A smart solution for overcoming barriers to municipal cash flow and revenue collection

By Martin Kuhlmann – Siemens SA Technical Sales

Billions of rand in debt will accumulate and become more difficult to recover from defaulting municipalities, unless they adopt smarter and more efficient technology.

In an economy still coming to terms with junk status, next-generation advanced metering infrastructure (AMI) technology could rescue local government from crippling uncollected electricity bills, making capital more readily available to be more efficiently spent on service delivery.

Efficiently bringing power to the people is a highly challenging task in SA, and although Eskom has made tremendous strides with smart metering technology, many municipalities are buckling under the pressure of more than 150 days of debt.

This is a major contributor to the power utility’s crippling R6-billion shortfall in revenue. Punitive supply cuts to these municipalities are a necessary last resort to ensure financial stability at Eskom.

But the fact remains these communities are negatively impacted by interrupted electricity supply to their homes, schools, businesses and hospitals.
SA utilities lose between 10 and 45% of revenue to tampering and copper cable theft. AMI smart metering combined with tampering alerts lets them respond live to this threat.

The communication capability of AMI smart meters lets them send accurate power consumption data directly to a power utility via a network of application servers, enabling them to be paid immediately.

This dramatically improves revenue collection and cash flow compared to current standard transfer specification (STS) meters that are limited to manually recorded prepayment functions residing on the meter.

A large metropolitan municipality with 550,000 meters recently tested new AMI metering technology on 7,000 large power users that made up 56% of consumption. The utility was immediately able to reduce its debtor days from 155 to -15.

Another benefit of AMI smart meters is improved billing accuracy for pre- and post-payment, as anomalies like lightning surges are accounted for and consumption spikes are rectified before the user is incorrectly billed.

This eliminates the need to manually read meters and to have a large debtors’ department chasing legitimate and disputed payments.
AMI meter data management also allows for demand response, data analytics, load management, as well as integration to the likes of SCADA to help utilities to manage a smart grid more accurately and efficiently, adding to the value of its spend.

AMI smart meters also allow for the incorporation of other utilities such as water and gas into one consolidated bill that is linked to a personal user profile.

Given the substantial improvements to revenue collection and billing efficiency, AMI metering technology holds the potential to completely reinvent the African utility as we know it. Siemens is at the forefront of this digital revolution and will be hosting the global launch of its latest generation of AMI metering technology on 18 May at African Utility Week in Cape Town.