1. Itzick Michaeli Revenue Protection Manager Israel Electric Corporation Itzick Michaeli Revenue Protection Manager Israel Electric Corporation Joint Conference Tucson Arizona 1-3 September 2009 “Revenue Protection”: Are we winning?

2. Overview of Israel Electric Corp. status Overview of IEC RP performance Tamper and bypass challenges in hostile territories Common tamper & theft cases IEC security department operations – videos Innovations Are we winning ? Questions Revenue Protection: Are we winning ? 1

3. customer base: 2.4 million customers Total demand for electricity in 2008 : 50,161 Gwh Israel electric Company 2

4. Legal Framework 70-year concession expired March 1996 New Electricity Law provides for system of licenses – expired 2006 postponed to 2007-8-9-10… Israel Electric was granted licenses for transmission, distribution and generation Government target is 20% of power to be purchased from independent power producers (IPPs) Present IPP installed capacity: 0.7% 3

5. 4 Current IEC Metering system status : 1200 AMR Meters deployed Around the country 120 AMR meters 6,000  2011 for annual usage of more than 500K KWH 26,000  ???? 2,400,000  ????

6. Israel Electric Revenue Protection Deployment Marketing Division Manager IEC Revenue Protection Manager RP Team Leader Jerusalem District RP Team Leader Northern District RP Team Leader Tel-Aviv District RP Team Leader Southern District RP Team Leader Haifa District RP teams in 17 Regional Service offices under the Districts IEC total RP Personnel 62 IEC total RP Personnel 62 2.4 million customers 20 RP trained Metering technicians 20 RP trained Metering technicians + 5

7. 2004 Total revenues returned Total revenues returned 8 2008 Estimated Annual Loss 40 – 50 $ Million Estimated Annual Loss 40 – 50 $ Million 6

8. Tamper and bypass challenges in hostile territories Tamper and bypass challenges in hostile territories Bedouin tribes Palestinian towns 7

9. Yata village (Near Jerusalem) Palestinian Authority Territory 22 KV Grid bypass Pirate 22 KV breaker Pirate 22 KV feeding cables 8

10. Palestinian Authority Electricity Theft On a Huge Scale Palestinian Authority Electricity Theft On a Huge Scale Disconnecting Register conductors Check Point Tampering with the connection size Turns the metering cabinet into an oven And demands constant cooling 9

11. $ 12,000,000 value of lost revenues returned from checked villages & towns Many more al villages & towns to check and re-bill 30% Monthly increase in revenues from villages & towns already checked 10

12. Theft of service Bedouin towns Southern Israel 49 11

13. Magnitude Of the Bedouin problem Population ~ 200,000 doubles every 13 years 60% ages 0 – 18 50,000 unauthorized buildings 12

14. Theft of service Illegal Bedouin settlement Jerusalem Mountains 13

15. Common tamper & theft cases Meter Meter sentry 14

16. IEC National Security Unit Electricity theft contractors Employees involvement Our secret weapon - Sting operations 15

17. 16 Fixing the meter

18. 17 Hot wire

19. 59 18 Tampering with the meter coils Tampering with the meter coils

20. The Misplaced Meters Case The Misplaced Meters Case 19

21. Innovations 20

22. Online tamper suspicion reporting 21

23. Reporting employee details RP team leader details Tamper/Bypass details Voice memo 22

24. Check meters 63 23

25. 24

26. Involving the Police ? Involving the Police ? 64 25

27. Involving the Police ? 64 Yes, we can try !! Operation - “Pick up the glove” 26

28. Law & Order Does the system work ? 27

29. Law & Order 28 Where is the Problem ? Ineffective legislation Conviction rates for electricity related offences are low (very few complaints mature and go to court) Penalties are either insignificant or inappropriate  Lack of awareness amongst public

30. Law & Order What are we going to do about it ? Analysis of current legislation Compare to the Western World best practice Identify gaps within current legislature Determine the ideal Legislation 29

31. Law & Order What are we going to do about it ? Gain industry and governmental support Adoption of a legislative framework which is supportive of prosecution of offenders Next : Changes are required within the utility & the Judicial system to implement legislation supportive 30

32. Training judges THE INSTITUTE OF ADVANCED JUDICIAL STUDIES, Jerusalem, Israel 31

33. Are We Winning ? A wise Chinese once said: When the wind direction switches, some build walls and others build wind mills 32

34. Reinforced Revenue Protection Operations Cost V Prevention of Future Losses For a 3 years project Future revenues Recovered revenues Predicted net benefit 33

35. www.israel-electric.co.il 72 THANKS FOR YOUR ATTENTION Itzick Michaeli ISRAEL ELECTRIC michaeli@iec.co.il Questions ? www.iurpa.org

36. Gil August 2004 Gil August 2004