Transcript Revenue Protection

Power Transmission and Distribution
Metering
“Revenue Protection Services
- A Business”
David Bown
Product Manager
Revenue Services
Siemens Metering UK
IURPA Conference June 2002
Revenue Protection Services
Copyright by Siemens Metering
19 June 2002
Power Transmission and Distribution
Metering
Revenue Protection - from a department to a
business
• The role of the Revenue Protection Service has had to
adapt to survive in the ever-changing UK energy
market.
• Transformed from being a department within a
nationalised company to a successful business.
Revenue Protection Services
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Power Transmission and Distribution
Metering
Background
• Eastern Electricity
• Largest Electricity company in England
-
3.2 Million customers
-
Covers North London and East Anglia
Revenue Protection Services
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Power Transmission and Distribution
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Siemens Metering (Siemens UK)
• Siemens Metering (division of Siemens UK)
• Part of Siemens AG
• 480,000 employees world-wide
Revenue Protection Services
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19 June 2002
Power
PowerTransmission
Transmission and
and Distribution
Distribution
Metering
Metering
Turnover ~£ 50 Bio.
SIEMENS
Employees ~484000
Energy
(PTD , PG)
Industry
Components
Lighting
Siemen s Metering Global:
PTD -
Information &
Communications Transportation
Household
Employees 6 000
Finance
Siemen s UK :
Power Transmission and Distribution
R&D
Employees
15 000
PG - Power Generation
PLN Visit - 22/23.04.02
Revenue Protection Services
Healthcare
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Power Transmission and Distribution
Siemens Metering UK - Locations
Cash Transaction
Processing ~ Newcastle
Backed by :
Metering
Energy Metering & Data
Management ~ Midlands
Siemens Metering World-wide
Access to technology & sales channels
Industrial & Commercial
Data Management
Device Manufacturing
Oldham
Siemens U.K.
Access to ‘the Siemens Federation’
Energy Metering & Data
Management ~East Anglia
Sales & Marketing,
Business Development
Telford
2000 Employees, enabling a national, independent
Energy Management Service
Revenue Protection Services
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Power Transmission and Distribution
Metering
Main Clients of Siemens RPS
• EPN
• Powergen
• TXU Energi
Revenue Protection Services
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Power Transmission and Distribution
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Evolution of Revenue Protection in the UK
• Late 1970’s - industry became aware of
increasing losses due to meter interference
- “illegal abstraction of electricity”
• Meter tampering teams set-up
• Anti - Meter tampering teams
• Revenue Protection Units
Revenue Protection Services
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19 June 2002
Power Transmission and Distribution
UK electricity market - 1993 - 2000
Ownership Changes
REC footprint
Scottish Hydro
Distribution
Supply
Metering
Metering
Scottish and Southern (Merger)
Scottish Power
North
(United
Utilities)
North
West
Water
TXU West Water
Norweb
Northern Electric
Cal Energy
Yorkshire Electric
AEPInnogy
+ CSW
Manweb
Scottish Power
Midlands
Innogy
NPower
East Midlands
Eastern
Dominion
Resources Siemens
PowerGen
TXU
London Electricity
Swalec
Southern Electric
GPU + Cinergy
GPU + Cinergy
24
Eastern
Energy
TXU
Hanson
Entergy
EDF
EDF
Seven
British
EnergyWelsh Water
Welsh(Hyder)
Water
WPD (Hyder)
S&SE
EDF
Scottish and Southern (Merger)
Seeboard
SWEB
Siemens
TXU
CSW
CSW
+ AEP
Invensys
P&PL
+Electric
Southern
Electric
(USA)
Southern
Electric
(USA)
P&PL
+ Southern
(USA)
EDF
NIE
Revenue Protection Services
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Power Transmission and Distribution
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Supplier Hub Principle
Customers
Supplier
Distributor
Meter Operator
Data Collector/Aggregator
Revenue Protection Services
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Power Transmission and Distribution
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How the UK Electricity Market Works
• Revenue and costs are determined on meter
readings
• Suppliers - Pay energy/use of system costs
• Industry regulated by OFGEM
• Energywatch - protects rights of customers
• Department of Trade and Industry
Revenue Protection Services
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Power Transmission and Distribution
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The Challenge for Revenue Protection
Revenue Protection Services
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Power Transmission and Distribution
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Challenge One - Business Separation
• RPS Needs: -
- Information
- Local Knowledge
- Contacts
- Expertise
Revenue Protection Services
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Power Transmission and Distribution
Challenge One - Business Separation
Metering
• Effects of business separation on RP: • Data Collectors and meter operators report
direct to suppliers
• Paid to read meters/complete specific jobs
• No incentive to report meter interference
• Suppliers avoid confrontation and complaints
• RP viewed as a cost without a tangible benefit
Revenue Protection Services
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Power Transmission and Distribution
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Challenge Two - The Settlements System
•
Conflict between Incentive and Responsibility
- Supplier has responsibility for revenue
protection
- Distributor loses most if theft undetected
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Power Transmission and Distribution
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Challenge Two - The Settlements System
How The UK Settlement System Works



The Supplier pays energy costs to generating companies based
on metered consumption
The Supplier pays distribution costs to the
host Distributor based on metered consumption
Supply costs are relatively fixed per customer
The Suppliers margin is what is left over when
the bill is paid
Revenue Protection Services
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Power Transmission and Distribution
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Challenge Two - The Settlements System
What happens when a meter is prevented from
recording energy consumed?


The ‘customer’ still takes energy
The generator still has to be paid but the Supplier only
pays on what the meter says

The energy cost shortfall is picked up by other Suppliers

The Distributor is only paid on what the meter says

The Distributor loses Use of System income
Revenue Protection Services
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Power Transmission and Distribution
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ChallengeTwo - The Settlements System
What happens when theft is detected?



The Supplier has to recompense other Suppliers who have
picked up the lost energy costs
The Supplier has to pay the Distributor for the correct UoS
charges
The Supplier has to meet these commitments regardless of
whether they are able to recover their losses from the customer
Revenue Protection Services
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Power Transmission and Distribution
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Challenge Three - Commercial Reality
• Change in culture
• Commercial Focus
• Relationships managed by contracts
• Cost cut - prices lower
• Consumers can change suppliers every 28
days
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Consequences of change
• Licence Conditions
- No effective auditing or measurement
- Suppliers only motivated to do what is
necessary to protect their licence
• Negative reaction by some RP staff
- Believe there will only be change once losses get
out of control or someone dies as a result of meter
interference
Revenue Protection Services
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Power Transmission and Distribution
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The way forward for Revenue Protection
• Identify customers
• Market our service
• Tailor service to meet customer needs
• Identified distributor as main customer
• Helped distributor put in place a mechanism
for charging suppliers
• Helped distributor to implement transactional
charges
Revenue Protection Services
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Reactions to RP / Distributor Approach
• Supplier questioned Regulator
• Regulator supported the principle of Supplier
liability
• Distribution business was pleased
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Power Transmission and Distribution
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Contract with Distribution
• RPS paid for : -
- Cases of confirmed meter interference dealt
with
- Each kWh of unrecorded electricity identified
Revenue Protection Services
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Power Transmission and Distribution
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Suppliers Problems
• Liable to pay regardless of whether they are
able to recover their loss
• Loss of expertise
• RPS Response • Create agency concept
- e.g. banking and travel agents
Revenue Protection Services
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Power Transmission and Distribution
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Case Study - Working for TXU Energi
• Agreed a contract to fully manage their Revenue
Protection process
• Look after their licence obligations
• Protect their commercial interests
• Communicate directly with their customers
• Wrote and implemented their RP policy
• This agreement allows an end-to-end solution to still
operate
Revenue Protection Services
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Power Transmission and Distribution
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Business Growth and Development
•
•
•
•
•
Metering Errors
House Keeping failures
Pre-payment meter interrogations
Vacant premises
Untraded sites
Revenue Protection
Revenue Services
Debt Recovery
Revenue Protection Services
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Changes in Employment Culture
• RP Staff are: -
- Incentivised
- Involved in training and presentations
- Connected to company e-mail in their homes
- Involved in team build events
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…..But not everything is perfect
• Not enough offenders are prosecuted
• There is unease about commercialising RP
• Our customers do not take enough interest in
protecting their own interests
• Regulator doesn’t help in the way they treat
complaints
Revenue Protection Services
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Power Transmission and Distribution
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…..But not everything is perfect
• We are vulnerable to: -
- Changes in the settlement system
- Political influence/decision makers
- The UKRPA represents our interest and is
listened to and respected by those in power
Revenue Protection Services
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Power Transmission and Distribution
Metering
“Revenue Protection Services - A Business”
Questions and Answers
Revenue Protection Services
Copyright by Siemens Metering
19 June 2002