Case Study on Loss Manegement in Brazilian Utilities
Case Study on Loss Manegement in Brazilian Utilities Marcos Aurélio Madureira da Silva Corporate Commercial Director Sistema Cataguazes-Leopoldina madureira@cataguazes. com. br
Agenda Ø Brazilian electricity market overview Ø NTLs concepts Ø SCL’s losses fighting history Ø New challenges to reduce NTLs Ø Revenue Intelligence case study in SCL
BRAZIL OVERVIEW Introdução o motivo da discussão 8, 500, 000 SQUARE KILOMETERS Ø Identifique-se Ø Informe 62 ELECTRIC UTILITIES AROUND 180 MILLION INHABITANTS AROUND 53 MILLION CUSTOMERS
Brazil – Electrical Sector Ø Electrical Companys o o o Ø Generation (almost all State owned) Trasmission(almost all state owned) Distribuition (almost all privatized) Regulatory and Control o o ANEEL – Regulatory Agency ONS – G and T • Independent System Operator o CCCE – Energy Trading • Contracts • Energy Bids • Spot Market o Free Customers
Sistema Cataguazes- Leopoldina 1905 - 2005 Área: 1. 789 Km 2 Costumers : 137 thousand Inhabitants: 450 mil Sistema Cataguazes Market Share 2005 Northeast of Brazil SAELPA 0, 8% of Southeast 9, 0% of Northeast 2, 0% of Brasil Área: 54. 595 Km 2 Costumers : 861 thousand Inhabitants: : 3. 000 mil Brazil Área: 17. 419 Km 2 Costumers : 455 thousand Inhabitants: : 1. 800 mil Southeast of Brazil Área: 17. 331 Km 2 Costumers : 390 thousand Inhabitants: : 1. 200 mil REF: 2005 mar
Sistema Cataguazes- Leopoldina 1905 - 2005 REVENUE PROTECTION IS PART OF A PERMANENT FINANCIAL POLICY
Cash-flow consequences of NTLs : Vicious cycle Reduce EBITDA Reduce CAPEX Reduce Investment Capacity and Operational Efficiency NTLs reduce EVA EBITDA - Earnings Before Interest, Tax, Depreciation and Amortization; EVA - Economic Value Added; CAPEX - CAPital EXpenditures.
SCL –Corporate Management Process GOALS BOD NEGOTIATION REPORTS MONITORING BUSINESS MANAGEMENT UNIT PROJECTS NEGOTIATION ACTION PLANS RELPORTS MONITORING DEPT. MANAGER NEGOTIATION REPORTS MONITORING OPERATOR
SCL - Commercial Losses Main Activities and Results Ø Main Activities o o o Ø Field Inspections Fix Irregular connections Fix Damaged Meters Fix metering instalations Fix bad registers Results o +50% reduction of commercial losses since 2001 until 2004 • 9% 2001 December • 4, 3% 2004 December
Challenge : Reduce NTLs Ø PROFITABILY x AFFORDABLE SUPPLY RATES o o o Regulators push utilities to decrease commercial losses (refusing to transfer NTLs to the tariffs) Shareholders push top-management to achieve positive EVA (profits greater than cost of capital) Government, Regulators and Users push utilities increase quality of energy while reducing rates
Challenge : How to Reduce NTLs Ø Lack of human and financial resources to perform all necessary actions o o o Field investigation, service orders to reduce fraud / theft / commercial losses Debt negotiation, consumer disconnection (where permited by law) to reduce receivables losses Internal process optimization and auditing to reduce administrative losses
Challenge : Reduce NTLs Ø There are new distribution solutions
Distribution solutions
Distribution solutions
Meters installed on the pole
Challenge : Reduce NTLs Ø There are new distribution solutions o But they are expensive… As time goes by, frauds has became more sophisticated Ø Criminal organizations selling “energy theft services” Ø Endless mouse-cat game Ø
New Challenges Ø We need to increase the search frauds process efficiency o o o Ø How much ? Where? How kind? To optimize NTLs reducing process o o What are the priorities? How the actions must be doing? What is the adequated solution? How is the optimal mix (New installations X Inspections)
Data analyses o We have a lot of data • • • o o o Billing systems Meter systems Electrical Operation Measurement Systems Distribuition Electrical System Manegement Costumer Care system Irregularities detected by meter readers Those data are usually separated We need to put them together We have to think, plan and act with intelligence
Loss Reduction Strategies employed Which technologies should be employed, in what consumers ? Ø Limited financial resources it is necessary to optimize the resources Ø Universe of consumers AMR with PLC Anti-theft cables, meters and seals Load balance up to transformers Change of pattern for input and distribution Which consumers should be inspected ?
Graphs for productivity of inspections Energy Recovered + Aggregated Optimal Point for energy / cost Increase of energy with same cost Productivity with RI Productivity without RI Cost
SAELPA – Revenue Intelligence results Ø Recovered o o o Energy (MWh. R) MWh. R (May/03 -Dec/03) 7. 591 before RI MWh. R (May/04 -Dec/04) 12. 680 after RI Increasing 67, 05% Ø Aggregated o o o Energy (MWh. A) MWh. A per Inspection 0, 028 MWh/month 0, 048 MWh/month Increasing 71%
Revenue Intelligence - SAELPA Company SAELPA Annual sales 2. 280 GWh Recovered energy annual increasing Aggregated energy annual increasing Total energy annual increasing % of increasing in relation to annual sales Annual estimative of required energy reduction 7, 63 GWh 11, 98 GWh 19, 61 GWh 0, 86% 3, 6 GWh
Summary of Results in SCL-SAELPA Ø Results of RI in SCL (one year after implementation): o o o Find NTL, uncover unknown NTL Productivity increased (energy recoveried / inspections) more then 67%, forecasting 0, 86% annual increasing in total revenue Increased efficiency of investigation team up to 36% (average); some rules already achieved 73% efficiency Creation of a NTL Reduction Intelligence Dept. to reduce NTL and keep it low Auditable results and statistics to demonstrate benefits to Management and Stockholders.
Marcos Aurélio Madureira da Silva Corporate Commercial Director madureira@cataguazes. com. br 55 -83 -2106 -7002 www. scl. com. br
- Slides: 25