AMR - the cure for energy theft?

I want to share the hope and dream I have for a cure-all solution to the problem of revenue protection, only a part of which includes AMR. Nevertheless this article will attempt to have you contemplate the usefulness of AMR, not instruct the world on how AMR can be defeated.

Detroit

POINT OF VIEW

To appreciate the following discussion, you should have a feel for my point of view. I have 31 years of fieldwork experience dealing with electricity and steam meters. I became familiar with customer behaviour and utility services while engaging in turn-on, disconnects, trouble shooting, residential and commercial wiring problems and repairing customer appliances. The later years were spent in the revenue protection area, when I investigated 700-1000 cases per year of energy fraud. It is sad but true that when you deal mainly with customers who have trouble with their utility account, you become a bit sceptical of their intentions.

METER = CASH REGISTER

Utility meters are the means to measure and bill customers for usage – just like a cash register. The accuracy of the meters  determines the accuracy of recorded revenue. The purpose of AMR is to completely eliminate visits to the cash registers, but this leaves utility meters vulnerable to intrusion. 

Deregulation raises another potential concern – the source of the meters. The straightforward meter of today is owned and provided by the local distribution company. In a competitive environment, meters may be available in a retail store or from an electricity provider. Who will monitor these meters for accuracy and security? Who will care if the meter is tampered with or by-passed? Who suffers the loss? Clear roles have not been laid out for participants in a deregulated environment.

THE CURE

The accuracy of meters determines the accuracy of recorded revenue. Earlier this century the cure-all revenue protection device was the metal meter cabinet. The Detroit Edison Company noticed that the practice of tampering with meters increased rapidly in 1931 and 1932. In 1933 steps were taken to address the problem. There were additional investigations in the field, and the practice of transferring meters to the outside of the building and putting them in a metal enclosure was introduced. In 1934, an analysis of actual tampering reported a dramatic 50% increase in kWh sales after outdoor meter cabinets were installed.

Other devices have been invented over the years – improved locking seals, tamper-resistant meters, meter cabinet locks and tap detection equipment. Now as the year 2000 approaches, numerous revenue protection ideas have come and gone as technology, the economy and societal values have transformed revenue protection strategy over time.

Is the AMR meter the current cure for detecting energy theft? Many suppliers of meters might recommend that it is. But, just as the name suggests, reading meters automatically is what they were created to do. As with many other items we own, AMR is just a tool to help utilities do a job or service customers more efficiently.

AMR may be a leading edge cure, but it is my view that a complete infrastructure programme must be in place to support a new advancement in technology.

Infrastructures are composed of people, processes and existing computer systems. Infrastructure programmes are a vital part of the success achieved by AMR and must not neglect the following fundamental elements.

Sealing programme

A sealing programme is the first line of defence to complement AMR, since it is a simple indication at the meter that something is wrong. If a utility company has all its sealing devices securely inventoried, then the basics are in place. If you are aware that seals are sold or given away by your employees, you must rethink your strategy. Seals must be stored securely and assigned to individuals responsible for their safe-keeping. Training field persons in suitable supervision and follow up inspection of seals is a basic safeguard of the cash register.

Locking programme

Meter locking devices in conjunction with a meter seal represent an enhancement in the effort to prevent tampering. They prevent self-reconnects and provide an additional level of security at meter locations that you will visit less often or not at all in the future.

Some people don’t lock their cars and houses. However, if we have something we care about, most of us will lock it up. I believe your cash register falls into the category of valuables. The meter at each location must be protected with a properly applied locking device. Before locking the meter, every utility service should be checked for any signs of previous tampering or connections ahead of the meter. The most ingenious or daring violator will make connections to your wire or pipe ahead of the meter.

Collection programme

Collection of revenue is the final step in generating and delivering your utility product, and major problems occur when customers try to avoid the collection step. Customers restore their own service, switch the name on their account, and bypass the meter. Some customers will try to restore supply at the meter or pole after an attempt to switch names fails. All this tampering can be a real safety problem to the public and to utility employees. Try everything to stop deception, including prosecution. Aggressive collection programmes resort to diligent, timely and persistent follow-up to collect the revenue and cut losses.

Workforce programme

Having a multi-talented work force is a utility’s finest tool in the attempt to work smart. In Kentucky many years ago, I noticed this technique when interacting with the local utility. Kentucky Utilities had a multi-talented employee to handle everything from turn-on and collections to light line work for a specific territory. This person was the utility’s ambassador. This concept can be applied to all utilities, so customers get to know the field person and vice versa.

Customer information system

Are you using the customer information system (CIS) information available to you on your own system to solve revenue loss issues? It would be nice to believe that your write-outs or exceptions are all worked, but that may not be practical. At DTE Energy, revenue protection and recovery efforts are benefiting from reviewing write-outs and exceptions for the opportunity to recover lost revenue. Working exception is a valuable tool that must be used to the full before you venture out into market analysis software or other customer profiling tools. The CIS software is the tool to minimise needless follow-up inspections at the meter.

The addition of AMR equipment can enhance customer information systems. If the AMR tamper signal is to be interpreted meaningfully, the CIS programme must be able to differentiate between signals indicating tampering and those involving legitimate business interruptions. Legitimate interruptions can signal a power outage, a field person inspecting the meter, or authorised interruption of service occurring in a neighbourhood. Tampering interruptions can signal altered meters or diversion of power. Other sources of revenue can be developed from information regarding load research, living habits, and market analysis. All these valuable outcomes are reasons to make sure the AMR equipment is securely locked up!

BRAINSTORM SOLUTIONS FOR FUTURE REVENUE PROTECTION

In preparation for a competitive marketplace, utilities will begin using more AMR– which means less frequent meter ‘cash register’ inspections. So now is the time for utilities to start brainstorming to develop additional technologically sophisticated revenue protection solutions that enhance AMR results.

First, we must develop an audit/revenue programme to inspect the meter and services that are not regularly visited. An inspection policy should be communicated to all customers. For best results, visits should not be announced in advance.

Second, manufacturers will develop additional technology to refine tamper signals, and enhance encryption of meter reading signal transmissions.

Third, load research data will more accurately pinpoint potential tampering.

Fourth, an idea which may be as far fetched as the Star Trek communicator of twenty years ago. Our current flip-open cell phones mirror that communicator. The electricity utility could transmit a changeable signal that would destroy any electrical device that was circumventing a utility’s legitimate meter. The legitimate meter could act as a filter; just as the cable industry filters its premium pay channels. In less developed countries, where theft or unaccounted losses may be 40% or higher, this approach to revenue protection could pay for itself in a short time.

Fifth, the question of rewards. Some utilities reward their employees for discovering and reporting energy theft – why not reward customers who report confirmed tampering, perhaps by way of a cash amount credited to their utility account?

SOLUTIONS ONLY LIMITED BY IMAGINATION

Is AMR the cure for energy theft? I see AMR as we know it today as a stepping stone to more sophisticated data collection to feed information systems.

My hope for AMR is that other capabilities will be identified during product development to service customers and differentiate the local utility from commodity suppliers. My dream is that utilities will not view AMR as a cure-all tool in itself, but as a component in the solution to revenue protection. 

Cost conscious companies operating in increasingly competitive markets will be driven to seek ways to close the loopholes in losses due to energy theft. AMR and its ability to collect a vast amount of data may be as important as the energy delivered by utilities. Revenue or information protection will remain centred on the meter, its security and the security of the transmission media. Utilities in the US still have time to contemplate a strategy before deregulation.

The total on your cash register is up to you!