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Prepayment metering system strategies and implementation
challenges
Surendra Jhalora
Secure Meters Ltd
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How does Prepayment system work?
Electricity bought in advance
Amount as per convenience
Receipt is provided with a unique number printed on it
Enter the number into your keypad
Electricity credited into meter in Rupees Enjoy
Electricity
To buy electricity go to Vending Counter : place where electricity is sold
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Vending center -place where electricity is sold
Tokens - for information
transfer
Elements of Prepayment System
Meter with inbuilt disconnecting device
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� Paying before consumptionIs it NEW to us ?
� What about essential commodities like :� Petrol/Diesel� Cooking gas� Dish TV� Mobile prepaid cash
cards
Prepayment in Electricity!
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� Prepayment is not just a technology. It has a social impact� In the past Prepayment has been used as a tool for debt
recovery� Initial reaction to change has been cautious� However, people have opted for prepayment, as they see the
benefits� Introduction must be planned � A prepayment system trial is essential to understand the
technology and its sociology� A well planned introduction can make it the technology of choice
for the customers
The Sociology of prepayment
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� The Challenge is to make prepayment system a WIN-WIN solution for both utilities and consumers
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What the consumer is looking for in a prepayment system?
� Convenience of making payment� Monetary Information and being in control� Confidence in the cost of consumption� Budgeting � Energy conservation
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What an Utility is looking for in a prepayment system?
� Upfront revenue collection� No debts and means of debt recovery� Reduce billing costs and eliminate billing complaints� Eliminate hassles of disconnection and reconnection � demand side management� Provide better customer services� Better customer engagement and energy conservation
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Issues to address
� Regulatory support� Government support� Consumer issues � Identification of smart prepayment system� Utility organisation� Steps to move forward
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Role of regulators� A vital role in implementation� Active support needed� Rebate on energy charges and meter rent� Implementation of Complex Tariffs
� Slab rate for energy and demand� TOU� Minimum charge� Demand based charges� Simplification needed for Retrospective tariffs – Fuel
surcharge, next slab rate applicable for previous slab, special energy charge
� Implementation of Energy auditing through sales data
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Government support� Support required for
� Policies for implementing prepayment� Govt connections� Temporary connection
� Funding prepayment system� Taxes
� Simplification of tax structure
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What parameters to consider ?
Identify Smart prepayment system�Coverage of target customers�Customer profile�Customer convenience�Revenue collection and control�Tamper and Fraud prevention�Flexible tariff administration�Load management and control�Appropriate vending architecture
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Merchant/shop
Third party service providers
Bank ATM
24 hr Call Centre
Kiosk
Convenience of payment
Bank Website Utility Website
SMS
multiple vending options
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Cost of current load being used based on tariff price
Cost of previous day, week and month consumptionCost of previous 12 months consumption (month-by-
month)
KW LOAD
KW 19-00
LOAD COST
Rs. 102.60/HR
PREV DAY Rs. 1,200
PREV WEEK Rs. 7,700
PREV MNTH Rs. 32,000
FEB Rs. 33,000 JAN Rs. 28,000
DEC Rs. 27,000 NOV Rs. 25,500
Cost information & involvement
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Special Features••User friendly interfaceUser friendly interface••Display in RupeesDisplay in Rupees••Set Alarm levels Set Alarm levels ••Friendly credit hours(5pmFriendly credit hours(5pm --10am)10am)••Friendly credit days (Sun/Holiday)Friendly credit days (Sun/Holiday)••Emergency creditsEmergency credits
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The prepayment electricity tariff
� Flat tariff� Step tariff� Time of use tariff � Tariffs as per customer type� Standing Charges� Taxes� Debt Recovery
There is a need to rationalize tariffs for prepayme nt
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Flexible Tariff capability
First 100 kWhat 2.34 Rs/kWh
Second 300kWhat 2.90 Rs/kWh
Above 300 kWh’sat 3.30 Rs/kWh
First 100 kWhat 2.34 Rs/kWh
Monthly Billing period Next Month
Slab reset
Minimum chargesRs 100 per month
� Liberty Prepayment Meter can store 8 defined ‘SLAB’tariffs
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� Support 8 ‘Step’ tariffs and store 8 defined ‘Time of Day’(Peak-Off Peak) tariffs .
00:00
Rate 1 Rate 3Rate 2
23:0017:00
PEAK tariff OFF PEAK tariff
� ‘Time of Day’ (Peak-Off Peak) tariffs is possible due to the presence of inbuilt RTC
12:00
Max Demand based monthly chargesfor Peak period Rs 12 per KW
Flexible Tariff capability
00:00
Rate 1
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Load Limiting-Demand side management
100A
80AAlarm
Disconnection
DemandProfile
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The Economics of
prepayment
� Prepayment meters are more expensive compared to conventional energy meters
� Trade-off between cost of incremental investment against the tangible and intangible benefits
Intangibles : �Customer Satisfaction�Better load management
Tangibles : �Up front cash collection�No meter reading, billing and
bill distribution
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Utility organisation
� Creating organisation with in utility� IT� Finance� Meter management� User group� Regulatory, customer helpline� …and a dedicated cross functional project team for
prepayment implementation
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implementation
� Surveys� Pilots� PR campaign� Consumer education� Vending infrastructure� Branding
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Utility experiences …using Prepayment system
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Operational Cost SavingsNorthern Ireland Electricity UK
Liberty Project
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Northern Ireland Electricity (NIE) Home Energy Direct Project
� 50% reduction in billing costs� 73% reduction in meter reading costs� 14% reduction in call handling� 45% reduction in debt management costs� Debtor days reduced by 20%� 95% of tariff changes effected within two weeks
Figures courtesy of NIE
Over 220,000 meters installed
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System Loss ReductionsBangladesh Power Development Board
Liberty Project
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6.8518.1019.44H-034338October
07
21.9917.622.56H-034332October
06
SystemLoss
(%)Total EnergySold MU
EnergyImport byFeeder MU
FeederNumber
No. ofConsumers
EnergyRecordMonth
Revenue improvement is approx 30%Energy Saved is approx. 15.14%
& Peak demand has been reduced by 16.38%
Comparison of Feeder System LossOct-06/Oct-07 after implementation of Liberty Prepayment System at Chittagong
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(Energy Conservation)West Bengal State Electricity
Board Liberty Project
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Energy Conservation at Greenwood Park, Kolkata
17364
107248833 8906
7986
100%
62%
51% 51%46%
0
2000
4000
6000
8000
10000
12000
14000
16000
18000
20000
Dec '05 Jan '06 Feb '06 Mar'06 Apr'06
Month
Uni
ts C
onsu
mpt
ion
30%
40%
50%
60%
70%
80%
90%
100%
110%
% c
onsu
mpt
ion
Monthly Consumption in kWH
% consumption (units) ref Dec 05
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Thanking you