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World Bank Helps Fight Electricity Theft

Medium Voltage Distribution
Photo Source: Reducing Technical and Non-Technical Losses in the Power Sector - Report

September 20, 2011

Walk around a low-income neighborhood in a developing-country city and you will see tangled jumbles of wires around many electricity poles. It is evidence that some residents, either unable or unwilling to pay for power, tap into it illegally, and often dangerously. "Non-technical losses of electricity" is the jargon term for it, but it is theft, pure and simple, and the culprits are not just daring slum-dwellers, but often big companies and the well-to-do who make "arrangements" with utility officials.

Pedro AntmannMetering and billing for electricity actually consumed by users is integral to commercial management of an electricity utility. Another critical task is collection of the billed amounts. Effective performance in both functions is critical to ensure the financial viability of the company. || 
Pedro Antmann, Senior Energy Specialist, The World Bank

Pedro Antmann, a World Bank expert on electricity theft, has seen it all in his frequent travels to utilities around the world. His conclusion, outlined in a recent report: good metering. "Metering and billing for electricity actually consumed by users is integral to commercial management of an electricity utility," he writes in his study, "Reducing Technical and Non-Technical Losses in the Power Sector".

Antmann's report, cited in a National Geographic story on electricity theft, notes that such theft has "several perverse effects." Primary among these is the fact that customers being billed for accurately measured consumption and regularly paying their bills "are subsidizing those users who do not pay for electricity consumption."

To correct this situation, the report——which reviews the electricity theft situation in all regions——draws from the successful experience of countries using smart meters. Rapid advances in the technologies of remote metering, reading, and monitoring of electricity consumption, known as advanced metering infrastructure (AMI), open the door to ending corruption and theft in the electricity consumption sector. "Drastic reductions in prices of metering and telecommunication equipment is making their adoption economically feasible," Antmann writes, "starting with large consumers and gradually applying AMI to medium and
small ones."

"The effectiveness of the tool to detect and discourage theft and other unmetered consumption is enormous, as shown by the recent experience in developing countries such as the Dominican Republic, Honduras, and Brazil."

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Contributed by Christopher Neal, Senior Communications Officer, Transport, Water and Information and Communication Technology

Last updated: 2011-09-20

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