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Revenue Recovery

How to make more money that’s already yours

(SCE)

Presented by: Robert Montoya

September 2009

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What we will review todayWhat we will review today( Recovering your Revenues) ( Recovering your Revenues)

Quick, Comprehensive review of Revenue Quick, Comprehensive review of Revenue Recovery (Internal as well as External) Recovery (Internal as well as External)

Internally communicate your performance, Internally communicate your performance, success stories, and metrics (gain visibility) success stories, and metrics (gain visibility)

Performance goals and Safety programs to keep Performance goals and Safety programs to keep everyone focused, constant communications, and everyone focused, constant communications, and gain supportgain support

Review an actual and recent theft case at Review an actual and recent theft case at Southern California Edison = Net $ 2.5 M in TheftSouthern California Edison = Net $ 2.5 M in Theft

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Review of Best Practices whenReview of Best Practices whenbilling and recovering revenuesbilling and recovering revenues

Investigate Energy Theft leads ASAP (1 to 5 days)Investigate Energy Theft leads ASAP (1 to 5 days) Go prepared with billing history and researchGo prepared with billing history and research Conduct a thorough investigation/retain all evidence Conduct a thorough investigation/retain all evidence

(photographs and all hardware)(photographs and all hardware) Utilize Prosecution when needed and utilize the D/A office Utilize Prosecution when needed and utilize the D/A office

and try to gain support from your law dept. and try to gain support from your law dept. Communicate/Coordinate with local law enforcement when Communicate/Coordinate with local law enforcement when

needed (Marijuana grows- DEA etc.) needed (Marijuana grows- DEA etc.) Work with your Billing & Collections department (follow up Work with your Billing & Collections department (follow up

– payment arrangements – collections) – payment arrangements – collections) Negotiate a settlement (new and old cases before these go Negotiate a settlement (new and old cases before these go

to write off) to write off)

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Communicate your Performance Communicate your Performance to gain Internal, On-going Support to gain Internal, On-going Support

Do you have a NewsletterDo you have a Newsletter Do you publish your performanceDo you publish your performance Do you Communicate with upper management on all large Do you Communicate with upper management on all large

success stories, close calls, and safetysuccess stories, close calls, and safety Do other Dept’s know about Revenue ProtectionDo other Dept’s know about Revenue Protection Are you involved in Benchmarking (best practice)Are you involved in Benchmarking (best practice) Do you reward your employees (bonus program)Do you reward your employees (bonus program) Are employee’s focused on goals/metrics and are these Are employee’s focused on goals/metrics and are these

published and measured on a monthly basispublished and measured on a monthly basis Do you have a Training Program for your InvestigatorsDo you have a Training Program for your Investigators

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Setting Performance Goals Setting Performance Goals and link to performance appraisals and link to performance appraisals

Do you measure the following?Do you measure the following?– Safety is #1 ride a longs by Supervision (its not Safety is #1 ride a longs by Supervision (its not

all numbers)all numbers)– Are your goals tied to appraisalsAre your goals tied to appraisals– Goals for Billed & Collected Revenue Goals for Billed & Collected Revenue – Goals for Billing the cost incurred for correcting Goals for Billing the cost incurred for correcting

Theft cases Other Operating Revenue (OOR’S)Theft cases Other Operating Revenue (OOR’S)– Goals measuring backlog, and cases Goals measuring backlog, and cases

investigated within XX timeframeinvestigated within XX timeframe

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14 Years of Billed & Collected Data14 Years of Billed & Collected Data

2.8 2.5

4.5

6.3

4.0

5.5 5.8

9.3

10.6

8.7

5.5

10.4 10.8

8.0

13.7

1.8 2.23.3

4.73.3

4.3 4.0

6.2 6.27.3

9.3 9.07.1

5.7

9.9

$0.0

$3.0

$6.0

$9.0

$12.0

$15.0

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Billed Collected

MIL

LIO

N

7

14 Years of Billed & Collected Data14 Years of Billed & Collected Data

2.4 1.6 0.6

13,7

34,834,7

20,1

9,9

31,2

22,9

15,3

$0

$5

$10

$15

$20

$25

$30

$35

$40

1995-1999 2000-2004 2005-2008 2009

Billed Collected Write Off

ProjectedProjected

MILLION

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Theft Dollars Billed 1995 - 2009 YTD Theft Dollars Billed 1995 - 2009 YTD and Projected YEand Projected YE

Theft BilledTheft Billed Percent IncreasePercent Increase

1995-19991995-1999 $ 3.768 M$ 3.768 M

2000-20042000-2004 $ 8.707 M$ 8.707 M 231%231%

2005-20082005-2008 $12.035M$12.035M 138%138%

2009 July ytd 2009 July ytd $5.113$5.113

2009 Projected 2009 Projected Year EndYear End

$8.766M$8.766M

9

4

4

55 12

199

6

0

6

12

18

24

2006 2007 2008

SCE- Revenue Protection

SCE 2008 = Q2

Low

High

Pe

rfo

rma

nce

SCE remains in the 2nd Quartile for Inspections and Recovered Revenue Reviewing the peer panel, Duke and Dominion currently utilize 65% computer

analysis to determine theft

Lost Revenue Recovered as a % of Lost Revenue Billed

Site Inspections per 1,000 Customers

69%75%

77%

100%

43%

81%

74%

46%

0%

25%

50%

75%

100%

125%

2006 2007 2008

SCE 2008 = Q2

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Review Theft case of $ 2.5 MillionReview Theft case of $ 2.5 Million

Major CustomerMajor Customer Plating BusinessPlating Business Time of use RateTime of use Rate Meter read by RTEMMeter read by RTEM Energy Theft ProgramEnergy Theft Program

– PreventionPrevention– DetectionDetection– InvestigationInvestigation– ProsecutionProsecution– RestitutionRestitution

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From Your Power Point From Your Power Point – Marijuana Grows– Marijuana Grows

Our Investigators work very close with our Our Investigators work very close with our local law enforcement agencies, DEA, DOJ, local law enforcement agencies, DEA, DOJ, ATF and the District Attorneys office.ATF and the District Attorneys office.– We get tips on suspected grow homesWe get tips on suspected grow homes

Conduct site visit to amp check service as a routine Conduct site visit to amp check service as a routine order.order.

– Respond to law enforcement request to verify Respond to law enforcement request to verify and calculate any energy theft and remove and calculate any energy theft and remove potential electrical Safety hazards.potential electrical Safety hazards.

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Marijuana Grows - ContMarijuana Grows - Cont

Involve our company lawyers in any case over $400Involve our company lawyers in any case over $400– Verify assets, who owns the home or businessVerify assets, who owns the home or business– Assess risks and cost to pursue restitutionAssess risks and cost to pursue restitution– Present bill to customer and try to negotiate settlement based on Present bill to customer and try to negotiate settlement based on

assetsassets A majority of these grows are maintained by illegal immigrants A majority of these grows are maintained by illegal immigrants

(MULES) the home owner lives out side the United States. (MULES) the home owner lives out side the United States. In some cases we can place a lien on the home hope for future In some cases we can place a lien on the home hope for future

sale to collect.sale to collect.– Prepare documentation for litigation.Prepare documentation for litigation.

How we calculated the bill i.e. method connected load or How we calculated the bill i.e. method connected load or equipment, time frame, rules and rates that were applied.equipment, time frame, rules and rates that were applied.

Calibration of equipment used to measure must be Calibration of equipment used to measure must be documented.documented.

Pictures to support informationPictures to support information..

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Closing Thoughts Closing Thoughts

Safety is #1Safety is #1 Its about the People, Process, & TechnologyIts about the People, Process, & Technology Keep Performance numbers and Keep Performance numbers and

Communications high on the listCommunications high on the list Communicate to upper management and Communicate to upper management and

gain supportgain support Persistence in Billing, Collecting and utilize Persistence in Billing, Collecting and utilize

all resources availableall resources available