By Satish Saini, HEXstream utility industry specialist

Our dependency on electrical power is growing rapidly. Demand across the globe is rising.  Electricity plays a significant role in the development of industry, public infrastructure and the overall GDP of country, but most utilities delivering that power are facing lots of challenges with sustainability, reliability and controlling costs.

The World Bank reports that:

• Electrical utilities’ current operating model is facing unprecedented challenges.
• Some 60% of utilities in developing countries are not financially sustainable and not able to cover their operating and debt-service costs, which jeapordizes their energy-transition and access goals.
• These financial and operational hurdles deter investors, preventing many utilities from critical investments in grid modernization and necessary upgrades to aging infrastructure. This also leads to an increased reliance on government subsidies and write-offs, eventually straining national budgets and diverting finances from other critical investments.
• Many utilities face acute challenges like high operating costs, greater transmission and distribution losses, lower reliability, underperformance of assets, inefficient meter-to-cash process and many more.
• Ineficiencies and power losses can eliminate up to 4% of the GDP in some countries.

The good news

We have technical solution to address these losses. We have posted earlier about utilities transmission and distribution losses (both technical and non-technical), including methodologies for accurately detecting/quantifying/reporting these losses (especially non-technical).

Non-technical losses or commercial losses that occur due to factors beyond technical issues with the grid, can be classified as:

—Electricity theft, unauthorized consumption of electricity

—Fraud, intentional misrepresentation or manipulation of energy usage and information

—Tampering with meters to inaccurately record consumption

—Inefficient “meter-to-cash” processes: loopholes, inefficiencies and problems in the end-to-end process of energy accounting and revenue collection from sale of energy to consumers, comprising the following activities cycle:

• Meter-reading process and relevant issues and loopholes
• Billing and invoicing process errors and issues, including unbilled revenue
• Payments and bill-collection process issues, including unpaid and unrealized revenue
• Investigation and enforcement process and KPIs for unbilled and unpaid revenue
• Revenue reporting and financial statements, anomalies and exceptions
• Proactive actions for the next billing cycles

In future installments in this series, we will dive deeper into non-technical losses, especially under the “meter-to-cash (M2C)” process inefficiencies and loopholes topic. The next segment will cover specific issues related to each activity under the full meter-to-cash cycle, including meter reading, billing and invoicing, payments and receipts with reflection on utility revenue and financial statements. And later segments will cover the relevant KPIs and steps to reduce M2C losses under each activity in a billing cycle by taking proactive steps with auditing, investigation and enforcement.

Click here to contact us to learn how an efficient “meter-to-cash” process can help your utility reduce unbilled and unpaid revenue to enhance your financial sustainability.