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Finding your customers to reduce losses – a case study

Aurecon embarked on a PoC capture project with the Nigerian Power Sector in 2016 to facilitate loss reduction and improve its customer service.

Across Africa, technical and non-technical losses is a growing concern for many electricity network utilities (transmission and distribution companies). One of the key contributors to increasing losses is that the utilities do not have the relevant data regarding their customers population, location and growth to support loss reduction/revenue enhancement initiatives.

It is essential that electricity utilities manage and maintain all Point-of-Connections (PoC) with related customer and meter data. This implies accurate spatial locations to enable follow-up work, quality assurance as well as improve customer service. Embarking on a project to field collect PoC data provides the ideal opportunity to at the same time capture and model the customer-network-link which is essential for more utility services (outage management, network planning, quality service delivery, etc.)

Executing a PoC capture project involving customers, meter counts, and location data is a huge logistical exercise that can only be done in a digital environment with comprehensive underlying quality assurance processes.

Approximately 60 data items had to be captured per PoC by Aurecon. In 2016, Aurecon embarked on a PoC capture project for an electricity distribution company in Nigeria with approximately 1 million customers distributed over 154 000 sq. km. The utility launched a PoC project involving field capture of its customer base supported with back office quality assurance to ensure all customers are correctly captured on their systems to facilitate loss reduction, create a customer-network-link to enable more advanced technical operations and at same time improve on its customer service as it relates to complaint handling and resolution.

Nigerian power sector privatisation

The Nigerian Power Sector was privatised on November 1st 2013. In the distribution subsector, 11 distribution companies (Discos) were created from the prior state-owned vertically integrated Power Holding Company of Nigeria (PHCN).

The new investors were met with the stark reality of severely run-down assets both in the distribution networks as well as company fixed assets including offices, vehicles stores etc.

Decision to sell off the Discos to private investors were largely based on what investors committed to in terms of reducing the significant losses experienced with PHCN. Private investors were judged on their proposals to how quickly they can over a five-year period reduce the baseline Aggregated Technical-Commercial & Collection (ATC&C) losses existing at time of privatisation just prior to sale of PHCN.

It did not take long for the new Disco owners to realise that the PHCN loss figures on which they based their bid was lower than reality at the Discos. This prompted all Discos owners after privatisation and handover to launch their own ATC&C loss studies to determine the actual loss level for these companies. The outcome of these invariable showed much higher losses than that provided for bidding purposes. For this case study the Disco which is subject of this paper faced 57 per cent ATC&C losses, compared to pre-privatisation baseline figure of 37 per cent provided. Coupled with the limited generation and transmission facilities, the projected income to be realised from energy sales by the Disco were clearly over optimistic and the importance of loss reduction became a very high priority for the new owner.

Losses weren’t simply a case of customers not wanting to pay for electricity, it also involves poor service delivery due mainly to unreliable power supply of over many years experienced during the days of government owned PHCN, that has justifiably created an environment in which a large portion of the customer base is not willing to pay for a service they believe they are not receiving. Adding to the challenge was a customer and billing database showing a combined customer count of 700 000 active customers of which less than 500 000 showed any activity in terms of payments/purchases made in the prior 12-month period.

The entire process was made paperless using mobile and web technology developed by Aurecon. Other factors contributing to non-technical losses included approximately 65 per cent of the customer base receiving monthly fixed estimates which inherently could not accurately reflect energy consumption, this also led to inefficient energy usage patterns since there is no incentive for customers to reduce their energy consumption if they are billed on their premise type and size alone; illegal shared accounts between customers based on a single estimated bill; as well as untidy networks and poor data.

It was evident that one of the key issues the utility faced was that it did not have sufficient information on their consumers and networks to support any type of non-technical loss reduction initiatives. To obtain data regarding their networks and consumer base, Aurecon set out to answer some of the following questions:

  • Where do we supply customers on our networks (Point-of-Connections)?
  • What are the details of customers that at this moment are supplied at those PoC’s?
  • Do these customers exist in the current billing and vending databases?
  • Are the customer’s tariffs correct?
  • Are the customers contact details up to date (address, mobile number etc.)?
  • What other work is needed at that PoC (investigate tampering, new meter installation, installation repairs etc.)?
  • How does the customers connect to the network (Develop a Customer-Network-Link)?

The utility launched an initiative to field collect information on all PoC’s and related customers and meters on the utility networks. To ensure an unbiased field audit, the decision was made that field work will be done on a clean slate approach – field teams would identify all billed and unbilled customers connected to its network and initiate a customer engagement to capture relevant location, customer and connection details. Only after the field capture, the project teams would then aim to link the customers into its billing and vending system database.

For a PoC to be considered successfully audited, the following had to be captured:

  • Photographic evidence of premise, building, a PoC and a utility account or prepayment voucher/meter number;
  • GPS locations for premise entrance, building entrance and PoC
  • MV/LV transformer supplying customer

For this project, approximately 60 data items (including attributes, photographs and GPS locations) had to be captured per PoC. A decision was made that the entire process was to be paperless using mobile and web technology developed by Aurecon.

Field work

To audit a utility with 1 million consumers over 24 months with an averaged 10 per cent no access rate implies the following field resources:

  • 126 field teams (field teams consist of twopersons for safety and cultural reasons)
  • Field teams grouped into platoons (seven teams per platoon) managed by a field supervisor = 18 platoons
  • 126+ mobile devices for field application
  • Laptops for 18 field supervisors
  • Monthly data for all devices (significant data use due to photographs and background aerial imagery)
  • Nine mini-busses (two platoons per bus)

 Mobile and web technology developed by Aurecon were used in the PoC capture process, making it entirely paperless.

Figure 1: Overview of cloud-based solution deployed

The value realised from using a web-based approach included quick turnaround time from field-to-office-to-field; simple application roll-out to new users; simple process to update application components, common data base in which all data was managed; and it enabled real-time project progress tracking.

Summary project results

The project is ongoing and projected to be complete by end of 2018. The output of the project has shown significant findings which, if addressed, will have a large impact on the utility’s non-technical loss reduction. Some of the relevant key statistics to date include:

  • At the time of publication, the project has identified more than 1 million PoC’s, of which five per cent required revisits to complete the data capture.
  • Approximately 300 000 PoC’s were identified where customers shared accounts.
  • The project identified more than 15 000 accounts that were billed at incorrect tariffs.
  • Many other instances related to under recovery or no recovery at all were recorded and sent for processing.

Key lessons learned

Role of systems

The effort required to field capture all utility PoC’s in a clean slate approach is a significant exercise involving hundreds of field resources, back office personnel and significant data management. Well-designed systems can be a crucial component of ensuring project success.

Importance of quality assurance and data governance

At the onset of the project, thousands of records were rejected per week. This quickly improved due to back office quality assurance processes. Quality assurance should be all inclusive in terms of attributes, photographs and spatial data. It should include individual record review as well combined data review to ensure high quality information.

Value of photos

Taking geotagged photographs of site work, connections, meters, accounts etc. proved to be invaluable. In many cases, data captured was queried by utility teams. Having access to photographs to prove what was found on site or to review data captured eliminated the need to return to site to confirm the data.

Sensitisation

Prior customer sensitisation is extremely important because revisits are expensive and requires special logistical arrangements. Where customer sensitisation was done successfully, the field team had very few instances of no access to sites.

Point of Connection

The PoC is the centre of the utility revenue universe. If a utility maintains a spatial database of all PoC’s, this data can always be queried to determine when last a PoC has been billed or purchased energy. The relationship between a PoC, the customer, address and meter can be maintained in these specific systems, but to have the ability to know that you have a point of connection that is not billed provides you the foundation for follow-up.

Customer network link

In areas with overhead networks it is very easy to record a customer-network-link during the project which adds value beyond only revenue improvement into areas of customer care. (i.e. Outage management, Distribution management, network planning, etc.).

Don’t only plan for the project – plan to respond to findings

The field project captured and assessed hundreds of thousands of PoC’s on the network. A variety of work instructions could be prepared per PoC (request for meter, new customers, tamper investigation, data update, etc.). While a utility can outsource such a field capture project as it is not part of normal operations, the corrective actions identified is normally managed through the internal utility systems and business processes. The amount of work instructions generated is virtually impossible for the utility to manage with its compliment of staff. The utility must make special arrangements to ensure implementation of findings to unlock the true value of a project.

Continuation of customer data capture

The exercise has proven that customer data is crucial not only to reduction of non- technical losses, but to the entire customer care and utility planning value chains. Hence, it’s important that this exercise is embedded as a permanent utility activity for all new customers as they come on to the network. 


About the Authors

Attie Senekal

Attie is a Principal of Asset Management at Aurecon. He has over two decades of experience in electrical engineering and has worked on projects in South Africa, Namibia, Tanzania, Lesotho, and Nigeria.

Coert Scherman

Coert is also a Principal of Asset Management at Aurecon. His areas of expertise include utility and public sector knowledge and insight, IT project management, and bulk infrastructure strategic planning, analysis, and design. 

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