DISTRIBUTION
Kenyan case study: billing, metering
and revenue protection insights
This paper gives an overview of the operational situation as it existed at Westwood Power Company (WPC) in June 2006 when the management
service contractor took charge of the company, and the acttions taken to improve the situation.
Prior to June 2006, the company operated in
an environment characterized by a prolonged
and severe draught which led to load
shedding and power rationing throughout
the country because a big percentage
of the company's source of power was
hydro based. This substantially eroded the
company's revenue base, leading to financial
losses. The financial constraints experienced
by the company at the time meant that vital
system reinforcement projects had to be
severely curtailed, and this in effect resulted
into high system losses. The quality of supply to
customers also deteriorated to a point where
the number of customer supply interruption
incidences stood at about 13 000 incidences
per month by June 2006, a very high figure
compared to the corporate target of 6 000
incidences per month at the time. Due to
the prevailing difficulties experienced by
the company at the time, management
lost focus and effort applied was basically
geared towards fire fighting.
In the area of connectivity, there existed a
very huge backlog of some 27 000 new
customers who were waiting to be connected
to the grid, a situation that was quite alarming
to the management of Westwood. This
frustrated efforts to increase revenue base,
and coupled with the slowness of the
economy at the time, meant that customers
tended to use less electricity, while many
were tempted to steal electricity, thus further
eroding the company's revenue base. In the
process, losses increased while bad debts
also increased, as more and more customers
were unable to settle their bills.
The new management refocused employees
of the company using the available resources
at the time, through cost effective measures
to improve on revenue security, while pursuing
a culture change amongst the operational
staff from the "fire fighting" mode of handling
Technical losses
Transmission 4,00%
Distribution 10,63%
Total 14,63%
Table 1: Losses as at June 2006.
by Shahid Mohammed, Kenya Power and Lighting Company
problems to a detailed and concise program
of distribution substation maintenance as
well as upgrade of overloaded circuits and
transformers. These efforts included:
• Investigating cost effective strategies
in employing alternative loss reduction
initiatives.
• Tracking revenue through maintaining a
dedicated commercial cycle policy for
meter reading.
• Assessing the critical key steps in dealing
with our overall revenue management
on a large scale.
• Looking at plans for adoption new
billing technologies to help with revenue
management dispositions.
These efforts resulted into a reduction of
customer supply interruption incidences
from a high of 13 000 in June 2006 to
6 000 per month by June 2007. A daily
monitoring of the connectivity progress was
also introduced and this effort resulted into
increased revenue by connecting 120 000
new customers for the financial year ended
June 2007, against a target of 120 000.
With money still a constraint at the time,
cost effective ways of billing and revenue
collection were employed which included
smaller and manageable meter reading
itineraries, and more accurate billing by use
of hand-held sets.
While the company surpassed its yearly
targets on reducing system losses and
days receivables of collection through
employing cost effective measures, it is
also considering introducing new billing and
metering technologies including automatic
meter reading (AMR) and prepayment
metering. It is believed this will help the
company further combat fraud and
electricity theft and improve on revenue
collection.
The government negotiated with the World
Commercial losses Total
- 5,22%
5,00% 14,41
5,00% 19,63%
energize - December 2007 - Page 10
Bank for assistance, and this resulted in a
management services contract to manage
the company for a period of two years with
effect from July 2006 under a performance
contract with yearly targets to be achieved
by the management contractor covering
parameters such as system efficiency,
revenue collection, power quality, and
quality of customer services. In an effort to
turn around the company, the management
contractor focused on cost effective loss
reduction initiatives, a dedicated commercial
cycle policy, as well as improvement of the
process of revenue management as detailed
below.
Cost effective loss reduction initiatives
As at June 2006, the system losses at WPC
stood at 19,63%, while the tariff allowed for
losses of 15% meaning that the company
was absorbing a direct loss of 4,63%. A study
was carried out separating the commercial
losses from the technical losses, and the
following figures give an indication of these
loses (see Table 1 and 2).
In order to address the challenge of reducing
this figure, the new management came
up with separate initiatives for commercial
loss reduction and technical loss reduction.
Given the limited financial resources and
long lead times for procurement restricting
major projects at the time, the following cost
effective measures were employed:
Commercial loss reduction initiatives
This included the following activities:
Global sweep
The use of this term refers to the audit/
inspection of all energy meters and their
associated installations. The initiative was
branded "Global Sweep" for emphasis
purposes so as to rally support amongst the
involved staff. This operation was segmented
into ordinary supplies with low to medium
consumption on the one hand, and large
power supplies on the other for purposes
of creating a more focused approach,
more so because large power supplies
accounted for 63% of revenue collected by
the company.

Technical losses
Transmission 4,2%
Distribution 9,09%
Total 13,29%
Table 2: Losses as at June 2007.
For ordinary supplies, the aim was to weed
out cases of meter tampering cases that
were happening through the breaking of
meter body seals, bypassing of meters, partial
bypasses and disconnected neutral wires,
direct connections at the pole in informal
settlements, and inaccurate and obsolete
electro-mechanical meters.
As for large power supplies, the aim was
to eliminate cases of incorrect metering
arrangements/wiring, data mismatch
between current transformers (CTs) and
meters, faulty and saturated CTs, CT shorting
and bypassing of CTs, and inaccurate
and obsolete electro-mechanical meters.
The challenges faced included shortage
of inspection staff, tools and transport.
Corrective action included the raising of
backdated debt which was billed to the
customer responsible for the defective meter
to aid in the recovery of lost revenue.
Empowering the installation inspection
process
It was realized that although the company
had technical personnel in the field of
revenue protection (routine inspection), their
effectiveness was hampered due to lack of
tools, testing equipment and the requisite
training in the use of these equipment
in order to measure losses and detect
electricity fraud. Therefore, procurement of
modern testing equipment and tools was
undertaken towards this end, which resulted in
the acquisition of the Zera Portable Standard
and Power Analyzer, amongst others. The
Zera equipment was especially useful in
detecting bad wiring of large power metering
arrangements, and also testing the accuracy
of meters.
Following the acquisition of this equipment, an
aggressive campaign to train technical staff
was undertaken. The aim of this training was
to empower the staff with the knowledge and
skills of operating the testing equipment and
tools; as well as to show them how to correctly
wire large power supplies and detect other
Item Description
1. Meter reading coverage
2. Meter reading quality errors
3. Average time to read (days)
Table 3: Meter reading targets.
DISTRIBUTION
Commercial losses Total
- 4,2%
4,6% 13,69%
4,60% 17,89%
emerging causes of commercial losses, for
example the disconnection of the neutral. This
initiative was quite successful as a number of
cases were unearthed where the company
was losing a substantial amount of units.
Technical loss reduction initiatives
The prevailing financial constraints at the
time, as well as the long lead times in
procurement, constrained the ability for quick
gains in this area, leaving management with
no option but to resort to cost effective and
quick ways for reaping low hanging fruits.
A study was done which indicated that
40 - 11 kV feeders were significantly overloaded
and required a total of approximately
500 km of re-conductoring from 75 mm2 ACSR
conductor size to 150 mm2 size. The study
also revealed that about 2000 distribution
transformers were either overloaded or had
overload/overextended circuits that required
to be relieved through introduction of new
relieving transformers and the splitting of
network circuits so as to share the loads.
Improved operational practices
By end of June 2006, it was realized that a
number of distribution operations were not
being carried out in a professional manner,
and this included activities such as the wiring
of transformer substations, the jointing of
conductors and transformer fuse grading,
amongst others. The challenge was to
change the way operations were undertaken
at the time, and to inculcate a culture of
doing work to internationally acceptable
standards. To this end, emphasis was put
on the correct way of doing the distribution
transformer substation circuit wiring, use of line
taps on joints previously done with binding
wire, carrying out of proper fuse grading,
balancing of transformer circuits and phases
with unbalanced loads, replacement of faulty
capacitors and faulty automatic voltage
regulators in the distribution network so as to
achieve voltage improvement, and prompt
and regular cutting/trimming of tree branches
along power line routes.
Achievement as at
Set target
June 2007
98% 98%
<3% 2%
3 2
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DISTRIBUTION
Item Description
Average period for resolution
1.
of anomalies (days)
Table 4: Target for anomalies resolution.
System reinforcement
System studies undertaken during this time
period revealed that large portions of
the distribution network were contributing
substantially to technical losses due to
the use of under-sized conductors, over-
extended feeder lines, transformers with
over-extended low voltage networks that
resulted into poor voltage profiles and
hence pronounced losses, and over-loaded
transformers. An exercise was initiated
aimed at re-conductoring under sized MV
feeder lines to 150 mm2 ACSR conductor,
establishing new distribution transformer
substations where low voltage lines were
over-extended, and relieving of over-
loaded distribution transformers through
the creation of additional transformer
substations with added potential of
increasing connectivity.
Dedicated commercial cycle policy
(DCCP)
The dedicated commercial cycle policy
constitutes a set of principles that guide
the processes of meter reading, billing and
revenue collection by defining the various
targets for bench marking with internationally
accepted practices for general customer
service improvement.
Metel reading principles
• Meter reading was seen as the most
important of these processes as it is the
starting point of the commercial cycle.
The following were done to improve this
activity.
• Meters were grouped in itineraries for
ease of reading. Out of 900 000 plus
customers, there were 5064 itineraries
spread over the country.
• The releasing of itineraries for meter
reading was managed by the meter
Item Supply type
1. Ordinary (consumption <7000 UPM)
2. Large power (cons. >7000 UPM)
Corporate accounts: GOK, parastatals,
3.
embassies and local authorities
Table 5: Customer accounts segmentation.
Item Description
1. Collection as percentage of monthly billing
2. No. of days receivables
Table 6: Revenue collection targets.
Achievement as at
Set target
June 2007
3 2
reading calendar (meter reading
calendar is a schedule of dates which
operate on a batch process for releasing
the itineraries 3 days before the planned
reading dates. This calendar was updated
at the beginning of every year and was
used as a complete year planner for
meter reading).
• The calendar was based on the concept
that each month had at least 20 working
days (Monday to Friday) excluding all the
national holidays.
• The itineraries were sent to reading
centers that were specially created for
ease of management of readings, taking
in to consideration the geographical
spread of customers.
• The itineraries were uploaded into
hand-held sets and assigned to meter
readers.
The meter reading targets set are shown in
Table 3.
Initially, there were big itineraries that posed
reading problems and that resulted in very
long cycles. This was solved by splitting these
itineraries into smaller ones that could be
read within a day. In order to eliminate meter
reading errors, the use of hand-held sets was
introduced.
Billing principles
The following principles were adhered to:
• Prompt billing of downloaded readings
within a day.
• Prompt resolution of all billing
anomalies.
• Prompt dispatch of bills on the same day
of billing. A service level agreement with
the Postal Corporation of Westwood was
worked out such that bills for Nairobi were
delivered the same day and those destined
for upcountry areas were delivered to the
mail boxes within two days.
Team handling
Revenue collection unit: comprised a supervisor
and revenue collection clerks
Large power unit, which comprised a supervisor (an
engineer) and large power technicians
Corporate account section: comprised a supervisor
and customer service officers.
Set target
Achievement as
at June 2007
98% 99%
55 42
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• An effective quality control team was
established to coordinate the various
functions so as to ensure the process
progressed to completion.
The targets set for resolution of anomalies are
given in Table 4.
The company's revenue collection process
was unimpressive, with a debt age of
two months, which translated to 60 days
of receivables. Therefore, there was an
urgent need to implement strategies for
improvement, and the following actions
were adopted:
• Automatic generation of service orders
(S/O) after credit period of 21 days.
• Printing or loading of generated service
orders into hand-held sets and prompt
action of the same.
• Prompt update of the service orders in
the billing system to enable change of
status.
• Follow up on S/O if payment is not received
after 30 days of disconnection.
• Introduction of defined zonal teams
with supervisors as their heads so as to
create a clear line of command and
accountability per team.
The handling of customer accounts was
segmented as shown in Table 5.
The revenue collection targets set are shown
in Table 6.
The following actions were taken:
• Provision of tools: motorcycles, radios,
mobile telephones and pole teams (to
handle difficult disconnections).
• Levying of reconnection charges/
fees to act as a deterrent to would be
defaulters.
• Use of deposit to offset customer debt
after two months, and release of a
demand note to customer in form of a
final account statement.
• Sending of a reminder demand note
to the customer after 14 days. The debt
would thereafter be followed up for
payment by debt collectors. Where the
debt collectors failed, such cases were
passed onto contracted private debt
collectors (PDC).
• Where the PDC were unable to collect,
such cases were passed on to the legal
department.
Process improvement on revenue
management on a large scale
It was realized the vastness of some business
areas was hampering focus on revenue
collection. This was resolved through creation
of smaller and more manageable field
teams (zonal teams with a supervisor per
team), which brought about clear line of
command and accountability in each
DISTRIBUTION
team. Due to the existence of unscrupulous
customers who were bent on locking their
premises or illegally reconnecting supplies
once disconnected, it was felt that a fresh
approach was needed to counter these
bad practices. This was achieved through the
creation of support teams otherwise known
as "pole teams" whose job was to disconnect
such difficult cases at the terminal pole, a
move that led to the efficient disconnection
of all cases.
Segmentation of the customers according to
consumption and type of uses was undertaken
to also increase the efficiency of revenue
management. Credit extension facility was also
introduced for purposes of allowing customers
with huge debts to pay them in manageable
monthly installments over a period of time.
A number of reconnection fees were also
introduced to act as a deterrent to customers
who were perennial defaulters. These were:
• 354 Kenyan Shillings for cut out
reconnection
• 3300 Kenyan Shillings for pole
reconnection
• 12 000 Kenyan Shillings for service line
reconnection
All these measures served to increase
awareness on the customer's side, thereby
encouraging prompt payment without
disconnection.
Billing technology solutions
The company's billing system has evolved
over time from "ME29", which operated up to
1995; then to "Custima", which operated until
early 1997 (these were both batch based
billing systems); to finally a modern customer
relationship management (CRM) system
known as Integrated Customer Services (ICS).
ICS was started in 1997, and the system was
further upgraded (named CMS) in April 2007.
As by July 2007, it was handling about 936
582 customers with limitless capacity.
The 2007 ICS upgrade was aimed at:
• Increasing the processing speed through
converting of the billing system from the
former "bill based" (where each query
was accessing the entire number of bills
since inception of ICS i.e. 33-million bills)
to the current "balanced based" one,
which has lower memory requirements,
as the old bills are closed, and it is only
the balance that is carried forward.
• Reducing the storage requirements which
had risen from 65 GB to 320 GB. At the
current rate of connections, 12-million bills
are added every year, hence the need
to have a system that enables archiving
of old bills once they are closed.
Metering technology solutions number about 4000 but constitute 63%
of the billing/revenue, hence the need
Upgrading of meters
to focus on this group of customers.
The metering for these supplies evolved Therefore, by introducing AMR for these
from single phase electro-mechanical customers, the company would be able
meters to single phase electronic meters, to effectively control 63% of its business
which were introduced in 2001. The through constant monitoring of the supplies.
metering for three-phase supplies also Due diligence has already been done, and
evolved from eletro-mechanical meters implementation is expected to commence
with a separate maximum demand in December 2007.
indicator for CT metered supplies, to Prepayment
tri-vector meters (which though eletro-
WPC faces meter reading and revenue
mechanical in nature, combined all the
collection challenges in slums (informal
parameters for large power supplies in
settlements) e.g. Kibera, which is the
one unit), to finally three-phase electronic
largest of its kind in East and Central
meters, which were introduced in 1998.
Africa. It is intended that prepayment
Comparison between electro-mechanical metering be introduced for these informal
and electronic meters settlements, and to gradually spread the
usage to other single-phase customers.
Electromechanical meters were plagued by
The type of metering to be used will be
accuracy and tampering problems, and for
the prepayment split metering that offers
cases where a maximum demand indicator deterrence to tampering. Towards this end,
was being used, their resetting became an there is already an electrification scheme
issue as this was an insecure area which could in the Kibera slum that uses load limiters
be tampered with by unscrupulous customers installed at the poles to limit the customers'
or employees of a utility. consumption. Upon implementation of
prepayment metering, these load limiters
Consequently, electronic meters were
will be replaced with prepayment meters.
introduced, and these offered better
Other than inspecting these prepayment
accuracy, together with a wide range
meters, there will be no need of regular
of functionality that are especially useful
reading and disconnection, as this will
for large power (current transformer
be automatic, which will further improve
metered) supplies. In the area of fraud
on revenue management. When fully
prevention, electronic meters were found
operational, it is envisaged that the
to be less susceptible to tampering/
prepayment metering will cover about
interference, and could record reversed
960 000 customers.
energy. The single phase electronic meter
records consumption correctly when Acknowledgement
connections are reversed, and can also This paper was presented at the Terrapin
detect disonnection of neutral fraud. In Billing and Metering World Africa 2007
the next consignment of single-phase Conference in Johannesburg, and is
meters, the electronic meters will be able published with permission. v
to record correctly even when the neutral
is disconnected i.e. the meters able to
operate on a single (live) wire only are to
be procured.
Future initiatives
In line with the current global trends of
best practices in utilities, and so as to
further improve on revenue management
dispositions, the company plans to introduce
automatic meter reading (AMR) and
prepayments meters.
AMR
AMR is fast becoming a best practice in
utility management worldwide. It is a natural
progression in the evolution of metering
technology. In WPC, large power customers
energize - December 2007 - Page 14