Cleve L. Freeman – Los Angeles, CA USA Energy Loss Reduction Programs & Profits, Rio de Janeiro, Brazil 11 – 13 August 2004

Background Information System Losses - a major operational challenge Electricity theft - profound impact on the bottom line Our focus – loss reduction programs in Latin America Non-technical losses - within a company’s control? 1. Poor Installations 2. Improper account set-up Non-technical losses - outside the company’s control? 1. Illegal connections 2. Defective equipment

The purpose of this exercise is to explore: Share knowledge and learn from each other Incite thought as well as controversy Discussion (the what-where-when-why-who & how) Viable usable solutions for successful programs

What Unauthorized Usage Where Residential - Commercial - Industrial When Right now, even as I speak Why Needy - Greedy - Ego -????? Who The Rich - The Poor - Government Officials - Businessmen How Install By-passes - Meter Tampering - Fraud - Errors, etc…

Factors that encourage electricity theft Social and economic conditions Unemployment breeds a high crime rate Ineffective Law Enforcement - low to no penalty Unsecured access to meter facilities Direct connects (no meters available) Dishonest field Investigators and contractors Deficient record keeping & weak audit procedures Unsealed meters

Energy Loss Reduction Program Purpose & Responsibilities SAFETY FIRST Prevention Detection Investigation Correction Restitution Prosecution

Seal and lock appropriate meter facilities Warning tags Public awareness Employee training Company policy PREVENTION “All employees are responsible for prevention”

Detection of Energy Theft Employees (field and office) Law Enforcement (Municipal code enforcers, etc) Other Utilities (electric, gas, water, phone, cable) General Public (neighbors, business owners, etc) “All employees are responsible for detection”

Energy Loss Reduction Program Create a written document of policy & procedures Energy Loss Reduction Program - support staff Clerical, investigators, billing dept, collections, metering & service dept Mission, definitions, laws, evidence chain, guidelines, contacts Revenue protection equipment ( Computers, digital cameras, vehicles, field tools, etc.) Attend Revenue Protection Conferences Latin America Revenue Protection Association, IURPA, etc. WHO - WHY - WHEN - WHERE - WHAT - HOW Identify target * research * take action

Energy Loss Reduction Programs (Revenue Protection) “ Key Participants ” Inform, provide solutions, statistical reports, bottom line-money Inform, train t detect theft, feedback, incentives, educate Inform, train to detect theft, feedback, incentives, educate Safety issues related to energy theft- (meetings: what to look for and who to call) Implement tariffs to support your recovery efforts Implement regulatory tariffs to support your recovery efforts Senior Senior Management Employees Public General Public Regulation Government Regulation Law Law Enforcement Make initial contact, educate, network, volunteer, cooperate

Solutions to combating energy theft Comprehensive Revenue Protection Program Social - Economical - Training - Marketing - Legal Technology (theft detectors, remote monitors, etc.) AMR * Computer Profiling * Pre-pay * Locking Seals Participate in Revenue Protection Conferences I nternational U tilities R evenue P rotection A ssociation S outh A merican U tility T heft A ssociation Sr. Mgmt. understanding the benefit: Safety & Revenue

SUMMARY Energy theft / non technical losses are costing utilities $$$ millions of dollars Everyone pays for energy theft and non technical losses: especially the honest customers! To combat energy theft & related non-technical losses: “Implement Energy Loss Reduction Programs” The five fundamental objectives are: PREVENT*DETECT*INVESTIGATE*CORRECT*RESTITUTION