service provider) • 250 000 transactions vended per month • R9,9m value of sales per month • R33 000 arrears recovered per month

5. Six existing vending systems in CT Metro area [3]: • Oostenberg / Helderberg areas • Landis & Gyr master system • 51 200 meters • 35 on-line line vending outlets (municipally supported) • 30 on-line vending outlets (managed by vending service provider) • 128 000 transactions vended per month • R6,8m value of sales per month • R35 000 arrears recovered per month

6. Six existing vending systems in CT Metro area [4]: • Blaauwberg area • Actaris master system • 13 000 meters • 14 on-line vending outlets (managed by vending service provider) • 130 000 transactions vended per month • R2,2m value of sales per month • R21 000 arrears recovered per month

7. Six existing vending systems in CT Metro area [5]: • Eskom supplied area: • Actaris master system • 80 000 meters • On-line vending outlets and database hosted external to Eskom by service provider • PN Energy (Khayelitsha) • Actaris master system • 60 000 meters • On-line vending outlets

8. Discussion of possible system elements for RED1: SMS • Where should RED’s SMS be located? • Centralised for country? • Regionalised in each RED area? • If regionalised • Hosted outside RED? –ie. outsourced • Run internally by RED staff? • Discussion issues • Auditing of transactions • Control over revenue stream • Recovery of arrears via vending system • – link needed to billing system SMS + Encrypt Modules

9. Require a link to REDs Billing system: To enable one view of all customers Billed and prepaid Source for customer and meter data Control of arrears recovery – billing system holds customer accounts – not SMS Vendor control accounts for daily banking of proceeds from sales Discussion of system elements: Billing system Billing System

10. Vending outlets must be: Conveniently postioned In safe locations Open after normal working hours Secured against theft Two forms of vending outlets Those managed by RED Those managed by vending service providers Discussion of system elements: Vending outlets

11. Require a skeleton of RED managed vending outlets (CDUs) distributed throughout the area to ensure availability of purchase points for prepaid electricity customers at all times Vending contract is between RED and shop owners These vendors to have emergency off-line vending capabilities so if all else fails customer can still buy electricity – essential service Discussion of system elements: RED managed vending outlets RED CDU RED CDU RED CDU These vendors to have emergency off-line vending capabilities

12. Vending service providers appointed to manage networks of vending outlets: Chain stores / shops Internet Cell phone via SMS messages Interactive voice response on telephone Unattended terminals Contract is between vending service provider and RED Vending service provider has contract with each vendor No interaction between RED and individual vendors Question: How to select vending service providers? Discussion of system elements: Vending service provider managed vending outlets Vending Service Provider Networks

13. Communication network links all element of system System is run on-line to SMS simplifies tariff management issue of free basic electricity This allows bank type terminals at vendors Must provide for redundancy in communication channels using a selection of: GRPS modems of cellular network provider X 25 Telkom Diginet lines Internet connection Swiftnet radio links Discussion of system elements: Communication network Communications Cloud

14. Remotely located disaster recover site Linked to main SMS – regular replication of data Provides alternative for generation of encrypted transaction codes if comms to main SMS or main SMS itself fails Daily tape back-ups Emergency off-line facilities at CDUs ensure sales possible in case of catastrophic system failure – sales at default tariff, no arrears, no service charges. Discussion of system elements: Disaster recovery Disaster Recover SMS + Encrypt Modules

15. Communication network links to banking institutions for Verification of account status prior to purchase Payment transaction for electricity purchased – credit or debit card Discussion of system elements: Link to Bank EFT To Banks

16. What database to use? Oracle? MS SQL? Open source – eg. MySQL? Need to consider: Licencing costs Licencing for connection of vending service providers Open source in Government’s chosen route – lower cost , good performance Database licencing issues

17. Vending system for RED RED’s Systems EFT To Banks Billing System SMS + Encrypt Modules DisasterRecover SMS+ Encrypt Modules Vending Service Provider Sales points Communications Cloud Cell phones Chain stores & Shops Vending Service Provider Networks Internet RED CDU Interactive Voice Response RED CDU RED CDU RED CDU Unattended terminals All with off-line facilities

18. Finally…… • Questions????? • Thank you