Building advanced metering infrastructures

Late last year, power regulator Nepra took notice of billing discrepancies in numerous electricity bills issued by distribution companies in Pakistan.

The regulator later published an inquiry report based on a limited sample size of data and period of 2 months which has since spurred debate on the need for scrutiny and building better systems in our distribution infrastructure.

Most of the anomalies pertained to billing not being done in the prescribed cycle days which led to excessive billing due to a slab change for non-ToU consumers.

The most interesting part of the report was Nepra’s recommendations, particularly the advisory of using handheld units to record meter readings. Citing KE’s example as the only utility doing so, the regulator stated the merits of using dedicated technology instead of error-proof methods like smartphones.

As per Nepra SOI 2022, there are 36.5 million electricity connections in the country, translating to 439 million bills annually. Even a 1% error will impact a sizable number of customers, necessitating improvements in the billing and larger distribution infrastructure.

Billing discrepancies can easily be mitigated by leveraging automation, digitization, and technology to reduce human intervention. Advanced economies are deploying low-cost smart meters as the next step, which eliminate meter-readers and integrate with the billing systems to generate bills automatically. This process not only creates a good paper trail for audits but also minimizes errors pertaining to billing.

Brazil launched its smart metering program in 2021, with an aim to introduce remote meter reading and by providing consumers with an opportunity to adjust their consumption habits by providing them with a real time consumption dashboard.

Countries like Nigeria and Kenya are also rolling out smart metering programs to improve billing accuracy and reduce their commercial losses.

Ultimately, these smart meters converge towards a “smart grid.”

In Pakistan, KE is ahead of the curve, having deployed smart meters on all industrial customers, net-metering customers and its network of pole mounted transformers.

The Asian Development Bank has lent money to Pakistan for the rollout of an Advanced Metering Infrastructure (AMIs) for XWDISCOs. In the first phase the roll-out will be restricted to IESCO and LESCO. LESCO has rolled out smart meters for small industrial consumers, whereas IESCO plans to roll out the meters from 2024.

Integrating these meters with platforms like MDMS (Meter Data Management Systems) creates links between billing and consumption monitoring as well.

The other category – known as non-billable smart meters - is installed at grid stations and on all distribution transformers across Karachi.

Installing meters at supply nodes not only helps monitor technical and commercial losses but also enables identification of network segments that are overloaded and susceptible to a breakdown, or nodes for power theft.

This “predictive” capability is critical to anticipating challenges and conducting proactive, preventative maintenance. In the future, these smart meters will also be able to provide near-real-time power consumption data to consumers via dedicated dashboards.

Ultimately, smart meters can assist in the calculation and improvement of System Average Interruption Frequency Index (SAIFI) and System Average Interruption Duration Index (SAIDI) – the two system performance indices that NEPRA relies on to gauge the performance of electricity distribution companies.

With increased visibility of its network, power companies can also consider shifting their load-shed regimes to the PMT levels, targeting interventions for areas that have a low propensity to pay their bills as against managing losses for an entire feeder that may affect regular bill-paying consumers.

Recognizing the value Under the World Bank’s “Energy Distribution & Efficiency Improvement Project” (EDEIP) three power distribution companies — HESCO, MEPCO, and PESCO — have initiated the bidding process for smart meters and transformer monitoring system (TMS).

Pakistan’s market in general can be described as “sachet economy”, where people purchase small quantities of whatever they need.

Utilities operating in regulated environments also need to keep this in mind and leverage the advanced metering infrastructure to roll out prepaid metering in areas where there is a low propensity to pay bills.

Through pre-paid metering consumers will only use the amount of electricity they pay for, this will significantly reduce consumers defaulting on their bills and will improve the cash-flow for utilities since they will collect the bills in advance.

Advanced economies and even our neighboring countries are using pre-paid metering systems, providing valuable case studies for their implementation.

Ensuring a successful smart meter rollout not only requires a lot of investment, but also requires a sensitization campaign where consumers need to be educated about the benefits of installing smart meters.

Since smart meters do not require meter readers to take readings, distribution companies would also need to develop an in-house change management plan where meter readers are trained/equipped for other roles in the organisation.

Subsequently Nepra, in collaboration with distribution companies, needs to create a unified smart metering governance policy that would provide a framework for the efficient management of smart meters and rules of operations.

These are long-term changes but will benefit the growing number of customers in every DISCO territory in Pakistan.

According to company reports, KE anticipates a 30% increase in customer base by 2030; applying the same logic to Discos will take the overall number of connections to 42 million.

Addressing their billing queries today through robust systems can enable us to scale up to a modern, fully automated grid in the future. As Pakistan transitions towards new electricity market models, such interventions must be explored in earnest.

Copyright Business Recorder, 2024