Commercial Losses – The Low Hanging Fruit

Bambos Charalambous

Hydrocontrol Ltd, Cyprus

Accounting for Water

Water is either used

or

it is LOST!

The first step is to establish how much water is produced and how

much is being used2

Accurate and Comprehensive Metering ……. if you don’t MEASURE ……you don’t KNOW ……. you can’t CONTROL…..

Accurate measurement of:

‒ Water produced and/or imported/exported

‒ Water flow in and out of treatment plants

‒ Water flow in and out of storage reservoirs

‒ Water flow into network zones/districts

‒ Water usage by customers

Eliminate or minimise Authorised

Un-metered Consumption

3

Quantify NRW ComponentsBilled metered consumption

Billed unmetered consumption

Unbilled metered consumption

Unbilled unmetered consumption

Unauthorized consumption

Customer metering inaccuracies, billing and accounting error

Leakage on transmission and distribution mains

Leakage and overflows at reservoirs

Leakage on service connections up to metering point

System Input

Volume

Authorized Consumption

Physical Losses

Commercial Losses

Unbilled authorized

consumption

Billed authorized

consumption

Water Losses

Revenue Water

Non-Revenue

Water

Only by quantifying NRW and its components, calculating appropriate performance indicators, and turning volumes of lost water into monetary

values, can the NRW situation be properly understood and the required actions taken.

4

Control of Commercial LossesMeter under-registration:

‒ Improve meter accuracy‒ Volumetric meters‒ Certified meter test bench

Meter reading errors:

‒ Hand-held devices‒ Change meter readers’ routes‒ Check zero/low consumption

Accounting errors:

‒ Billing software‒ Threshold alarms

Water theft:

‒ Theft from hydrants‒ Meter by-passes‒ Tampering with meters‒ Unauthorised connections

Commercial Losses=

Loss of Revenue(valued at retail billing rates) 5

Managing the Commercial Cycle

Scope of Measures to Address the Issues

Meter Installation and Testing

Meter Reading

Data Entry and Billing

Water Theft

Frequent Issues identified

-Size and type

-Under-registration

-Ageing

-Blocked

-Access to meter

-Real vs. fake reading

-Quality of data

-Estimation rules

-Control mechanisms

-Illegal connection

-Meter manipulation

-Theft from fire hydrants

-Installation practices

-Customer use profiling

-Higher accuracy meters

-AMR

-PDA-tracked real-time readings

-Daily schedules

-Regular field checks

-Implement estimation rules

-Exception handling process

-Regular surveys

-Enlist the help of users & civil society

-Create enabling environment, “educate” users

6

Meter Installation and Testing ‒ The “revenue meter” is the link

between network operations and commercial / customer service functions

‒ Understanding consumption patterns: demand profiling as a practical approach

‒ Meter under-registration: how big risk is it & how to tackle it – higher-class meters, combination meters, downsizing

‒ Meter testing: mandatory requirements vs. sample-based best practices

Example of consumption profiling as a tool to assess flow patterns prior to

meter sizing and type selection

7

Meter Reading

‒ Practical problems:

Access to customer meters

Control on meter readers

‒ AMR/AMI: cost-benefit analysis

‒ Suggested AMR practicality: define high-consumption users and apply AMR to these as a start

‒ PDA-based tracking, GPS routes and other tools

8

Data Entry and Billing‒ Evolution of billing systems over the last 10-15 years – cheaper, lighter,

cloud-based systems

‒ Data Quality Assurance

‒ Revenue assurance mechanisms in the area of billing: daily transaction reports

‒ Variance reports

‒ Processing of data and analysis through observation codes

TYPICAL OBSERVATION CODES (list is not exhaustive)

- Real reading- No access (sub-categories can be provided)- Broken meter- Flooded chamber- Self-reading by customerImportant: it is a good practice not to have the category “other” as it may encourage meter readers to use it too often 9

Water Theft‒ Regular visual inspections for irregularities

‒ Look for flags, anomalies in billing records

‒ Comparison of consumption to average values

10

Pay Special Attention to Large Customers

– Big commercial enterprises to be inspected regularly for water pilferage

– Check consumption monthly to detect anomalies

– In suspicious cases: establish a temporary DMA and measure for a few days

11

Interventions to reduce Commecrial LossesIntervention Area Action – Impact

Unmetered

customers

Install meters – Reduction in commercial losses and likely

system input volume (SIV)

Customer

database

Perform customer survey - Improve customer data base and

billing records

Unauthorized useFind and legalize / disconnect unauthorized users -

Reduction in commercial losses and possibly in SIV

Malfunction

customer meters

Replace malfunctioning customer meters - Reduction in

commercial losses with a corresponding increase in billing

Billing errorsCheck meter readings for errors – Reduction in commercial

losses / increase in billing

Large customersReplace meters with high accuracy smart meters - Reduction in

commercial losses / increase in billing

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Costing of Actions – Example

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Cost – Benefit (Example)

Intervention Estimated Cost (USD)

Estimated Benefit

(USD/year)

Pay-back Break even (months)

Unmetered Customers

841,750 307,240 33

Customer database

176,325 16,750 126

Unauthorised use 451,042 498,444 11

Malfunction customer meters

252,450 941,443 3

Billing errors 31,000 8,280 45

Large customers 58,000 59,925 12

14

CONTACT DETAILS:

Name : Bambos Charalambous

Organization : Hydrocontrol Ltd, www.hydrocontrolltd.com

E-mail : bcharalambous@cytanet.com.cy

Phone/fax : Office: +357 25581373Cell: +357 99612109

THANK YOU !MULTUMESC!

http://www.hydrocontrolltd.com/mailto:bcharalambous@cytanet.com.cy