At UMEME, Uganda’s national electricity distribution company, project manager Robert Mubiru is looking through bid submissions for an advanced metering infrastructure (AMI) system that was recently put out to tender.
The disco, which serves 600,000 customers, has already tested a small-scale automated meter reading (AMR) pilot in early 2011.
The AMR was deployed with the express intention of reducing UMEME’s 40 per cent losses and targeted at the customer group that is significantly adding to non-technical losses – large power users.
While only estimated at 3.75 per cent of the customer base, large power users account for 65 per cent of sales and revenue, which offered a “good incentive” “to tighten the noose around our top customers who aren’t paying their bills or tampering with their meter”, said Mr Mubiru.
We asked Mubiru to talk us through UMEME’s journey to smart metering.
Were revenue losses the sole reason for introducing two-way meter technology?
Mubiru: “Not solely – we also wanted to improve the efficiency of our revenue cycle and refurbish the dilapidated network – but when your losses stand at 40 per cent, you realise you have to do something and fast.
Our response was to test an AMR system – we installed 600 units split between boundary meters, feeder meters and customer meters and trialled them from 2011 until 2012.
We found that the technology was useful and did yield benefits in terms of reducing losses. We just beat the loss-reduction target set by the electricity regulator during 2005-2012 of 28 per cent. We came in at 27.3 per cent.
The AMR also shortened the time for billing large power users but we realised our installations were still exposed to tampering and because the AMR software was run by an off-shore provider, it was taking 60 per cent longer for communications to travel between the meter and our servers. We therefore couldn’t act quick enough when we detected malfeasance.”
Why are large power users in Uganda contributing so much to non-technical losses?
Mubiru: “In Uganda, the professionalism of large power users varies greatly.
We have the likes of cement manufacturer Lafarge, which sets international standards and will abide by the rules, but we also have manufacturers who tend to be a bit maverick, shall we say, and like to have fun with the meter.
Also, when we benchmarked ourselves against South Africa, Zambia, Kenya, and India, we realised there was a unique difference – they have tighter legislation and tacit law enforcement for meter tampering.
In India, there are charge sheets that are tailored for the electricity sector. As soon as you identify foul play with a meter, the energy company fills out a sheet and then the police will act.
In Uganda, however, legal battles take a long time so we must disincentivise large power users by showing them if they touch the meter, their name will be tarnished and there will be no benefit to them.”
Tell us about the AMI project.
Mubiru: “We expect to deploy 15,000 transformer and customer meters within a three-year period.
We are also busy building a team that will manage the system, including deployment experts and a data analyst.
We have found that you have to approach this holistically – technology is the enabler but it is the teams around it that will make it effective.”
How have large power users reacted to the new technologies?
Mubiru: “When we installed the AMR units, it wasn’t a real game-changing experience for our industrial customers as our service to them didn’t change that much, and they still had access to the meters – which is what they expect.
In this second phase, using AMI, there will be a paradigm shift and I expect to see a response from them.
We will take away access to the meter and give them visibility instead through online meter reading software.
We are looking at using a tighter box with own access control system and alarms that will send an SMS to the nearest field team if a meter is damaged.
Some customers – like Lafarge – are very excited about the data and being able to smooth the curve of their production regime with energy efficiencies.
But others will need to educated about the benefits. Our communications team is working with a local media firm to create a campaign that will trumpet the benefits of smart metering.
We need to pop the bubble on any sensationalist spin that might spin the AMI out of work.”
How are you financing the AMI rollout?
Mubiru: “The Electricity Regulatory Authority gives us an incentive to invest with a fixed rate of return, as long as we can show that we are offering value addition to the sector.
As our motive for the AMI system is loss reduction and improved customer service, we were able to secure the funding.
The ERA also understands that if the AMI is effective, then we will over time be able to reduce tariffs.
With each percentage point that we cut losses, we are putting the revenue straight back into the tariff and we will be able to spread the savings across a growing base of tariffs.
With the work we have done already on reducing losses, we have managed to not increase tariffs.”
Robert Mubiru will be speaking on the metering conference programme at African Utility Week on 14-16 May. For more details, click here.