1. 2016 Benchmarking Insights Conference Boulder, CO
Revenue Protection
2016 Benchmarking
Insights Conference
Boulder, CO
This material has been optimized for the Insights Conference audience. To get the most of this material and hear a recording of this presentation go to our
and find the table for CS Insights, then click on the ”Revenue Protection” link.

2. Agenda Overview Coverage of the Study for Revenue Protection
2016 Key Findings/ Points of Emphasis
Performance Profiles
Cost/ Service
2016 Benchmarking Results
Functional-specific findings (Cost, Volume, Practices)
Areas of Focus and Opportunity

3. Overview

4. 2016 CS Benchmark Questionnaire structure
Field Service
Change of Account
Billing Field Orders (meter investigations)
Credit Field Orders
Order Management
Customer Contact
Contact Center
Local Office
Self Service
Contractors
Credit Inbound calls
Revenue Management
Credit Office and Outbound calls
Credit Field and Inbound Contact Policies
Revenue Protection: Office and Field
Back Office
Billing
Billing Field Policies
Payment Processing
Meter Reading
Manual
Mobile AMR
Fixed Network AMI
CS Support and CS IT
Employees: Safety, Staffing
Customer: Customer Satisfaction, First Contact Resolution, Customer Experience, Key Account Management,
Energy Efficiency , Outage Communications
Areas excluded:
Meter Change-out

5. We Track these Elements for the following Categories of Revenue Loss
Energy Theft and Diversion (External/Customer)
Energy theft (aka diversion, unauthorized usage): 1) Meter tampering; 2) Meter bypass; 3) unauthorized attachment.
Fraud (aka identity theft): Field investigation related to fraudulent names, passing accounts, etc. to avoid bills.
Inactive Accounts and Other Non-Theft (Internal/Company controls)
Field investigation and back-billing for 1) usage on unmetered accounts, 2) usage on inactive accounts; 3) Meter errors (stopped or broken); 4) Not in system; unknown user; 5) Crossed meters
For purposes of this survey:
Do not include meter-related field work performed by Field Service or Meter Shops
Do not include special contact center programs to prevent identify theft or fraud at account initiation
Do not include routine billing investigations

6. Key Findings / Points Of Emphasis
Volume
The number of cases worked is up substantially over last year, with AMI enabling low-cost, effective efforts
Cost
Cost (spending) increased marginally this year
Service (Recovery)
4 companies can demonstrate ability to confirm, bill and recover on individual cases.
Use of AMI data is a growing factor in revenue protection success.

7. Performance Profiles

8. 89% of the costs are labor-related
Cost comparison
2016 costs are 3% of Total
89% of the costs are labor-related
Total 2016 CS Cost Revenue Protection Excluding Write-offs Community Mean = $1.02
Community Composite
Community Composite
Costs are per Accounts * Commodity

9. Revenue Protection profile
Revenue protection activity is up from last year, despite lower staffing.
2015YE
2014YE
Mean Q1 Q2 Q3
Bars
Cost
Revenue Protection Cost per Account * Commodity
$1.02
$0.46
$0.85
$1.06 15
$0.98
$0.33
$0.75
$1.01
Internal Measures
Revenue protection cases worked per 100,000 Accounts * Commodity
1,221
2,341
410
121 18
884
1,605
351
173 16
Revenue protection cases worked per 100,000 Accounts * Commodity - Internal Issues
838
693
287
144 10
535
271
147 11
Revenue protection cases worked per 100,000 Accounts * Commodity - Theft
668
688
348 53
527
640
336 91
Effectiveness
Revenue Billed per Revenue Protection Expense
1.66
2.07
1.40
0.78
2.04
2.21
1.55
0.82
Revenue Collected per Revenue Protection Expense
1.41
2.00
1.30
0.71 5
0.90
1.35
0.74
0.42 8
Revenue Protection FTEs per 100,000 Accounts * Commodity
1.15
0.43
0.55
1.26
1.31
0.45
0.79
1.93 14

10. REVENUE PROTECTION Spending
Mean Cost is $1.02
Utilities have invested more in revenue protection at all levels.
Mean
$1.02
Quartile 1
$0.48
Quartile 2:
$0.85
Quartile 3:
$1.06
RP Page 3 - FL5

11. 2016 Benchmarking Results

12. REVENUE PROTECTION Staffing
There is a 0.9 FTE difference between Q1 and Q3
The high variability in resource usage stabilized in the last year
Mean
1.2
Quartile 1
0.4
Quartile 2:
0.6
Quartile 3:
1.3
SF Page 72 – SF55

13. Top 3 SOURCES OF REVENUE PROTECTION CASES
While FSRs and Meter Readers remain the top two sources, the third highest, and fastest growing, is AMI signals
Legends 21 22 23 28 29 30 31 32 33 34 36 40 41 42 43 44 49 50 51
Customers ♦
Meter signals
AMI system
Meter readers
3rd party vendor
FSRs
Data analysis
Billing department
Revenue Assurance group billing investigations
Other
RP Page 35– RP60

14. Number of Cases Worked by Type
Companies worked more cases of all types in the past year, with a significant reversal of a multi-year decline in cases worked.
2015 Cases Worked by Type
per 100K Accts * Commodity
5 Year Trend in Cases Worked by Type per 100K Accts * Commodity
Mean
1,221
Quartile 1
2,341
Quartile 2:
410
Quartile 3:
121
RP Page 12 – RP15

15. REVENUE PROTECTION CASES WORKED
Companies who track both types are working roughly similar amounts of company (internally controlled) and customer (theft) cases.
Revenue protection cases worked per 100,000 Accounts * Commodity
External/ Customer (Theft)
Internal/Company Controls
Note that companies have made very different choices in how much resource to devote to revenue protection, and the number of cases pursued.
Mean
668
Quartile 1
688
Quartile 2:
348
Quartile 3: 53
Mean
838
Quartile 1
693
Quartile 2:
287
Quartile 3:
144
RP Page 14– RP15 (breakout)
RP Page 13 – RP15 (breakout)

16. Cost Versus Volume
There is an inverse relationship between volume and cost per case. The companies who work high volumes of cases, with one exception, are among the lowest cost per case.
2015 Cases Worked by Type
per 100K Accts * Commodity
Cost Per Case Reported
Mean
$278.27
Quartile 1
$73.71
Quartile 2:
$112.77
Quartile 3:
$439.92
Mean
1,221
Quartile 1
2,341
Quartile 2:
410
Quartile 3:
121
RP Page 12 – RP15

17. Tracking OF THEFT CASES
Three companies were able to track theft cases all the way from reporting through collection from customers, and a fourth can track all stages from investigation through collections.
RP pages 23-27, RP35

18. Tracking Theft Case Activities
There is a wide variation in the ability to track theft cases all the way through to collections. Most companies cannot track the $ collected.
Electric
Gas
RP pages 23-27, RP35

19. Tracking of Non-Theft Cases
The same three companies were able to track non-theft cases all the way from reporting through collection from customers.
Company
Reported
Investigated
Confirmed
Billed
Collected 21 X 22 28 31 33 34 43 44
RP pages 28-31, RP40

20. Revenue collected To Expense Ratio
For those companies able to report revenue, two - 21 and 31 - exceed the expense to collect, two others are below
Working to collect revenue from internally controllable sources (e.g. UOI, stopped meters, crossed meters) appears to be a worthwhile investment based on this set of reporting companies
Matching revenue collected has been challenging
Mean
1.41
Quartile 1
2.00
Quartile 2:
1.30
Quartile 3:
0.71
RP Page 6 – RP25+RP30 divided by FL5

21. Focus of Revenue Protection Efforts
The majority (13 of 19) of utilities work on both internal and customer- driven revenue losses.
Only 32% (6 of 19) companies note that they focus all their revenue protection efforts on theft, but 100% devote some effort to customer theft.
None focus entirely on internal revenue loss.
Companies 21 22 23 28 29 30 31 32 33 34 36 40 41 42 43 44 49 50 51
Fraud ♦
68.%
Usage on inactive meters
74%
Meter tampering
100%
Tap ahead of meter
84%
Stopped meters
68%
Theft of energy
95%
Theft of assets
16%
Crossed meters
42%
Incorrect meter constant
47%
Defective meters
Other
21%
RP Pages 9, 10 – RP5, RP10

22. TOP METHODS FOR IDENTIFYING CASES AND FACTORS MAKING THEM SUCCESSFUL: THEFT
Field Investigation remains the most-used activity, with more cost-effective AMI meters and Data Analytics growing fast.
RP Page 37– RP65.1

23. TOP METHODS FOR IDENTIFYING CASES AND FACTORS MAKING THEM SUCCESSFUL: Non-Theft Cases
Non-theft cases are investigated quite differently from theft – with less work in the field and more office-based analysis
RP Page 38– RP65.2

24. Practices Used to Prevent Theft or Fraud
The key practices highlighted include rigorous sealing/locking programs, and training employees to identify theft.
Locks and Seals
11 reporting companies listed locking and sealing programs
Employee Training and Awareness
10 reporting companies identified training of employees in identifying theft and fraud as their key practice.
Other Practices Noted
Field worker incentives
Thermal imaging
Performance indicators
RP Page 39– RP75

25. USE OF DATA MINING AND ANALYTICS FROM ADVANCED METERS
Essentially all companies with significant AMI are using the meters to support data analysis, with ever more sophisticated tools. All but 2 report using the data to better target investigation efforts, more quickly.
RP Page 48 – RP120
RP page 52, -- RP140

26. Prosecution of Energy Thieves
Utilities are more aggressive about prosecution than in the past, with only two companies stating they don’t prosecute ordinarily.
RP Page 47 – RP115

27. Fun Facts About Revenue Protection
The average utility is allowed to back-bill for 3.2 x as many months for theft as for internal errors.
Theft cases can be billed for a range of 6 months to unlimited, with an average of 62 months
Non-theft cases can be billed for a range of 3 to 48 months, with an average of 17 months
Half of the companies track the turn-around time to the initial field visit for investigation of theft and non-theft cases.
9 companies report that they track, 9 say they do not
Of the 12 companies who reported a value, the mean time is 6 days
Organizational location for analysis of advanced meter data has not yet become consistent across companies
5 companies with Revenue Protection leading the efforts
5 companies with a dedicated team in the AMI organization
2 companies with internal meter data analytics groups
RP Page 34 – RP50
RP Page 41, 43 – RP85, RP 95
Rp Page 49 – RP 125

28. areas of Focus and Opportunity

29. areas of Focus and Opportunity
Volume
Understand the volume of work being done in both Energy Theft (External/Customer) and Inactive Accounts and Other Non-Theft (Internal/Company controls) areas
Are there opportunities to focus on internally controllable (e.g. UOI) loss volumes? (Companies able to report show benefits in this area)
Cost
Activity Cost is less important than finding and preventing revenue loss
Service
Manage the efficiency and effectiveness of your labor and technology investment
As AMI and data analytics grow, are you leveraging all of the Rev Pro opportunities made possible through using and learning from these technologies?

30. Thank You for Your Input and Participation!
Your Presenters
Ken Buckstaff
Debi Cook
Gene Dimitrov
Rob Earle
About 1QC
First Quartile Consulting is a utility-focused consultancy providing a full range of consulting services including continuous process improvement, change management, benchmarking and more. You can count on a proven process that assesses and optimizes your resources, processes, leadership management and technology to align your business needs with your customer’s needs.
Visit us at | Follow our updates on LinkedIn