Lastly, there is a need to establish quality committee

Maintain a quality committee with regular meetings that has the function of monitoring the performance of the electricity supply and product quality indicators, in addition to following the action plans established by the business areas. This committee should encourage and ensure that quality indicators are presented or weekly to employees at hierarchical levels (from managers to electricians). Meetings and panels are used to discuss the evolution of these indicators.

Technical Support and dedicated department

An operation center and maintenance crews should be available 24/7 to manage contingencies in distribution systems. The operation center must be available 100% of the time since the maintenance crews must respond when necessary. Specific crews should also be available to perform inspections in difficult to access zones. For all regions, there must be maintenance crews to cover the entire population served, and for areas with a higher population density.

A department within the distribution company with the task of analyzing the performance of continuity and quality indicators should be functioning. This department must provide reports to executives and help other departments to direct their actions to improve these indicators. This department should have a control methodology for calculating quality indicators with certification recognized as ISO 9000. Within the scope of this area, analyses must be carried out to identify zones at risk of not complying with electricity supply and distribution service, and, if this is the case, appropriate actions must be taken. Trends in continuity of supply and (when applicable) the economic results (periodic evaluation and revision of the continuity practices are suggested) are analyzed. Lastly, the utility should engage the regulator to discuss how investments in monitoring voltage control are recognized by the authorities on the capital investment and operational costs.

Baseline and masterplan

It is essential to develop quality improvement or control plan, based on a diagnosis that identifies the baseline (current state of service quality according to the selected and standardized indicators), the specific factors that cause major supply interruptions, the location where supply quality is deficient (region, circuit, customer), the definition of quality objectives and goals, the definition of strategies to address each field of action, the formulation of projects, the definition of an implementati on schedule, the assignment of responsibilities in the organization, the criteria for evaluating the plan, and the economic and financial evaluation of the plan.

Service quality indicators should be recorded regularly and kept consistent with the methodol ogy used for the baseline definition in order for a proper evaluation of the results of the service quality-oriented projects.

As for the possible duration of a quality improvement plan, which may be defined at the sectoral level by distribution subareas, or at the level of the company as a whole, it depends largely on the initial situation and the quality investment effort, which is also closely related to investment in network replacement and modernization (the general condition of the networks may affect quality to a large extent, as well as the remuneration recognized by the regulator for preventive and corrective maintenance expenses). However, taking as a reference the recent case of Colombia, which defines a gradual improvement path of 8% per year until the target is reached, a maximum period of 10 years may be reasonable for companies with deficient indicators.

Maintenance and operation standards

The  utility  must  have  protocol s  and standards   to   perform   corrective   and   preventive   maintenance   in   the   power substations and networks. There are safety plans for contingencies regarding the quality of the supply and distribution of electrical energy. It is also recommended that a  verifi cation  of the operational  status  of  supply  and  distribution  system elements ( for which visual inspection or operational test is possible ) to be carried out at least once every 3 years , and for the strategic systems, every year.

For both corrective and pre ventive maintenance , the use of GIS tools is desirable to support isolation, repair, and resolution of contingencies , and to effectively track and  record  where  the  maintenance  is  being  made (which  can  provide  valuable planning   information   for   deployment   of   new   quality   driven   programs   and investments) . In systems with various alternative supply sources, operation center protocols  exist  to ensure supply quality  on  initial  use  of  new  supply  sou rces (sources and interconnections), as well as protocols to analyze and resolve non - compliance with applicable regulations regarding supply and distribution quality 

Structural capacity to verify that electricity distribution is adequate and there is redundancy.

The electric power distribution system must be able to supply all the electric  power demand for the different load levels and improving system redundancy is an important enhancement to increase reliability.
Electrical power supply and distribution infrastructure design is conceived to minimize impact due to contingencies, to comply with service standards(quality and continuity) and to renew supply and distribution system elements that take into account the risk of impact on service continuity. In this way, distribution network design criteria exist that  considers the quality of the supply and distribution of electrical energy. Hence, planning and operation of the infrastructure adopts criteria to prevent risk of service interruption and unintended variations in quality (voltage, frequency, capacity, and others).

In planning, the utilities must use the criterion called N-1, that is, the electricity supply must be maintained even if 1 equipment fails in the system, for some customers with high criticality, it is possible to use N-2 criteria. In the operation, with communication and metering technologies, reconfiguration, and islanding schemes of Distributed Generation  ( DG ) are possible methods that can help implement differentiated reliability.
For new assets, protocols exist to ensure the quality of electricity when integrating the new infrastructure to the system. Sometimes these new  assets require for planned interruptions, if so, it is important that customers are notified in advance to minimize the impact of power outages.
Smart meters can also provide certain quality measurements and control features, without an excessive  price  increase for customers, such as the capabilities of voltage quality monitoring.

Electricity grid resilience facing natural events

Natural events can lead to outages with prolonged load interruptions. Although such events are characterized by a high level of unpredictability, utilities have ways of reducing and mitigating their consequences. Some practices for each type of event can be used:

• Lightning strokes is one of the prime factors of unplanned supply interruptions in power systems. Some classical solutions are: (i) cost-effective equipment can be installed on the distribution and transmission lines to find the path of a lightning strike; (ii) correctly use of surge arresters to reduce the induced voltages, that is, surge arresters perform better when grounding resistance is lower, and the adjacent arresters have shorter distances; and (iii) install shielding wire to decrease the li ghtning stroke frequency on the power lines.

• Floods: A change identification method to map floods in urban areas using satellite images can be used to classify images near rivers and forecast where a new flood is likely to happen. The aim is to find the optimal hardening plan for the system resilience and the optimal functioning of the electric power system under the worst event. Some possible actions are: (i) pre-allocation of mobile energy generators; (ii) replan the optimal switching locations using distributed energy resource locations; and (iii) r eview the current power grid to feed critical clients .

• Hurricanes: These events result in a forced reduction in load because of distribution equipment damage . In this situation some solutions are: (i) i nvest in an operation using microgrids concepts in a distribution system to increase the self - healing ability and enable the distribution system to restore sooner during outage occurrence . Also consider the possibility of integration of distributed energy resources in microgrids ; (ii) u se proactive scheduling in response to imminent hurricanes in multiple energy carrier microgrid; (iii) a self - healing methodology by sectionalizing the distribution system into microgrid after the occurrence of a natural disaster can be used; and (iv) d uring hurricanes, develop a method to alleviate the cascading effect in transmission networks using a risk - based preventive islanding method .

• Windstorms: can cause equipment failure when hitting the power grid. To mitigate such effects, utilities must carry out customized projects for transmission and distribution lines for regions with a higher incidence of these events. In the first stage, empirical models are created based on historical and weather data. The second stage involves the real - time tracking of windstorms. During the design of new or assessing the old transmission lines, an acceptable level of compromise between cost and probability of failure must be maintained. In addition, it is possible to establish a framework for microgrids proactive management to coordinate demand-side resources, secure voltage regulation, and generation rescheduling.

• Wildfires: can cause intense temperature, leading to an explosion of transformers and changing dielectric and mechanical properties of T&D lines. Some possible solutions are to : (i) substitute oil-immersed transformers with dry types; (ii) a pply real-time transmission line monitoring to identify the dynamic line rating during normal or contingency cases; (iii) use a cost-effective fire detection mechanism with different technologies; (iv) use distributed framework of multiple unmanned aerial vehicles to avoid humans from dangerous dynamic fire tracking . It reduces the operational cost, correctly tracks the fire progress, avoids in-flight crashes, and collaborate well with nearby vehicles.

Integration of Distributed Energy Resources

The use of new distributed energy technologies (PV systems, fuel cells, energy storage, and electric vehicles) connected to the grid requires improvements in all interconnection standards to define the requirements that these technologies must need for safe and reliable integration with utility electrical networks. These standards address issues such as power quality and voltage limits and maximum power to be connected. For example, in many countries, local regulations will provide for these procedures, however when this does not occur, countries can use IEEE references such as IEEE 1366 and IEEE 1547 and technical studies. One relevant example is the New Grid Code in Colombia (currently under revision) which considers an important integration of intermittent generation to the national system (not for DG). The study contracted by the Regulator (CREG) proposes different rules in fields like protections ( fault protections ), fast frequency response, and quality of the voltage waveform, for which it is proposed to update the current requirements considering the incorporation of power electronics of wind and photovoltaic farms (FACTS-Flexible AC Transmissions Systems , EES – E lectrical Energy Storage, and in the future HVDC–High Voltage Direct Current ). As far as DG integration is concerned, the connection to the grid must comply with the voltage standards set by the competent authority or the utility for the transmission and distribution system, to avoid negative technical effects on the grid in aspects such as voltage regulation, power flow reversal, thermal limits, short circuit currents, protection coordination, power quality and island operation. Additionally, a generalized opinion is that the integration of distributed generation should be done in stages (such as a moderate stage for the existing grid, full integration, and development of localized markets).

In this context, best practices consist mainly of :

• Carry out specialized technical studies to determine the appropriate technical standard for system capacity availability. For example, in Colombia it was set at a maximum of 15% of the capacity of a circuit.

• Carry out periodic studies to update these standards based on the development of the grid and the incorporation of distributed generation.

• Define and implement adequate procedures to promote the integration of distributed generation. For example, the publication and permanent update in the official Internet portal of the available capacities in each circuit and the connection requests in process, accepted and installed generation; the adoption of standardized formats to submit the connection request, the steps of the process and response time limits.

Quality indicators selection and standardization

Appropriate indicators that allow  for  a  proper tracking  and  control of  quality  evolution  over  time must  be defined. The commonly used indicators that have already been mentioned (SAIDI, SAIFI, etc.) serve as a reference . Even though the use of diverse quality indicators within distributors’ operation for management and planning purposes is a common practice and may already be in place , the definition of common and standardized indicators  within  a  particular  country  or  regulatory  framework  allows:  (i) for benchmarking  and  performance  comparison  among  peers;  (ii) to incorporate specific criteria in the indicators’ calculation that may be relevant within a particular context ; (iii) to define mid to long term policy objectives; and (i v ) to calibrate and track  performance  for  the  application  of  financial  incentives within  a  common regulatory framework.

Performance standards

Refers  to  the  level of quality  a  company  (or  a  group  of companies) is expected and/or required to provide. The definition of performance standards must take into account conditions that are inhe rent to each system ( i.e., topology, weather phenomena, etc. ) and can sough to be achieved gradually over time.

Even  though  quality  indicators  and  performance  standards  are  most  commonly reported and  tracked  at  an  aggregate  or  average  level  (i.e. , annual  SAIDI  of  a company, average SAIDI in a country, etc.), they can also be specified for groups of end users depending on their importance or prioritization. For example, a SAIDI indicator  or  30  hour s  for  a distributor means , that  on  average,  a  client  will experience 30 hours of electricity supply interruptions within a year, however, the average value most probably conceals the fact that there are a set of customers that  experience supply  interruptions  totaling  way  over 30  hours in  the  year . The previous example reveals that even though a distributor can on average improve its  quality  indicators, it  is  not  necessarily  making  improvements  for  the  users experiencing the worst service quality within the network.

To  cope  with  th is issue ,  the  concept s of individual  quality and worst - served customer (customers whose service quality is below a certain threshold relative to the average service quality ), may be used . P erformance standards can therefore be set a t an individual level or for a group of customers. Service quality monitoring and  analyses  must consequently be  done  at  a  much  lower  disaggregation  level (i.e. , circuit level) 

Public database and end-user information

It is especially important that  the regulatory or control authority establishes a periodic public information system , and the obligation to inform in the monthly billing the quality that is required , as well as the one that is being supplied. This incentivizes the distributor to im prove results , provide transparency and enable follow - up by consumers 

Financial incentives

Distributors may receive a positive, or  negative, incentive that adds, or subtracts, to their income depending on service performance. For example, performing abov e the required standard may allow for an increase in the distributor’s remuneration. I ncentives can be applied through the correct definition of quality indicators and performance standards, and the ir proper calibration ( i.e., positive and negative incentives must be  aligned with the economic impact an increase or decrease in quality may represent).

Moreover, i ncentives may be determined to apply and be monitored according to the average performance of a quality indicator (average performance of SAIDI, SAIFI, etc.), depending on the performance of individual quality levels (quality of the worst-served customer), or both. For example, if a distributor is making progress in its average quality of service performance, it can be subject to receive a higher income, but if at the same time the worst-served customers have not experienced an improvement in service quality, the distributor must pay an economic compensation to the worst-served customers (i.e. , by charging a lower energy tariff until service quality is improved for this group of customers).

Considering that electricity supply quality may be highly dependent on external factors (i.e. , weather conditions or natural events in a particular year affected grid performance), upper and lower performance standards thresholds should be considered. In this way, distributors can operate within acceptable boundaries within which no positive or negative financial incentives are triggered.

Technology deployment

The implementation of new digital devices, communications and control systems can help utilities improve their quality of service. Utilities are deploying advanced technologies to plan, manage, and control electricity delivery to enable safe and reliable two-way flow of electricity and information, support growing numbers of distributed energy resources, and support customers participating in electricity markets as power suppliers and demand managers. These devices include for example phasor measurement units (PMU) and specific technology to track and record outages, such as eReliability Tracker Software or supervisory control and data acquisition ( SCADA ) . For example, PMU technology can detect low-frequency oscillations that were missed by SCADA systems, allowing operators to act and prevent widespread disturbances.

To help the technical indicator management process, it is recommended that the utility collect and assess disaggregated interruption data, for example by voltage level and by cause, in order to better identify priorities for practices and network interventions. In the same way individual information on and verification of voltage quality upon user request is carried out at the initiative of the company. DSOs collect information on the number of customer’s voltage complaints, number of resolved voltage problems and publish these on a regular basis.

Utilities should have a protocol for self-supplied electric power quality control as do records of the findings, applying criteria at least as stringent as those set by the regulations. Records are kept of operation parameters measured in all power substations. Remote control systems are available to manage processes and internal parameters of power substation, alarm thresholds exist for corrective maintenance and operation adjustment. Automatic electrical power quality monitoring stations are available at the outlets of the power substations.

Investments to reduce SAIDI and SAIFI

In general, new investments in power systems seek primarily to meet the increased load of customers, however it is important to seek investments that are directed exclusively at reducing the outage duration and/or number of cus tomers affected for specific outages, such as:

• Install an additional fuse: all outages that are related to a specific location have a probability of reducing the number of customers affected.
• Install sectionalizers: It can isolate faulty portion of distribution line and return service to the circuit.
• Replace a fuse with a recloser: has a high probability of reducing the duration of all outages related to the fuse that is replaced and causes such as lightning, trees, birds, etc.
• Place short distribution lines underground: all outages on this feeder with most causes (e.g. , lightning, trees, traffic accidents, etc.) are removed (the utility can select just some areas for this step)
• Add bird spikes / reflectors: all outages related to birds have a high probability of being reduced.
• Add a barrier to prevent car accidents from causing outages: outages at the location a barrier is added have a probability of being removed.
• Increase the utility spending on media outreach to improve awareness and response time: the duration of outage has a probability of being reduced.
• Install electric energy storage (EES) in rural communities or distant from urban centers, where the installation of cross connects are not economic or even feasible and so maintaining an allowable level of SAIDI.

There is no standard or cost benchmark for quality improvement plans because it depends on the particular case of each company in aspects such as topology ( for emaxple urban-rural topology, radial or redundant networks), network status and indicators in the different regions where service is provided. Depending on the current quality of service level, and on the type of incentives for poor or good quality, the company must carry out a financial evaluation of the investments to define the optimal strategy. For example, in certain radial networks, the definition of the optimal number of reclosers to be installed depends on this analysis.

Engineering

The engineering team, in addition to seeking innovations and new technologies, must also be constantly improving current processes, such as:

a) Substations and powergrids Design: It is important to standardize the design of electrical networks and substations, because this can minimize effort and time in new projects and it will also help to standardize maintenance and operation plans that can be executed consistently at minimum cost.

b) Manufacturer: it is recommended that the manufacturer may be asked to provide maintenance services for warranty period. This will ensure single point responsibility for manufacturing and maintenance issues. The costs associated with an annual maintenance contract may be included in the initial cost of the equipment.

Performance Contracts

The use of companies that perform engineering and support activities is encouraged, and the contracts established must have their payments conditioned to performance indicators (execution time, technical indicators, energy efficiency, and others). For main activities, it is also recommended that outsourced companies be used to establish an efficient cost benchmark between activities developed internally and by third parties. In general, there are three types of contracts that are used:

a. Full-Coverage Service Contract: A full-coverage service contract provides 100% coverage of labor, parts, and materials as well as emergency service and preventive maintenance. The Contract must be measured and paid for the performance of the equipment for which it is responsible. This type of contract is recommended for areas where the company has low coverage or for the most critical equipment. Full-coverage contracts are usually the most expensive type of agreement in the short term. In the long term, however, such a contract may prove to be the most cost-effective, depending on the owner’s O&M objectives. Advantages of full-coverage contracts are ease of budgeting and the fact that most of the risk is carried by the contractor. However, if the contractor is not reputable or underestimates the requirements of the equipment to be insured, the contractor may do only enough preventive maintenance to keep the equipment barely running until the end of the contract period.

b. Full-Labor Service Contract: A full-labor service contract covers 100% of the labor to repair, replace, and maintain most equipment. The owner is required to purchase all equipment and parts. Some preventive maintenance services can be included in the agreement along with minor materials. This can be the second most expensive contract regarding short-term impact on the maintenance budget. This type of contract is usually advantageous for medium or big companies who can buy in bulk and obtain equipment, parts, and materials at reduced cost. For small companies, cost control and budgeting become more complicated with this type of contract, in which labor is the only constant. Because they are responsible only for providing labor, the contractor’s risk is less with this type of contract than with a full-coverage contract.

c. Preventive-Maintenance Service Contract: The preventive-maintenance contract is generally purchased for a fixed fee and includes several scheduled activities. Generally, the contractor provides the materials as part of the contract. The contract may or may not include arrangements regarding repairs or emergency calls. This type of contract is recommended only for specific situations, such as substations and special equipment (voltage regulator, capacitor bank, reclosers, etc.). The main advantage of this type of contract is that it is initially less expensive than either the full-service or full-labor contract and provides the owner with an agreement that focuses on quality preventive maintenance. However, budgeting and cost control regarding emergencies, repairs, and replacements is more difficult because these activities are often done on a time-and- materials basis. With this type of contract, the owner takes on most of the risk. Without a clear understanding of preventive-maintenance requirements, an owner could end up with a contract that provides either too much or too little.

Accounting and Economic Analyses

Individual annual accounting analyses are carried out for operating and maintenance costs as a whole and for system. Also, individual monthly accounting analyses are carried out for main system facilities, these comprise, at the very least, the technical service units, customer service, units/crews of new investments and corrective maintenance. For these evaluations, individual and segregated accounting analyses are carried out for the main components of these operating costs.

Rates of return: Achieving a rate of return is an important aspect in ensuring that company activities are operating like comparable businesses. In cost management, setting appropriate rates of return for each separate line of commercial or technical activity is an important factor to avoid cross-subsidization. Only projects and initiatives with a reasonable rate of return can be executed. For SOEs, its productivity should be benchmarked with similar business activities in the same industry and private companies. For this evaluation minimally the following criteria must be used for new projects: (a) simple payback; (b) return on investment; (c) net present value; and (d) life-cycle cost.

Procurement

Procurement policies and procedures must be competitive, non-discriminatory and maintain high standards of transparency and technical quality. To this end, in general, companies tend to always choose the same providers, as this results in traditional economies of scale. However, it is important to have a mechanism that encourages the search for new suppliers, albeit on a smaller scale and with less capacity to meet the needs of the company, as a way of seeking solutions in the market. Some practices can help optimize operating and maintenance costs:

a. History: for new procurement, the qualification and choice of the vendor must be based on the past history of the supply of material and services.

b. Evaluation: Tender evaluation using Weighted Average Criteria, the evaluation should be done based on both technical and commercial terms.

c. Inspection: (i) after purchase, trial order is given to the new vendors; third party inspection of factory may be arranged by the utility; (ii) the regular supplier may also be inspected during the manufacturing process by the third party; and (iii) each equipment from the factory should be inspected at the store for physical damage.

Cost Efficiency, transparency, and optimization

Characterization of all the processes necessary for the activity of electricity distribution, with description of the main activities of each one of them. These processes and activities are all those that imply direct action on consumers or facilities, such as activities in the regular commercial cycle, customer service and technical service, and operation and maintenance activities for electricity distribution facilities. For each of them, it is important to establish the efficient cost associated with each of the processes, using market prices as a reference, considering the price of contracting its execution or provision in the market when there is reasonable competitiveness. In cases where the market was not sufficiently developed, efficient cost was calculated based on the definition of the main tasks that make up the activity (materials and services).

Transparency: The rationale and objectives of performance budgeting are clearly documented and reflect the interests of stakeholders. Identifying the costs of any given function of commercial and technical activity is essential. For SOEs, the major issue is accounting for costs associated with fulfilling public service obligations (if applicable). If public service obligations are subsidized by the public purse, costs should be identified in a transparent manner to ensure neither overcompensation nor under-compensation. Some recommendations include transparency disclosing in proportion of shared costs with public purse; proportion of shared costs and assets that are attributed to commercial activities, when non-commercial activities are not conducted separately. The degree of subsidies disbursed by the State should be made transparent.

Operating Cost optimization is included in the infrastructure and equipment design phase and when planning facility operation and operation of the system. There is a plan to reduce operating unit costs and it includes annual objectives and monitoring of their fulfilment. Some actions can help reduce or control more routine operating costs:

a. Productivity: The company must have a system of control and management of productivity and production of crews working in the field based on the production performed. It is recommended to use concepts adapted from the OEE (overall equipment effectiveness).

b. Life cycle: It is necessary to check if the service life of the equipment operated below the life cycle established by the manufacturer and to investigate the reasons for this occurring.

c. New Asset: It must be constantly analyzed whether the maintenance and operating costs of equipment with a long-life span are not exceeding the cost of acquiring new assets.

Performance-informed budgeting

It is important to promote the use of performance indicators in budgetary decision making, that is, the use of the estimated budget must be linked to technical and commercial indicators that measure the investment objectives and costs used. Processes whose indicators are within the target must be prioritized in the allocation of the budget, while processes in which performance indicators are below the target must be constantly reassessed. The main results of this practice are: (i) improving the setting of objectives and the monitoring of performance; (ii) emphasis on planning; (iii) improving management, transparency, and efficiency. Performance budgeting is useful to improve performance orientation, including program evaluation and spending reviews.

Maintenance

The maintenance activity must be considered not only from technical aspects, but also the costs of realization and the costs of non-realization must be evaluated. Utilities can use a new methodology Reliability Centered Maintenance to optimize maintenance resources and to develop maintenance plan for distribution networks and substations. Some practices for utilities to have in place are:

a. Computerized maintenance management system (CMMS): Utilities use a management software that performs functions in support of management and tracking of O&M activities, with some minimal functionality such as work order generation, prioritization, and tracking by equipment/component, historical tracking of all work orders generated, tracking of maintenance activities, storing of maintenance procedure and of all technical documentation or procedures by component, real-time reports, calendar or run-time-based preventive maintenance work order generation, capital and labor cost tracking by component and others;

b. Training and standards: There is an annual training and recycling plan for maintenance crews. It is defined the reporting requirement for O&M activities and its frequency, also there are Operations and Maintenance Manual including written operations procedures and preventive maintenance work procedures and checklists.

c. work orders: All types of work to be performed must be created in the system like a work order. The work orders can be into one of two categories: planned work and unplanned work. Work orders must have the minimum information to guarantee the safety and quality of the work, such as: Geographic location, reference equipment, standards, contact of the Operation Center, and among others.

d. Management of field work: Remote dispatch should be used and dynamic dispatch of crews to reduce travel time and improve response to emerging jobs.

e. Human Resources Management: It is important to reduce the non-productive time of the crews (late out, early return, extended breaks) to optimize field force utilization. In addition, processes should be created to use field forces to close work plans when completing work, eliminating additional administrative costs;

In addition to these practices on the maintenance process, it is also important to highlight that maintenance can be performed reactively in emergency situations (corrective maintenance) or planned to act preventively (preventive and predictive maintenance).

For preventive maintenance some recommended practices are:

• Job Planning: Every activity must have a planning stage that must be carried out in advance and, if possible, by different personnel who will carry out the activity. The plan must contain all the necessary resources: materials, equipment and labor.

• Job Scheduling: optimize work schedules over a period of several months, smoothing peaks/valleys for equipment and labor, minimizing the impact of limited resources;

• Workstations: Jobs: It is important to work with a plan considering several workstations in different regions. This improves flexibility for resource sharing, rather than artificially restricting labor and equipment to a single operations center or territory;

• Supply Chain: Look for an improvement in the materials staging to eliminate the impact in other stages of the process. The supply chain should never "command" the all operation.

• Resource Availability: All resource options (contractors or employees) should be considered based on demand and cost. When the workload associated is constant, it is an ideal task to outsource work with a fixed amount.

For corrective maintenance some recommended practices are:

• Trend: It is possible to check the volume trend of this work in recent years to realize that the volume can be predicted based on environmental events. As such, model work plans must be created and made available for application in this work, minimizing planning and maximizing standardization.

• On-call staff: It is necessary to maintain a minimum number of crews, of different types, available in the regions with the highest incidence of events or the highest density of consumers.

National and State political support

Obtain political support with government authorities and promote awareness for the introduction of a program. Successful programs have usually been associated with a preponderant role of government authorities to tackle the challenge, where public utilities regularly report progress to senior government authorities.

While this is not a direct action by the distribution utility, political support is key to reducing electricity losses in particular with large commercial and industrial customers. In some cases, a dedicated and transparent budget is established to manage the transition of certain residential customers with low consumption. Some countries have provided this support in the form of targeted subsidies to customers with low consumption (such as less than 100 kwh/month). This budget support to targeted customers needs to be properly estimated and defined its duration.

As part of proactive activities, the utility can make in collaboration with the government is to foster development and implementation of energy efficiency standards: promote new materials and construction standards with local and national governments, such as the use of solar heating, thermal insulation of roofs and natural and efficient lighting.

Infrastructure plan

Establish a dedicated infrastructure investment plan in the distribution network and secure resources to reduce vulnerability and adulteration of equipment and connections. Provide modern meter facilities with monitoring facilities and an engineering sector in charge of technically analyzing the technical losses of the system and seeking new technical solutions. The plan should also have a well-established technical loss calculation and quantification methodology based on internationally recognized references or existing national regulations. One of these methodologies10 to evaluate the cost of loss is provided by “Guide for the Evaluation of Large Power Transformer Losses” and its reference is provided in the next section. Verify the current cost of losses and analyze possible solutions to reduce prioritizing the actions with the highest return for the company, investing in those with a positive net present value (NPV).

Identifying and securing financial resources have been critical conditions for the successful development of an electricity loss program. These financial resources, ideally with concessional terms, would ensure availability of investments over time and clearly established targets. The program would also determine the destination of the additional income resulting from the regularization. Any loss program must be preceded by an economic and financial analysis; and have specific sources of financing for projects and/or supported by public agents in the country. These investment resources can be from multilateral banks with advantageous commercial conditions and long-term amortizations, or from the utility’s income and balance sheet.

Commercial systems

Strengthen access to and functionality of the commercial systems. Experience has shown the importance of making regular checks of personnel that have access to the company’s business and billing systems, as well as performing analysis of the data stored in the Customer Management System (CMS). Access to the billing systems and database of customers should be limited as much as possible within the utility, which should carryout regular audits and verification of who has access to what part of the billing system. Utilities have also to ensure their billing systems and collection mechanisms are properly functioning and the rate of overdue bills are within reasonable limits of the account receivables. Whenever possible integrating their CMS with the Network Information System (NIS) so that customers can be automatically associated with a transformer, meter, and location. The commercial systems should also reflect in transparent manner the support mechanism introduced to socially disadvantageous groups, and this is described next in the social participation practices

Segmentation of the losses among the residential, industrial, and commercial customers is an important activity to be performed early on as part of the study. This is because losses in the industrial and commercial customers are usually concentrated in few customers with high volume, compared to the residential section which is large number of customers with small volume.

Investment technologies

Prioritize investments in technology and smart metering technologies. Investments made to deploy technology tools such as Automated Metering Infrastructure (AMI) or Automated Metering Reading (AMR), supervisory control and data acquisition (SCADA), modern business systems, database management, user access authorization, and exception analysis should be prioritized. These investments should be preceded by cost-benefit analysis that justifies them and demonstrate their contribution to the loss reduction program. Having a system focused on combating non-technical losses and integrating the information available from the client are important steps for the utility to move towards digital transformation, including introducing business intelligence (BI) with tools and resources to perform BI/analytics to identify consumers or transformers with non-commercial losses.

(i) proper asset management processes, having an annual procedure that avoids the misuse of transformers (with very low or high loads), electrical networks, network sectioning, load balancing and the installation of capacitor banks to reduce technical losses.

(ii) having shielded network and measurement system as the application of shielded measurement box with attached telemetry (multiple meters/clients) that prevents clients from accessing meters with remote disconnection, as well as shielded LV networks. Also includes anti-theft network configurations using twisted cable in secondary network and bi-coaxial cable in the service drop, which are difficult to tap9 ;

(iii) having totalizing measurement in the transformer in pre-selected transformers and feeders. Install a totalizing measurement set to collect monthly readings and determine the energy consumption with the monitored period to determine potential energy loss sites, and

(iv) using GIS/mapping systems as these tools help reduce assumptions for loss calculations, develop more precise engineering models, and have more accurate results when sampling is not possible.

Organization

Establish unit dedicated to losses within the utility. Most programs are accompanied by an activity to strengthen the organizational capacity of the utility, helping to structure a unit responsible for losses and providing the necessary skills and competences. The composition of the unit should be multidisciplinary, and it should have autonomy given by senior management with proper governance arrangements. The unit will provide periodic monitoring and reporting of the energy loss program against key metrics. In some countries, best practices have also identified the benefit of having dedicated teams for losses in the regulator and ministries.

Baseline and master plan

Establish a baseline and quantification of the losses as part of a diagnostic to be followed by specific study. Utilities need to develop a baseline distinguishing and calculating technical and non-technical losses and their evolution over time with a definition of “as is” – the present situation and starting point. The quantification would be expressed in technical and monetary terms. Due to the seasonality impacts, the baseline should be based on minimum of a full year and possible two-year information. Ideally this study should be done by specialized and independent firms with the support of the operational team of the utility. The reference and annex sections present information on the different methodologies a utility can use to estimate its losses.

After establishing the baseline, the utility needs to develop a detailed study with a roadmap establishing and prioritizing the activities needed for the reduction of technical and non-technical losses. The study itself must establish a short and long-term action plan with the necessary investments, the origin of the losses (types of consumers and geographic location if possible, with Geographic Information System (GIS), the commercial system database, the tools to be used (hardware and software), the goals by period, and a responsible and dedicated team. These activities are described next in more details

Regulatory and normative aspects

Take into consideration regulatory aspects. Utilities can engage the regulatory authority to ensure the proper incentive mechanisms to unlock reductions in losses are in place. This includes the discussion with the regulators to identify impacts in the calculation of electricity rates in such a way as to allow affordability to the most vulnerable population. Also, it is important to review if supply or grid codes are incentivizing loss reduction.

In addition, and in collaboration with the regulator, the utility should consider the compatibility of the incentives, as these have been determinant factors for the reduction of losses . These include: (i) establish rate loss limit. A non-technical loss limit value can be attributed to the rate, since the company will not be able to absorb all the economic loss, but it will have incentives to reduce it (decreasing limit); (ii) define the loss limit: determine the regulatory levels of non-technical losses through a comparative analysis, which considers the level of economic and social complexity in the region; and (iii) facilitate technical regularization: in low-income consumers with fraud, allow it to be possible to technically regularize this situation by supplying a standard kit, the cost of which could be financed in installments to be collected in future energy bills.

Engagement with local authorities

Promote awareness and establish partnerships with local control authorities such as local police and law enforcement to take prompt action in the event of theft when amicable and commercial resolution is not possible. These actions are particularly important on commercial losses in the industrial and large commercial segments as a few clients can represent a large value of the losses. Utilities should enforce compliance with the law and its judicial processes in the cases and consider executing criminal proceedings for theft or fraud of electricity. The collaboration with local authorities must be adequately documented and transparent.

The introduction of informational campaigns to improve visibility of the program and the payment culture is also an effective measure. The utility and authorities can promote journalistic coverage in actions to combat non-technical losses to positively influence the culture of paying the energy bill. It is also important to give visibility to the authorities of the economic impacts of losses, reinforce transparency, and bolster the aspects of zero tolerance to mal practices.

Community Engagement and Social Considerations

Social participation as part of a soft initiative with the impacted communities, their leaderships and population, with analysis and mitigation of social and affordability impacts. Building a positive engagement with the local community is a key ingredient to the sustainability of an electricity loss program. This engagement must be established with the official and non-official leaders of the community and addressing their concerns when implementing the program. In some cases, having the support from Non-Government Organizations (NGOs) can also deliver effective results as these organizations can have proximity to the communities.

As part of the social initiatives, these other items should be considered:

(i) verify affordability and facilitate access to credit by promoting financing for the purchase of appliances or solar heating systems. This can also be associated with energy efficiency or conservation initiatives on household items, in particular during peak time consumption. Repayment of financing could be associated with the reductions on the value of the electricity bill.

(ii) strengthen the ability to pay of communities by promoting new sources of income in poor communities and / or a policy of discount on the energy bill (e.g..: exchange of recycling material in exchange for discounts, training courses and among others).

iii) introduce “motivational” products which is the creation of products that encourage consumers to pay their energy bill, such as insurance, prize draws, discounts on medicines, or discounts on household products and food, and

(iv) consider introducing prepaid systems as advance payment is one of the most efficient means of enforcing the budget constraint and reducing possible noncommercial losses

Ecosystem of services and providers

Establish a training program and management of the contracted crews to observe their ethical behavior with monitoring of service providers. Eventually incentives or penalties for service providers can be considered. Carry out specific training for all professionals involved in the activity and draw up an annual plan to improve design of the training program and verify its effectiveness. In addition, seek uniformity by conducting talks on the operational bases to unify and standardize the inspection procedure and best practices.

Consider establishing partnership with local inspection companies, promoting the creation of micro-companies made up of people from the community to carry out local inspection and customer orientation, whose payment is a fixed value, maximum value according to the percentage reduction of non-technical losses and percentage of prompt payments.

New Technology

The engineering team should always look for new equipment and materials that, in addition to meeting the technical criteria, also minimize its operating and maintenance costs. The main elements and innovations available in power systems can be optimized from this perspective:

a. Transformer/Substation: Indicators and monitoring devices are installed for the monitoring the internal condition/unmanned operation of the distribution transformer/ substation and remote monitoring and operation is through the 3G/4G/GPS system.

b. Smart Meter: A 3G/4G/GPS based metering system may be installed on the main equipment and transformers. The meter should measure, monitor, and record the different system parameters. The meter can continuously monitor the performance of the equipment and give signal to the operation center through communication channel in case of abnormal behavior.

c. Distributed Generation and Electric Vehicles: New players that can interact with the power grid may initially represent an increase in the costs of the utility, because new equipment will be necessary to adapt them, however the company must seek ways to encourage the installation and use of such devices in places where they can provide some benefit such as reducing the level of losses.