According to our experience, operational management and Revenue improvement hinges on the following critical issues:

Critical Issue 1: Lowering Costs and Reducing Technical Losses

One way of reducing losses is to audit the 20% of customers that typically provide the Utility with 60-80% of its revenue – large industrial and commercial customers. The reason for doing this is to ensure that the metering point is accurately metering the electricity consumption by the customer and that the billing system is accurate. Provide these customers with reliable metering and billing, and the revenue will flow. It is a simple matter to manage a relatively small number of high consumption customers since the resource constraints are not serious and the customers have vested interests in keeping the connection open. This illustrates the importance of managing billed customers alongside prepaid customers and the critical importance of the application of appropriate technology for Large Power Users (LPUs) as well as Small Power Users. (SPUs)

Critical issue 2: Concentrate on Large Users to Create a High Impact

Notwithstanding, most utilities do not have the luxury of a sufficiently significant high-consumption customer base to ignore the residential customer. It is significantly more difficult to improve revenue from a large number of low consumption customers, especially in areas where the network infrastructure is not in a good condition. The level of service provided need to be aligned with the levels of income obtained from these customers when determining the extent to which technology is leveraged. It is imperative to treat Large Power users differently from a support and technology point of view to gain the best value from them and for them. For example, AMR/RMR is most suited to LPUs and Prepayment is most suited to SPUs.

Critical Issue 3: Provide Appropriate Levels of Service

The issue of affordability must always come into the picture and customers should not be expected to pay for what they cannot afford. Mechanisms to educate customers to the costs and implications of indiscriminate usage must be utilized. It is important therefore to consider the viability of prepayment and to design graded levels of service to match customer affordability.
Technical losses, non-technical losses and non-payment in some areas can be significant. A reduction in losses is usually accompanied by an increase in network reliability and an improvement in customer service to the customers being served in a particular area. The most effective techniques involve improving customer service in parallel to explaining to customers the need for more stringent revenue management practices. It would be wise to leave the collection of arrears as a low priority and to aim to collect the current collectibles. Close cooperation and communication with local communities helps to achieve this aim.

Critical issue 4: Customer Service and Communication

A common understanding between customers and local authorities is required as a starting point to rehabilitating the networks and improving revenues thereby ensuring sustainability. The process to rehabilitation is programmatic. Firstly the process must be measured so that it can be controlled. The information regarding the meter, the customer, the physical location and the bill must be accurately determined using a process that is easy to maintain and keep up-to-date. Customers must be accurately and timeously billed and action must be taken against defaulters in a fair, consistent and respectful manner. Carefully chosen technology applied judiciously can assist with this process. UDS has implemented AMR, prepayment online systems, voucher vending, GIS technology and Internet and SMS platforms in this regard.

Critical issue 5: Support for an Integrated Systems Approach

An integrated systems approach involving multi-disciplinary teams has proven to be most effective in implementing successful projects. Significant effort is focused on pre- and post-implementation activities such as situational analysis, functional design, system design, operation and maintenance, training and support. Management and political support for the process is essential if a sustainable process is to be established. The finance, technical and customer service entities within the utility have to work together to tackle problems head-on in a structured and integrated fashion. Both functional and technical integration are important.