#WarOnPowerTheft Media Briefing May 15, 2014
A National Problem • 17% of the electricity produced is now lost to theft. • Approximately 200,000 illegal users. • The problem is islandwide – It cuts across geographical and social boundaries – Perpetuated by both residential and commercial users 2
Foreign Exchange Lost • At current fuel costs, Jamaica is spending J$1.3 Billion each month to import oil to produce electricity that is stolen. – This is about 18% of monthly fuel cost – It has to be paid in US$ – That’s foreign exchange down the drain
• In 2013 alone, electricity theft cost the country over J$11 Billion in stolen oil. • This cost is shared by JPS and customers. 3
Impact of Theft 1. Higher Bills: Customers share the cost of the oil used to produce stolen electricity. –
If we could eliminate theft completely, the cost of electricity could be reduced by 10 – 15%.
2. Unreliable Supply: Customers in communities with high levels of theft experience frequent power outages 3. Equipment Damage: Significant damage to customers’ appliances and equipment due to system overload.
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Impact of Theft (cont’d) 1. Fuel Penalty: JPS has to pay some of the cost of the oil used to produce stolen electricity. –
US$43 Million in 2013 (approx. J$4.7 Billion)
–
US$30 Million in 2012 (approx. J$3.3 Billion)
2. Lost Revenue: viability and ability to invest threatened 3. Equipment Damage: repeated damage to transformers, streetlight infrastructure, etc due to system breaches. 4. Cost of Fighting Theft: JPS spends up to US$30 M to fight theft each year, with little or no effect. 5
#WarOnPowerTheft
What Have We Been Doing?
What We Have Been Doing A combination of initiatives: 1. Community Intervention 2. Removal of illegal lines 3. Account Audits & Investigations 4. Residential Advanced Metering Infrastructure 5. Commercial Advanced Metering Infrastructure 6. Arrests 7
Loss Reduction Activities Loss Reduction Activities 2009
2010
2011
2012
2013
Total
CAMI Installation
762
1,306
1,752
476
880
5,176
-
8,500
6,146
8,155
7,609
30,410
RAMI Installations Audits & Investigations Strike Force (Illegal Lines) Arrests
33,843 136,873 141,295 115,841 113,733 541,585 -
-
35,773
45
63
65
98,714 198,000 332,847 76
1,200
1,341
JPS significantly ramped up our workforce and dedicated resources towards reducing Losses in the last 5 years.
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Limited Success With RAMI •
Over 22,000 users regularized, with an investment of approximately US$34M.
•
RAMI implemented in 22 communities.
•
Average cost for RAMI solution is US$1,335 per customer.
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Limited Success With RAMI •
(cont’d)
Before RAMI Intervention, average energy loss per high theft community was 75%.
•
After RAMI intervention, losses were reduced to below 10%
•
But within six months after RAMI, the average energy loss per community was up to 40%, and increasing.
•
Residents continue to find ways to breach the costly anti-theft system. 10
Challenges with Regularising The Case of Boulevard 710: Seaward / Waterhouse / Olympic Gardens: • Community Engagement: meetings, consultations, etc. • Estimated 6,400 Illegal Users • Approximately 3,200 Legal Users • 2 million kWh lost every month – An indication that these Illegal consumers are using 2 – 3 times the electricity used by legitimate customers – 42% of our customers use less than 100 kWh
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Upward Trend Continues Over the last 10 years electricity theft has increased by over 110% (from 8% to approximately 17% of net generation).
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Why the Energy Limiting Strategy? • We had tried everything else. • Losses continue to increase. • Continued resistance by persons stealing electricity • Customers paying more, suffering greater inconvenience • The viability of the Company is significantly challenged. • JPS severely compromised in our efforts to provide safe reliable service to our customers. • The country simply CANNOT afford to let this situation continue. 13
The Focus: High Theft Feeders • In the communities selected, between 70% and 90% of the electricity provided is stolen. • Objective selection: JPS measures the energy provided on each Feeder, as well as the amount paid for. • Community selection not based on demographics, but on percentage of electricity being lost.
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The Communities
Parish
Feeder
Losses Area Designation
% Electricity Theft
Kingston
LCB 6-98
Sections of Jones Town
89%
Kingston
LCB 6-88
Seaward Drive, Olympic Gardens, Bay Farm, Waterhouse, Cling Cling Ave.
86%
Kingston
Hunt's Bay 6-410 Trench Town, Denham Town, Rema
St. Catherine LCB 6-929
Central Village/Windsor Heights
70% 73%
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#WarOnPowerTheft
What’s Next?
Next Steps • We remain steadfast in our commitment to get illegal users off the grid, and reduce the impact of theft on our customers.
• Other initiatives will continue: investigations, raids, RAMI, arrests, etc. • Closer Partnership with Government and other stakeholders for sustainable solutions
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Lobby for New Legislation • Greater penalty for offenders. What others are doing: •
In India, mandatory prison sentence is given to electricity thieves.
•
In Texas, stealing more than US$1500 worth of electricity is State Jail Felony. Stealing less is a Class A Misdemeanor.
•
They have a dedicated unit in the police force - Houston Police Differential Response Team which deals with crimes like electricity theft.
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Community Empowerment • The experiences of other countries prove that successful management of theft requires a myriad of solutions, including: – stricter penalties – supportive legislation
– social intervention – partnerships with key stakeholders in society • We are exploring new and innovative partnerships with Government, communities, civic groups and our customers.
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Community Renewal Rate •
Our Proposal:
• A limited subsidized rate for the most vulnerable • To be tied to energy consumption: limited to 200 kWh • Will facilitate community development, skills training, job creation •
Everyone Benefits: – More consumers paying will translate to lower rates. – JPS will be able to continue investing to maintain the service.
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Conservation • Prepaid Service as an option to better manage usage: – Pilot starting in June – We will lobby the OUR to make it mandatory for persons who have been stealing • Conservation Education for existing and new customers.
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The Big Problem: The Cost of Fuel (US¢/kWh)
Non-fuel rate
Fuel rate
40 35
36.5
35.7
23.6
23.9
22.25
31.3
30
23.6
25
16.3
16.2
21.1
17.3
15
10.8
27.2
25.1
20.5 20
35.9
13.37
14.7
29.0
16
17.8
7.5
8.1
9.2
9.7
10.27
10.4
10.2
11.2
11.2
12.3
12.6
13.5
8.7
9.2
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
7.1
10 Year Review of Tariffs
10 5 0
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New Generation Urgently Needed • JPS believes lower priced electricity is part of the solution. • We believe we must be allowed to replace our old generation. – With the existing regulatory framework, JPS is not able to replace our aging generating units without participating in a competitive tender process.
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Let’s Talk .
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