REVENUE PROTECTION AND NEW TECHNOLOGIES

1. REVENUE PROTECTION AND NEW TECHNOLOGIES IURPA JUNE 2002

2. BRAZIL OVERVIEW 8,500,000 SQUARE KILOMETERS AROUND 62 ELECTRIC UTILITIES AROUND 188 MILLION INHABITANTS AROUND 51 MILLION CUSTOMERS NEW COMPETITIVE ENVIRONMENT DEREGULATION (VERY SIMILAR TO THE UK) Introdução • Informe o motivo da discussão • Identifique-se IURPA JUNE 2002

3. NON-TECHNICAL LOSSES • TOTAL (TECHNICAL AND NON-TECHNICAL) LOSSES: BRAZIL AVERAGE 18% • NON-TECHNICAL LOSSES: FROM ABOUT 0.5% UP TO 28% (DEPENDING ON THE UTILITY) • TOTAL NON-TECHNICAL LOSSES: 1.4 BILLION US$ / YEAR IURPA JUNE 2002

4. BRAZILIAN ELECTRIC GRID SYSTEM • WE USE ABOUT 13% OF THE TOTAL ENERGY USED IN THE U.S.A. • 95% OF OUR ELECTRIC ENERGY COMES FROM HYDROELETRIC POWER PLANTS • OUR NATIONAL ELECTRIC SYSTEM IS INTEGRATED IURPA JUNE 2002

5. WE EXPERIENCIED SEVERE ELETRICITY RATIONING (OUR RESERVOIRS WERE ALMOST EMPTY IN MAY 2001) • ACCORDING TO THE RATIONING RULES ALL CUSTOMERS HAD TO REDUCE CONSUPTION BY A MINIMUM OF 15% UP TO 25% DEPENDING ON THEIR PRINCIPAL ACTIVITY 2001 ELECTRICITY RATIONING IURPA JUNE 2002

6. AFTER AN INCREDIBLY GOOD SEASON OF RAIN, RATIONING IS OVER • UTILITIES HAVE HAD HEAVY REVENUE LOSSES DUE TO: • SPECIAL DISCOUNT FOR LOW INCOME PEOPLE WHO HAD DECREASED THEIR CONSUMPTION • CUSTOMERS HAD TO REDUCE CONSUMPTION BY A MINIMUM OF 15% UP TO 25% (OF THE PREVIOUS YEAR’S AVERAGE) 2001 ELECTRICITY RATIONING IURPA JUNE 2002

7. UTILITIES HAVE HAD HEAVY REVENUE LOSSES • THERE WERE HEAVY PENALTIES IF CUSTOMER CONSUMPTION WAS GREATER THAN THE LEVEL ALLOCATED BY THE RATIONING RULES 2001 ELECTRICITY RATIONING IURPA JUNE 2002

8. NON-TECHNICAL LOSSES INCREASED RAPIDLY DURING 2001 MAIN CAUSES: • HEAVY PENALTIES IF CUSTOMER CONSUPTION WAS GREATER THAN THE LEVEL GIVEN BY THE RATIONING RULES IURPA JUNE 2002

9. NON-TECHNICAL LOSSES INCREASED RAPIDLY DURING 2001 MAIN CAUSES (Cont.): • CULTURAL ISSUE:STEALING FROM THE UTILITIES IS OFTEN CONSIDERED NORMAL AND RIGHT (ALTHOUGH ACCORDING TO BRAZILIAN LAW IT IS A CRIME) IURPA JUNE 2002

10. REVENUE PROTECTION AND NEW TECHNOLOGY MOST OF THE REVENUE PROTECTION DEPARTMENTS DO NOT HAVE SPECIFIC EQUIPMENT AND/OR COMPUTER TECHNOLOGY TO HELP IDENTIFY GENERAL PROBLEMS IURPA JUNE 2002

11. REVENUE PROTECTION AND NEW TECHNOLOGIES:SPECIAL DEVICES A WAY TO IMPROVE THE SAFETY CONDITIONS, EFFICIENCY AND EFFECTIVENESS OF OUR INSPECTION TEAMS • CHECK METERS WITH REMOTE RADIO READING SOME UTILITIES ARE USING IT REGULARLY VERY USEFUL AND RELIABLE GIVES THE EXACT QUANTITY OF ENERGY BEING LOST IURPA JUNE 2002

12. REVENUE PROTECTION AND NEW TECHNOLOGIES:SPECIAL DEVICES A WAY TO IMPROVE THE SAFETY CONDITIONS, EFFICIENCY AND EFFECTIVENESS OF OUR INSPECTION TEAMS • BY-PASS DETECTORS STILL UNDER TESTING GOOD RESULTS IN SPECIFIC CASES IURPA JUNE 2002

13. REVENUE PROTECTION AND NEW TECHNOLOGIES:SPECIAL DEVICES A WAY TO IMPROVE THE SAFETY CONDITIONS, EFFICIENCY AND EFFECTIVENESS OF OUR INSPECTION TEAMS • INTERNAL VISION CONDUIT DEVICE GOOD RESULTS MAINLY BECAUSE MOST OF THE FRAUDS ARE METER BY- PASSES IURPA JUNE 2002

14. REVENUE PROTECTION AND NEW TECHNOLOGIES A WAY TO IMPROVE THE SAFETY CONDITIONS, EFFICIENCY AND EFFECTIVENESS OF OUR INSPECTION TEAMS IURPA JUNE 2002

15. REVENUE PROTECTION AND NEW TECHNOLOGIES AUTOMATION OF THE DISTRIBUTION COMMERCIAL AND ENGINEERING PROCESS VERSUS REMOTE METER READING ONLY IURPA JUNE 2002

16. ETR = Remote workstation SX403= ModuleREP = Repeater RCW= Central IURPA JUNE 2002

17. 120 A Relays IURPA JUNE 2002

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19. MAIN FEATURES • VOLTAGE MANAGEMENT - DEMAND SIDE MANAGEMENT • DIFFERENTIATED TARIFF - MONOMIAL / BINOMIAL - LOW VOLTAGE CUSTOMERS • LOCAL CENTRALIZED READING • REMOTE CENTRALIZED READING • LOCAL CENTRALIZED CUT OFF AND RECONNECTION • REMOTE CENTRALIZED CUT OFF AND RECONNECTION IURPA JUNE 2002

20. MAIN FEATURES (cont.) • LOW VOLTAGE CUSTOMERS LOAD CURVES • SOCIAL CUT OFF / VARIABLE ADJUSTMENT OF THE LOAD CURRENT MANAGEMENT • LOW VOLTAGE TRANSFORMERS LOAD CURVES • MEDIUM VOLTAGE FEEDERS LOAD CURVES • MEDIUM VOLTAGE CUSTOMERS LOAD CURVES • ENERGETIC BALANCE (LOSS MANAGEMENT ) • VOLTAGE OUTAGE ALARM IURPA JUNE 2002

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26. FOR RURAL AREAS WHERE WE HAVE VERY LARGE DISTANCES BETWEEN FARMS WE ARE TESTING THE TURTLE SYSTEM IURPA JUNE 2002

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30. MAIN CAUSES OF NON-TECHNICAL LOSSES BAD METERS SOME UTILITIES DO NOT HAVE TESTING LABORATORIES OR EVEN TEST DEVICES TO BE USED IN THE FIELD IURPA JUNE 2002

31. SOME SPECIFIC SOLUTIONS COMPRISING OF A SPECIAL METERING BOX (WHICH HAS A SPECIAL LENS ON THE COVER) INSTALLED ON THE LINE POLE (10 FEET HIGH) WICH WE ARE ABLE TO BE READ FROM THE GROUND A VERY SIMPLE SOLUTION THAT IS HELPING US TO AVOID LOSSES IURPA JUNE 2002

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35. SETTING UP FIXERS THE DEVICES WE NEED ARE ONLY SOME VIDEO CAMERAS PROPERLY INSTALLED IN A HOUSE IURPA JUNE 2002

36. THANK YOU FOR YOUR ATTENTION LUIZ FERNANDO ARRUDA TEL 00 55 31 33295520 arrudalf@cemig.com.br http://www.cemig.com.br IURPA JUNE 2002