Upload
others
View
2
Download
0
Embed Size (px)
Citation preview
By Eng. Benson Muriithi, Chief Manager, Distribution
Kenya Power & lighting Company Ltd,
March 2011
Challenges and opportunities in changing from
credit to prepaid meters: A case study of KPLC
The Kenya Power & LightingCo. Ltd.
Outline
� Vision, Mission , Strategic Pillars & Our Mandate
� Key Statistics
� Current KPLC Metering Situation & Challenges Posed
� Why Opt for Prepayment
� Pilot Project
� Choice of Prepayment Technology
� Major Challenges & Lessons Learnt
� Prepayment Rollout Plan
Mission : Powering people for better lives
Core values: Customer First; One Team; Passion; Integrity,
Excellence
Vision : to provide world class
power that delights our
customers
Vision, Mission
& Strategic Pillars
Vision, Mission
& Strategic Pillars
3
Note: Reserve margin is based on available plant under normal hydrology currently
no margin available due to poor hydrology and peak load management ongoing
Note: Reserve margin is based on available plant under normal hydrology currently
no margin available due to poor hydrology and peak load management ongoing
Key StatisticsKey Statistics
Our MandateOur Mandate
5
� KPLC owns and operates the electricity transmission and distribution system in Kenya.
� KPLC has more than 1.6 million customer accounts which serve about 8 million people; or a population access rate of over 22%. However, access of the population to electricity infrastructure is over 60%.
� KPLC’s core responsibilities include:
� Procurement of electricity from generators.
� Operation of the transmission system.
� Operation and expansion of the electricity distribution infrastructure.
� Marketing & retailing of electricity in Kenya.
� Generating electricity in some off grid stations.
� KPLC also buys from, and sells electricity to, Tanzania and Uganda.
� KPLC has diversified into fibre optic business.
Compounded Annual Growth Rate (CAGR) computed up to 30 June 2010.
Sustainable growth momentumSustainable growth momentum
Total Number Customer Accounts
Sales GWh
CAGR – 5.3%
6
CAGR – 16%
Type of customer TarrifNo. of customers
Percentage No. of customers
Energy Consumption (Gwh)
%age Energy Consumption
Industrial Customers
CI1, CI2, CI3, CI4, & CI5 2805 0.17% 3,346 50.0%
Small Commercial SC 215,285 13.32% 1,653 24.7%Domestic & Interruptuble supply DC, IT & SL 1,397,667 86.50% 1,693 25.3%
1,615,757 100.00% 6,692 100%TOTAL
Customer Classification
Current Situation and Challenges at
KPLC
Customers metered and billed based on a credit (postpaid)
metering system which poses some challenges.
KPLC Commercial Cycle Process:
DISPATCH BILLS
TAKE &
DOWNLOAD
METER
READINGS
RESOLUTION OF
ANOMALIES
GENERATE BILLS
CONSUME ELECTRICITY
DISCONNECT
DEFAULTERS
FINALISE
ACCOUNT
PDC’S
LAWYERS
YES
NO
PAYMENT BY
CUSTOMER
RECONNECT
CUSTOMER
BILL
PAID?
?
Minimum 28
Days
Min. 109 Days
Min. 49 Days
Challenges Cont . . .
Challenge Annual Cost Implication
1. Accurate reading of all meters every month USD 3.0Million
2. Generation and postage of bills USD 2.3Million
3. Long queues in the banking halls
4. Revenue collection level is only 98% of
previous month’s billing
5. Disconnection & reconnection activities USD 1.1Million
6. Commercial Losses estimated at 3% of the
total generation
USD 10.8Million
• Loss reduction;
• Improvement of customer service;
• Decongestion of Banking Halls;
• Overcome commercial cycle challenges;
• Enhance ease of bill payment.
• Demand side management.
Why Opt to Go the Prepayment Way?
Pilot Project Scope
The pilot phase entailed installation of 24,000 meters within Nairobi
• Customers in the project sites have an average consumption of less than 2,000 units per month.
• Most of the meter bypass cases are within this segment of customers; and the prepayment technology we are implementing is meant to address this vice, hence reduce commercial losses.
• There is also wide acceptance of mobile phone technology within this segment, especially the prepaid service. KPLC also intended to ride on this wide acceptance of prepaid services to launch its prepaid electricity service.
Reason for Selecting the Project Sites
Following a lot of research and attending
of conferences such as this one, KPLC
opted for STS Keypad Prepayment
System-technology, and Split Meters.
Choice of Prepayment Technology
Keypad
• KPLC’S employs use of online vending.
Challenges on ICT coverage across the country
.
• Initial project team position was to locate
vending in our existing pay points for the
learning purposes; and later to engage 3rd
party vendors at the time of doing the rollout
of the prepayment project.
Vending
CURRENT VENDING CHANNELS
• On line PC (POS) – In KPLC Offices and Uchumi Supermarkets
• Mobile phone money transfer -MPESA / ZAP (SEMI-AUTOMATIC)
VENDING CHANNELS EXPECTED TO BE INTRODUCED SOON
• Cell Phone Merchant (and full automation of MPESA/ZAP).
• SMS or Voucher/ Scratch Card
• Web/ internet Based
• Terminals
• Third parties
Vending Channels
• June 2009
Commencement of Prepaid installation by KPLC
staff
• December 2009
Bringing on board of Contractors to assist in
the installation effort
• January 2010
Completion of the installation process (25,000)
Milestones
Major Challenges & Lessons Learned
Challenge Mitigation1 Lack of capacity to change all the
credit meters to prepayment in the given project time.
Engagement of registered electrical contractors
2 Lack of sufficient convenient vending points
To be solved through engagement of 3rd
party vendors3 Prepaid customers find it difficult to
understand domestic tariff DC as applied to Prepaid. Many levies and monthly variable pass through costs
Request ERC to simplify the tariff by making it flat rate based. Also lobby Finance Ministry to exempt charging of VAT for first 200 units for all customers
4 Unreliable communication link to two Uchumi Super Market Vending Points.
Procurement of terrestrial communication links for the two vending points.
5 Slow pace of installation of pole prepaid meters due to rotten poles. Risk to installation staff.
Teamed with O&M department for prompt change of rotten poles; and also inclusion of pole change rate for the contractors to undertake this work for expediency.
Major Challenges & Lessons Learned
Challenge Mitigation
6 Emergency teams not familiar with prepaid metering technology.
Carryout a sensitization campaign for O&M emergency teams.
7 Delays in MPESA & ZAP Vending at the 24hrs Call Centre Vending Point due to the manual vending process
Automation of the MPESA vending is being pursued.
8 Delay in validation of prepaid meters upon installation due to the manual paper process.
Implementation of paperless system using works order management system and handheld sets.
9 O&M staff opening welded and
sealed prepaid meter boards and
leaving them open after carrying out
work.
To sensitize O&M staff on the
importance of reporting breached
meter board cases to RPU for purposes
of securing the same
1
0
Prepayment meters going on and off
in cases of under voltage that are
outside meters operation limits
Changed our meter specifications for
rollout phase to widen the voltage
operation level (min 120 volts)
• KPLC TENDER I – 180,200
• ESRP TENDER - 120,000
• KPLC TENDER II – 200,000
• Total 500,200
• Procurement of additional meters will be
done on a continuous basis until conversion is
complete.
Meters for Planned Rollout
• To install 100,000 meters by June 2011
• To install a total of 500,200 by December
2011
• All new customers to be attached through
prepaid meters.
• Adopt to new technology i.e. smart meters
Prepaid Installation Targets
Service level innovationsService level innovations
22
Easy Pay Products e.g. Payment of electricity bills at Commercial
Banks, ATMs, Supermarkets and Post Offices country wide
E-bill products i.e., Checking Bills via email and SMS
SMS alerts to customers for disconnections and scheduled
outages
Automatic Meter Reading for 4,200 large power meters
Prepayment Pilot project for 25,000 small to medium customers
Mobil phone money transfer: MPESA (Safaricom) & Zap (Zain)
Flat Rate Connection for Slum Areas
THANK YOU!