Engerati Focus on Lack of Revenue Collection and Assurance Which May Put Sustainability of Utility Industry at Risk

Published: Thu 01 Aug 2013
A blog entry by Isobel Chillman

Contributed by:

Isobel Chillman
Programme Delivery Manager
Engerati

Isobel Chillman's Blog

PRESS RELEASE

London, UK, 28th July 2013

It is surprising that few utilities take revenue assurance really seriously and address these issues at the highest level, says Dean Villet, Professional Services Director of Itron, a global technology and service provider to the utility industry.

Says Dean Villet: “What we find is that service delivery has become a major challenge, specifically for African utilities, where in certain areas we are running at major losses, up to 30% non-technical losses. It really is putting the sustainability of the industry at risk.”
 
Villet was recently interviewed at the TV studios of Engerati, a leading online smart energy community platform, at African Utility Week in Cape Town. Engerati is part of the Clarion Events Group.
 
Pre-payment not the answer
 
According to Dean Villet, introducing pre-payment does not solve the issues around billing and collecting revenue. He explains: “The issue with the pre-payment meter is that it doesn’t have a meter reader looking at it every month. So, it sits in the customer domain and they have a great opportunity to tamper. And sure, smart metering is something that you can use to identify and do some analytics on it and try and pick where the losses are happening. But revenue assurance needs a much broader approach in terms of making sure that you address some of the social stigma around non-payment for services. As well as getting the utility staff to understand the issues around energy management and energy losses.”
 
He continues: “On the energy side in South Africa specifically, we have a free basic electricity grant, so everybody gets 50 units free, depending on where you live, it could be a 100 units, if you qualify. And they have looked at those socio-economic things but broader than that the losses don’t all occur in your poorer communities, the losses occur across the board. In fact, your more sophisticated theft is happening in the commercial sector as well as in your wealthier neighbourhoods.”
 
He recounts one of the worst examples they have found, namely a brick foundry that had been connected to the network illegally for years and “everything but the paperwork had been lost and they had never been loaded as a customer and had been drawing power for probably a decade without ever getting caught. And the first monthly bill that the foundry received was about ZAR 75 000 which is about USD 9000.”
 
Itron’s Dean Villet says it is a concern that revenue assurance is “fairly haphazard in most of the utilities that we see and that there has never been a really analytical big data approach to revenue assurance and that is what we are trying to push now.”
 
Itron’s Learning University making a difference
 
He says the reasons for the lack of attention to revenue assurance amongst utilities are two-fold: “you have a capacity issue in terms of hands to run the thing but you also have a skills issue. And one of the things that we see in the utilities that we deal with is that they have very good strategic plans but very limited ability to execute those plans. And obviously that is good for us as service providers to the industry but not good for the industry as a whole. And that is what we are working on. We actually have a learning university where we bring people through and we train them up around what we believe is a good methodology around revenue assurance and send them back into the utility space so that we can make a difference.”
 
 
About Engerati.com - the biggest source of content and information for the smart energy industry. Created by Clarion Energy, Engerati was created as a meeting place for energy professionals to connect, learn and share, and over the last eight months has become so much more.
 
Engerati has become a central destination for all our delegates from over 35 leading energy events to join, network and access our ever-growing archive of information. To date the network has over 17,800 active members as well as access to the Clarion Energy file, a database of over 161,383 energy professionals from around the globe.