By Ricardo Vidinich, Antonio Carlos Marques de Araujo and Maxwell Marques de Oliveira

Energy losses are present in all the electricity distributors in Brazil, distinguished only by the scale of the problem in each of the companies and the level of aggressiveness of the distributors’ markets before the introduction of measures to combat losses.

The changes that have been occurring in the management of companies in general are also being felt by the electricity distributors, which from mechanisms provided in the tariff review processes have been prompted to develop an effective management, under penalty of having their profitability weakened and not realising the full value of their investments. Improvement in the efficiency of companies necessarily implies the need to reduce electricity losses, principally to reduce the economic consequences of the high loss rates.

Within this context, the identification of areas of vulnerability of the metering equipment that could be subject to possible fraud and tampering actions by consumers due to their location inside the consumers’ dwellings, led to the idea of installing the metering equipment externally. As a result, several external metering projects have been implemented, starting with the CPRedes project by Celpa (Centrais Elétricas do Pará S/A, Belem) in 1999, in which the metering equipment was transferred to galvanised steel boxes, equipped with magnifying glass for meter reading, placed on public street lighting poles.


Schematic of an external metering system

In 2005, Ampla – Energia e Serviços S/A (Niteroi, Rio de Janeiro), faced with loss rates above 30% (i.e. more than double the national average), also sought external installation of the metering system in order to reduce irregularities. In this case the change was accompanied by changes in the medium and low voltage network standards, in addition to the installation of new digital metering to enable the possibility of other methods and procedures for reading and recording the meter data, as well as the recording of information on electrical events not provided by the electromechanical meters. The goal was to enable better exchange of information between the utility and its customers, in addition to options such as remote meter reading and remote disconnection and reconnection.

In addition to the CPRede and Rede Ampla projects on external metering, which reflect the evolution of external metering options implemented on a large-scale in Brazil, other projects are in the pilot phase or are awaiting authorisation at Escelsa (Espirito Santo Centrais Eletricas SA, Vitoria), Coelce (Companhia Energetica do Ceara, Fortaleza), Copel (Companhia Paranaense de Energia, Curitiba), Saelpa (SA de Eletrificacao da Pariaba, Joao Pessoa) and Cemig (Companhia Energetica de Minas Gerais, Belo Horizonte).

The essential mission of the regulatory agency of a service with natural monopoly characteristics (such as in the case of electricity distribution) is to ensure that the rights of regulated consumers and of service providers that operate with efficiency and prudence are respected.

The installation of electrical metering equipment in areas outside the consumer dwelling helps the electricity distributor to increase the efficiency of the reading process, to minimise cases of estimated billing, and to provide more privacy to the consumer, and consequently to improve the relationship with its customers.

Programmes and projects that result in commercial loss reduction for distribution concessionaires or licensers contribute to a tariff decrease, with real benefits to consumers. However, every technological innovation brings with it some level of distrust from sectors of society. Such phenomena become even more magnified if any of the agents involved in the process think that the change may cause them any form of loss or discomfort. Thus, the regulator’s mission was to create the necessary conditions to achieve a balance between its interests and assuring the rights of consumers and the revenue of distributors.


An external metering system

The first regulatory act on the installation of an external metering system was Order no. 401 of 30 September 1999, which approved the installation standard of the multi-meter box on urban distribution network poles, following the model developed by Celpa. However, with increasing interest by other distributors in external metering as a solution to address the problem of losses, it became necessary to create a broader regulation covering not only the solution for a specific distributor.

Aneel Resolution No. 258 of 6 June 2003 established the criteria and procedures to be adopted by an electric power distributor or licenser opting for the installation of metering equipment external to a consumer dwelling. The main points covered in this Resolution regarding the maintenance of the consumers’ rights and revenue protection, are:

  • Definition of external metering
  • Limitations for the external metering installation
  • Verification and approval of the meter readings
  • Lack of liability to the consumer for the custody of the metering equipment
  • Installation of the metering equipment at no cost to the consumer
  • Limitation to retro-act one billing cycle in the recovery of verified differences.

Due to the use of a different technology by Ampla and Coelce that did not have a visual display, and that did not conform to Article 4 of Aneel’s Resolution No. 258/2003, the regulatory agency opted to issue Authorisation Resolutions, principally because of the high energy loss rates and defaults in the project implementation areas.

Thus, the installation of such systems was authorised through Authorisation Resolutions No. 201 of 30 May 2005 and No. 383 of 26 December 2005, with the proviso that such Authorisations would be linked to the following requirements:

  • 5-day prior notification to the consumer about the change of meters
  • Authorisation to be of 24-month duration, from its publication date
  • Information on consumers’ daily consumption would be provided on their monthly bill
  • Availability of a free telephone service for consumers to obtain information on their electricity consumption
  • Report to Aneel, in the ninth and eighteenth months from the Resolution’s publication, on the external meter system development, focusing on the performance of the equipment and its reception by consumers, and
  • Evaluation of the resultant advantages and disadvantages.

It must be emphasised that the regulation relating to external metering is complementary to Resolution No. 456 of 29 November 2000, which provides the general conditions of electricity supply and which also must be complied with.

Among the main advantages arising from the implementation of external metering systems, both to consumers and distributors, the following can be mentioned:

  • Faster execution of meter reading
  • Reduction of energy theft and metering irregularities, thus decreasing loss rates
  • Reduction of operating costs of meter reading and disconnections and reconnections
  • Better and more rapid execution of the fiscalisation and inspection of metering equipment
  • Reduction of the risk of accidents associated with irregular and clandestine connections
  • Improvement in the quality of supply through the elimination or reduction of irregular and clandestine connections, as well as through the reduction of connection problems
  • Ease in the definition of connections and network use
  • Ease in registering and identifying the consumer dwelling status (connected, disconnected, self-reconnected or clandestine)
  • Reduction of cases of reading difficulties and estimated bills
  • Preservation of the privacy of consumers when carrying out readings, and
  • Preservation of the physical well-being of employees in performing their duties.

To a greater or lesser extent, all of the projects that have been carried out, or are in preparation, offer the above mentioned advantages. In the cases of use of electronic equipment, other advantages that can be highlighted include:

  • Automation and remote execution of some services
  • Monitoring of the quality of supply standards
  • Availability of storage of information to consumers and distributors
  • Refined monitoring of individual consumption profiles, and
  • Reduction of meter reading errors by readers.

Among the disadvantages the implementation of these projects generally encounters big resistance from consumers. Bearing in mind that the main motivation lies in the combating of losses, the projects are focused on areas with severe social problems and a large number of irregularities in the metering equipment. As such conflicts in these areas are common and, particularly when utility bills increase, public mistrust is stirred up over the metering system.

In spite of the initial resistance, after a period of maturation and familiarisation in the community there has been acceptance of, and frequently a preference for, the new system, because in addition to the above mentioned advantages external metering avoids incurring the cost to the consumer of assembly of the conventional metering standard, which averages between R$50 and R$150 (US$25 and US$75), depending on the standard required.

After almost seven years of the large-scale implementation of the first external metering systems, some challenges still have to be overcome in order for all the benefits to be derived from such projects.

Some of the main challenges are:

  • Project acceptance by consumers and identification of the benefits to society
  • Reliability in measurements and ease of corroboration, etc.
  • Reduction of the costs of metering equipment and systems
  • Conviction of the user population and decision makers on the benefits provided by the systems and on the need to reduce electricity loss levels
  • Improvement of the technical and commercial legislation in force.

External electronic metering was initially rejected by consumers in the areas of implementation. Studies carried out by concessionaires with the purpose of characterising hostile consumers verified that they felt themselves as ‘harmed’ by the new method of metering and that in most cases the ‘beneficiaries’ were in the fraud industry. In order to reverse this perception, the concessionaires have been using all the tools at their disposal to promote the benefits provided by the system to its users. Such actions include advertising as the main means of communication in addition to the bill, and the implementation of social programmes in communities and promotions to paying customers. The purpose is to inform customers of the advantages of adopting the electronic metering and, progressively to acquire their trust through a set of services that benefit them. Nevertheless such offers must be continually improved.

Measurement reliability is another challenge that must always be pursued. As a new technology, it is not possible to predict all the possible problems that may arise. Therefore, it is extremely important to undertake new trials and tests, and to exchange experiences with other countries that have implemented this technology, in order to corroborate the reliability and quality of the system.

Another point with a strong influence on the system development is the cost of the metering equipment, with most of it being imported. In most cases, the cost amounts to more than R$400/customer, and depending on the loss level, implementation may not be economically feasible. The quest for a reduction of costs is a big challenge indeed.

The conviction of the population and decision makers about the benefits provided by the implementation of such systems and the possibility of reducing loss levels is crucial for this technology’s consolidation. It is imperative that all consumers be aware that high loss levels cause an increase in energy tariffs.

Finally, in the case of new technologies and new measurement standards, the roles of the metrological and regulatory agencies are indispensable for the development of such systems. The technical and regulatory legislation should be such as to allow implementation of the external metering system in order to enable the combating of non-technical losses, and to seek the economic sustainability of concessions and tariff reductions.

External metering has proven to be one of the best and most universal solutions to combat energy losses in Brazil, but there is still a need at the technological, operational and regulatory levels to enable all the parties, including agents, energy consumers and energy distributors, to benefit from the gains to be derived from these projects.