Prepayment Metering

1

Prepayment Metering

from the

African Perspective

by

Deon Louw

Biography

1

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Speaker:Deon Louw

Position:Co-Coordinator

Company:City of Cape Town

Country:South Africa

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Deon Louw is currently one of the two co-coordinators of Electrical Engendering within the newly demarcated City of Cape Town. He has, prior to this amalgamation, been the Director of Electrical Engineering of the City of Tygerberg which is located next to Cape Town at the southern part of Africa. Deon is the immediate past President of the South African Revenue Protection Association (SARPA). He is a registered professional engineer and is a member of the executive of the Association Municipal Electrical Undertakings (AMEU) of South Africa.

Deon graduated at the University of Stellenbosch where he obtained a degree in electrical engineering. His career started at the Iron and Steel Corporation where he was a Development Engineer. Thereafter he joined AECI where he was also a Development Engineer. In 1986 he joined the consultant engineers De Villiers & Moore and gained experience in the municipal environment. At this point the Municipality of Goodwood decided to take over the electrical distribution from Eskom and he became the Town Electrical Engineer of Goodwood. Local Government was restructured in 1996 and Goodwood was amalgamated into the City of Tygerberg and Deon was promoted into his current position.

Deon is currently actively taking part in various national electricity restructuring drives which includes the national electrification coordination committee and the restructuring of the electricity distribution industry of South Africa.

Deon is also actively involved in establishing an Africa Revenue Protection Association. This association recently decided that they would like to be known as the Revenue Protection Association of African Utilities (RPAAU).

1Executive Summary

Africa and in particular South Africa is one of the first places in the world where prepayment metering has been introduced for the rendering of a service such as electrical reticulation.

Prepayment metering started in 1984 and was introduced to curb the ever rising problem of non-payment and theft of electricity. Very little investigations were done into the effect that this would have on the community at large and the reaction that the community would have on this form of service delivery.

At first it was thought that the mass move toward non-payment in South Africa was solely due to the old regime of apartheid government, but it was found that this was not the only reason. It was found that for the most Africa in general had the same problem of no-payment or theft. It was further found that a huge misunderstanding exists from both the community and the consumer sides.

While prepayment metering was thought to be the answer to all non-technical loss problems, it was soon found that it brought with it its own problems. A much higher rate of tampering was found within prepayment metering systems than conventional systems. Very soon technology was used to further curb this tampering problem. The community reacted by finding more ways of tampering and a cold war of technology was entered into with the community.

Soon it was discovered that technology alone could never curb this problem. The best way found was the cooperation of the utility and the community into understanding each other and acceptance of a payment culture. It was found that pier or community pressure upon itself was much more effective in curbing the non-payment and theft problems than technology alone.

The lesson learned was that prepayment metering should be used for what it is designed for which is broadly being able to manage consumption and money up front for the utility. The better control of non-technical losses is secondary. It must however be noted that the conventional system is effective for well-established communities and is still a very inexpensive way of delivering a service. For communities whom normally only pay cash, such as the low income and indigents, the prepayment system is an excellent and most effective system to deliver a service. The prepayment meter system is inevitably much more expensive than conventional metering. Unfortunately this presents a problem in that where the maximum benefits of funds are needed the preferred equipment is more expensive and vice versa.

The golden rule remains: “Use technology for the purpose it was designed for and always keep the needs of the consumer close at heart.”

2History of Prepayment Metering in Africa

The first installations of prepayment metering in Africa took place in Cape Town South Africa in 1984. At this point in time South Africa was still run by the apartheid regime and the community was reacting on a large scale. One reaction was a mass non-payment drive. In order to counter this problem experimental prepayment meters were installed which would then automatically interrupt the electricity supply if credit has run out. The reading of conventional meters became dangerous in the low income communities as meter readers were threatened with their lives when they wanted to read meters.

The first system of prepayment meters to be installed was the magnetic card meters which received its payment information by inserting a paper card with a magnetic strip pasted to it, not unlike a credit card.

Due to problems with this magnetic type of meters the key pad meter was developed which required the consumer to punch in a code which would then tell the meter what credit was bought. Problems were experienced with short codes and the code structure evolved to a 24-digit code.

The 24-digit code became very problematic as many Africans are illiterate and found it difficult to punch in such a long code. The remote prepayment system was developed where credit was bought at a vending station and the consumer’s mete remotely updated, much like cable TV.

The information below informs the reader of all the problems experience with credit metering in both electricity and water. It shows how meters evolved and also discuses the reasons for this evolution process.

3Why Prepayment Meters

As briefly stated above, the reading of conventional meters became problematic due to mass consumer reaction against the government. There is however a list of reasons why one would change to prepayment metering.

3.1Advantages of Prepayment Metering

Previously with conventional type or Ferraris type metering it required that meters be read regularly. This meant that a meter reader had to fiscally visit each meter site and record the meter reading onto a chart or hand-held meter reading unit. The meter reader would then return to his base and transfer this information to the appropriate mechanism for process. From these readings computerized systems would process the data and would produce monthly accounts for postage. The account is then posted and would reach the consumer a few days thereafter. The consumer would be allowed a certain number of days to pay his account. The time from the date the meter is read to the date the account is paid, averages out to 75 days.

The delay in payment meant that utilities had to cater for this 75-day period in the form of bridging finance which effectively reduced the capacity of the utility to expand rapidly.

Should prepayment metering be installed the utility would then receive the money actually prior to the consumption of electricity. The effect of swinging from conventional Ferraris type meters to prepayment meters would be a receipt of money 90 days earlier. This would make a singular huge difference in the utilities cash position.

By using prepayment metering the utility effectively cuts out the meter reader. Reading errors are done away with and the salary cost of the meter reader is saved.

The utility does not have to send staff to consumers to have them cut-off when a default has occurred on payment. The prepayment meter would automatically shut-off when the credit has been depleted.

In summary the following advantages could be achieved from prepayment metering.

-Consumer pays up front for service

-90 Days swing in income

-No account needs to be sent out

-The meter reader is done away with.

-No meter reading errors

-Meter automatically cuts consumer on expiry of credit

-The utility is not seen as the “bad guy” upon cut-offs

3.2Disadvantages of the Prepayment Meter

Initially the following disadvantages were perceived.

The flip side of the prepayment meter coin is that firstly the system is more complicated and needs higher level staff to run the system. Maintenance staff need to be trained to a higher level to operate and repair the meters and meter systems. Where customers could previously pay accounts by post, they must now visit a vending station to buy tokens. It was previously aimed to reduce queues at utility cashier offices. Now the queues are lengthened as consumers are forced into queues.

Meters are not automatically visited as the meter reader has been removed. It is therefore necessary to have inspectors inspect premises on a regular basis to dissuade tampering.

In summary:

-System much more complicated

-Higher level of operational and maintenance staff needed

-Cashier queues are lengthened instead of shortened

-Meters not automatically visited

-Increased possibility of tampering

4Unforseen Problems with Prepayment Metering

Some unforseen problems were experienced with the prepayment meter systems. It was also found that the system resulted in a dynamic “war” with consumers as will be explained later.

4.1Magnetic Strip Meter

Initially the magnetic strip token type meter was used. The meter had a card reader which obtained its information from a magnetic strip on a paper card. It was soon found that due the meter inevitably being placed in the kitchen that the mechanics of the meter were slowly being coated with fatty substances from the preparing of food. This attracted cockroaches which entered the meter through its magnetic card opening. After entering the meter the cockroaches grew in size but could not exit again. They fed on themselves and anything that were edible inside the meter and eventually damaging the meter.

Due to the meter being placed inside the house for easy access by the consumer, tampering became rampant. The meter was not visited each month by the utility anymore and the consumer had all the time in the world to tamper. One way would be to carefully cut the magnetic strip along its length. By pasting the two halves on a piece of paper or a card, it was possible to effect two entries for the price of one.

4.2Key Pad Type Meter

Eventually the card type meter made way for the keypad type meter. This meter could be properly sealed against the ingress of insects. It however required a certain level of literacy to operate. This presented a problem to consumers. Due to fraud being rampant the code had to be made progressively more complicated. At present a 24 digit code has to be entered. The code is entered starting with the left most digit. The meter then scrolls the code to left as the next digit is entered. On average the consumers are used to reading from left to right and often got confused with the code scrolling from right to left.

Consumers also learned to tamper with this meter. A list of tampering methods are shown below. To learn more about tampering methods the password protected section of the SARPA website can be visited. A password can be obtained by becoming a paid member of SARPA.

-Putty knife into side of meter

-Pin into circuit breaker

-Bypassing internal leads

-Cutting into section of printed circuit

-Hitting a certain section of the face of the meter with a hammer

-Disabling the electronics

5Rectifying Problems

5.1General Tampering

It has been found that the pre-payment meter installations have to be inspected frequently but not regularly. A regular pattern causes the tamperer to remove tampers when the regular inspections are to be performed. This method is a must and each installation should be inspected at least twice per annum. During inspections the following items should be checked:

-Seals

-Lock-out state of the meter.

-Check whether the meter has run into a debit.

-Check the calibration and especially wether the register is reading correctly. The flashing light might be flashing the correct pulses but the register might have been tampered with.

-Check for scratch marks on the sides of the meter to detect whether a putty knife has been inserted.

-Check for tiny pin holes on the front where pins could have been inserted to prevent the circuit breaker from tripping.

-Check the external wiring to the meter especially when the meter has been retrofitted.

-Any other visual signs of tampering

5.2Low or No Consumption Records

Any billing and prepayment vending system software packages should come equipped with facilities to detect and alarm on low or no consumption usage. These reports should be followed up monthly.

More intelligent software packages exist which would look at the consumption pattern of the consumer and statistically analyse this usage. Some programmes have proved to have a 95% success rate in pointing out problem meters.

5.3Reconciliation of Purchases and Sales

The average electricity distribution network normally has a technical loss figure of approximately 6%. In order to determine this it is important to be able to measure the purchases and sales of energy. The sales however would be suspect as some of the meters could have been tampered with. For this reason it is recommended that the output of energy be measured at low voltage transformer level. The more sophisticated billing system allows for these measurements to be included and would then check that the sum of the consumer meters on that particular circuit with the reading of that particular transformer. It is normally found that a single months reading would not be sufficient to determine a loss as meters are not read simultaneously but over a few months a trend can be determined.

We normally take great care track every cent or penny of the utility’s income and expenditure. We even have our balance sheets audited regularly. Is it not about time the same is done with energy received and delivered?

5.4General

It is suggested that all of the above be utilised to protect revenue and in particular the frequent inspections.

6Modern Prepayment Meter Systems

In some way we have repeated history. Electricity metering started off with placing the Ferraris type meter within the house. This meter was read monthly and as such a member of the utility staff was at least present to inspect the meter every month. This however did not prevent meters from being tampered with and seals had to be installed to detect if a meter had been opened and tampered with. This did not work as the following true story will tell:

“A consumer tampered with his meter by placing a pin into the meter and thereby braking the rotating disc. This pin was connected to a curtain which normally covered the meter. When the meter reader arrived and opened the curtains to read the meter, the curtain would automatically remove the pin.”

Tampering like this led to meters being removed from houses and placed together with others in kiosks. This prevented the meters from being tampered with easily. It also had the advantage of facilitating the much quicker reading of meters as they were all grouped together. The problem with the meter reader and long delay in the receipt of payment for accounts still remained.

Conventional meters were replaced with prepayment ones. We however did not learn the original lesson very well and placed the meter again inside the house. It must be said that for retrofitting purposes, this was the most practical way to go. Very soon the same problem with tampering reared its ugly head, only this time the meter was not read or inspected in short intervals, which lead to much more aggressive tampering. Various methods have been devised to prevent tampering. Some of the more creative ones are discussed below.

6.1Split Metering

Due to tampering mentioned above a split meter was designed. The metering device itself was separated from the readout and control. The base is placed outside in a kiosk while the face is placed within the house. The consumer can still see his consumption and can enter codes. He can however not tamper or by-pass the meter from the control position. Additional cost however is the additional pilot wiring needed to connect the base and the control. The cable manufacturers have however made things easier by manufacturing a cable with a built-in pilot wiring.

The latest model split meters on the market utilize mains born frequencies to effect communication between the base and control. The base can be as far as 500m away from the control.