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Document Type:Technical Update
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Revenue security is a major concern for utilities. Theft of electric service in the United States is widespread. In 2006, the revenue estimate for non-technical losses was $6.5 billion. Non-technical losses are associated with unidentified and uncollected revenue from pilferage, tampering with meters, defective meters, and errors in meter reading. In this report, revenue security describes the use of advanced metering infrastructure (AMI) technology to minimize non-technical losses.
ObjectiveRevenue security involves securing revenue that is due distribution utilities from delivery of electricity to end-users. It includes both reducing losses and collecting revenue associated with the electricity delivered. Non-technical distribution losses occur at the point of delivery and measurement. Minimizing non-technical losses increases the amount of electricity that is delivered, measured, and billed. This is the challenge to revenue security.
ApproachThe project team gathered information for this report from a variety of sources, including government surveys, industry reports, Internet searches, utilities, and vendors. When determining the impact of non-technical losses on revenue, the team examined aggregate measurements of revenue and distribution losses from reliable government statistical sources and applied ratios from various industry surveys and reports.
ResultsThe report defines revenue security as securing revenue that is due to the distribution utilities from the delivery of electricity to end-users. The report distinguishes between revenue losses caused by technical and non-technical factors, with a primary focus on the latter. Integrated with meter data management system (MDMS) technology—software that accepts, stores, and forwards AMI-collected data to utility systems such as billing—AMI significantly improves a utility's ability to monitor customers' electric meters and detect both intentional electricity bypasses and unintentional errors (for example, billing and customer service problems encountered by traditional manual meter-reading operations). The report describes AMI technologies in detail, from enabling hardware and software to transitioning from traditional systems to installation and implementation. The transition from meter reader to meter revenue protection agent also is discussed. A case study concludes the report by describing how PPL Electric Utilities of Pennsylvania successfully deployed and implemented AMR/AMI throughout its entire service territory (1,353,024 meters as of 2006).
Application, Value and UseAMI solutions involve the retrieval of daily or hourly consumption readings and use database information (comparisons with prior once-a-month readings) to identify locations where theft might be taking place. After AMI installation, utilities may uncover a substantial number of previously unknown sources of diversion. By reading meters frequently, AMI also identifies bad meters more quickly and reduces the need for estimating unmetered energy use. AMI's improved meter-reading accuracy also results in improved billing accuracy, fewer customer complaints, reduced call center traffic, and improved customer service.
EPRI PerspectiveAMI systems provide new and innovative tools for revenue assurance. With comprehensive AMI/MDMS and vigorous meter revenue protection programs, AMI will have a positive impact on minimizing non-technical losses due to theft. In areas other than theft, AMI offers additional advantages, such as using MDMS features in customer service to respond more quickly and accurately to high-bill inquiries.
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