Accurate metering raises profits

For many years, CEMIG has been concerned about losses, both commercial and technical. Most of the commercial losses are related to energy delivered to customers that is either partially billed, or not billed at all. This means that if we can find the errors, we can devise ways to avoid them. Some of the actions we take to avoid commercial losses cause positive effects in the area of technical losses, since we decrease the maximum current in a given part of the electrical system.

We realise that taking action in a systematic way in many different areas is needed in order to achieve positive results. The principal areas are:

  • Metering
  • Customer installations
  • Inspections

Commitment from the upper administration is vital, as is their support concerning metering quality and the metering quality policy.

A quality policy allows us to make long term plans that will include:

  • Establishing goals and the responsibility for managing them
  • A metering device laboratory
  • A metering device management system
  • Field tests and inspections
  • Personnel training
  • Updating customer files continuously
  • New metering technologies (DSM, AMR, etc.)
  • General standardisation (metering devices, customer installations, working procedures).

The integration of these actions can ensure permanent control over commercial losses. If we are able to keep these losses to a minimum, we can achieve good results for our shareholders and fair tariffs for our customers.

COMMERCIAL LOSSES

Although our commercial losses are at a reasonable level (about 0.5% of the total energy sold) they amount to about US$12 million a year. Last year we spent US$2.1 million to run field tests and inspections. We recovered US$6.2 million, 60% of this coming from theft cases and 40% from our own errors.

With 5 million meters installed over about 640, 000 square kilometres we need to give special attention to defective meters, bad connections (mainly in indirect metering using CT/VT) and the errors caused by ageing meters. Obviously we also need to worry about illegal connections, meter by-pass, meter tampering and other methods employed by people in order to pay less for electrical energy.

We are particularly concerned about some cases we have detected related to MV customers. These cases involve large amounts of money (about US$600,000 each). They all involve professional people and are difficult to detect. Most of them result in prosecution and consequently take over a year to resolve.

As we take action against the criminal methods used to steal energy, our internal errors become a more relevant percentage of revenue loss. The following paragraphs describe some of the steps we have taken to increase CEMIG’s profits.

METERING DEVICES MANAGEMENT SYSTEM

We have created an identification label for each metering device, and software to manage the data. In the case of meters that were already installed, we visited the installations to apply the labels. Devices bought after 1985 have had the labels printed by the manufacturer according to our instructions.

This system has allowed us to conduct statistical studies and, when necessary, to locate and replace some devices. We can follow the performance of each kind of meter, with accurate feedback concerning quality and economic life.

QUALITY POLICY

Customers need to be assured that all our meters and associated devices are able to register energy consumption (kWh) and demand (kW) correctly. High quality laboratory support is necessary to evaluate and maintain the quality of the metering devices and to have effective control over their performance during their economic life. The laboratory is registered by our Metrological National Agency (INMETRO) and operates to ISO 9000 standards.

TRAINING STAFF

We support a technician’s school, where all employees who are involved with connecting new customers, installations and inspection tasks are trained. Since we continually have new equipment or new procedures, we also offer skills update training. We believe this is a necessary investment; our people must work correctly if we want to avoid new problems.

Fig. 1 Revenue recovery (US$ Million)
Received from Theft Cases Received from Internal Errors Total Recovered Total Inspection Costs Commercial Losses
1997
2.2 0.9 3.1 1.85 12.0
1998
4.2 1.6 5.8 2.0 11.5
1999
3.7 2.5 6.2 2.1 11.0

STANDARDISATION

We have developed standards that provide information to engineers, customer installation personnel and customers in general.

They include:

  • How to construct installations for low and medium voltage
  • Where and what kind of materials they can use
  • General responsibilities concerning our law
  • Tariff options
  • Applicable national standards
  • Specific requirements concerning environmental protection and licences from other official/public bureaux.

There are internal standards and manuals that cover the proper procedures to use when installing equipment and making inspections and tests. We also have technical specifications covering meters and associated devices such as CT, VT and seals bought by CEMIG, as well as specifications covering materials and equipment bought by customers, such as meters and circuit breaker boxes.

NEW METERING TECHNOLOGIES

Since 1993 CEMIG has been concerned about the distribution load profile. We apply a time-of-use tariff for the biggest customers (high and medium voltage). But if one looks at the system load profile, it becomes apparent that we have a very strong demand peak around 5-7 p.m.

Surveys showed that electrically-heated showers (5kW average power) are the most common source of electrical use during peak time, mainly in poorer households. We developed a residential load management system in association with a Brazilian company. If a customer agrees to install the load control device, we give him a discount of 20% of total consumption. In this way the system is a ‘social tariff’ applied to poorer people, which provides CEMIG with a way to postpone some investment needed to improve line capacity.

This system works with a central device (with possible remote access via phone, radio or satellite) for each secondary distribution transformer. The central device controls modules installed in the meter and main circuit breaker box. During peak time the customer is able to consume up to 15A (not enough to turn on the electric shower). Out of peak time he is able to use more than 15A.

The modules and central device communicate via power line carrier. Since we have two-way communication, the same system allows us a remote reading and a low voltage differentiated tariff. We are also able to disconnect/reconnect where necessary.

FIELD INSPECTIONS

CEMIG has been divided into seven regional areas, each one with its own inspection team. The Billing, Metering and Revenue Protection Department coordinates the activities. We offer the regional areas training, support and standards concerning equipment and procedures, and often work together with the teams.

We select our inspectors from the most experienced employees, and we supervise their behaviour, as they have to face difficult situations when working in the field. The inspection teams are able to detect theft cases (the most common method is by-passing the connections, mainly in indirect metering which needs CT/VT) and identify other irregularities.

To give us an indication of the problems, we developed software which sends inspection orders to regional areas. These orders are created by considering events which point to the possibility of irregularities. On average we have achieved a 20% accuracy rate. This software also provides a way to control the irregularities that have been detected, and to show us how much we have recovered, the cost of recovery, the number of inspections made, by whom and when.

Each month we are able to send a report to the regional area managers, allowing them to compare the effectiveness of the inspection teams from different areas.

ABOUT CEMIG

CEMIG is the largest integrated power utility in Brazil, with almost 5 million customers, a distribution network of 290 000km and 37 generation plants with a total installed capacity of 5.664MW. As a result of the restructuring of the electricity sector, CEMIG is being divided into three different companies, for generation, transmission and distribution.

In addition to supplying electric power CEMIG also distributes natural gas, and uses solar power to supply the needs of customers in remote locations who are distant from the conventional network.