Revenue Protection Services

1. Revenue Protection Services David Bown Revenue Services Product Manager Siemens Energy Services Ltd 26th August 2004

2. Overview of Siemens RP Operation Current Position of RP in the UK Changing Role of an RP Practitioner Video Questions Revenue Protection Services Siemens Energy Services Ltd 26th August 2004

3. Revenue Protection Services • Coverage - Eastern and East Midlands Distribution areas • 18,000 Investigations per annum • 6,000 Cases of confirmed interference per annum • 75M Kwh assessed loss per annum due to theft • 400M Kwh assessed loss per annum due to errors and faults • 120 Prosecutions per annum • The Supplier decides whether to report cases to the Police for possible prosecution Siemens Energy Services Ltd 26th August 2004

4. “Your loss is our concern” Our philosophy is to maintain customer goodwill whilst detecting and preventing losses Core Service - To investigate and provide initial remedy where interference with a utility meter has been found. To assess value of unrecorded energy Additional Service - Negotiation with Consumer and secure payment Revenue Protection Services Siemens Energy Services Ltd 26th August 2004

5. Revenue Protection Services • 24hr 365 day availability for advice • and emergency response • Awareness training for • Data Collection, Meter Operations, • Customer Services and housing associations • External enforcement agencies • Consultancy for license obligations • Interpreting codes of practice and policies Siemens Energy Services Ltd 26th August 2004

6. Revenue Protection ServicesSpecialised area’s • Customer Negotiation • Securing acceptance of civil liability • plus maximising loss recovery • Identification of HH Meter and Billing Errors • - Faulty Current Transformers • - Faulty Meters • - Unmetered Supplies • Monitoring of persistent offenders • - Deterrent value and safety aspects Siemens Energy Services Ltd 26th August 2004

7. Revenue Protection ServicesOrganisational chart Siemens Energy Services Ltd 26th August 2004

8. Revenue Protection Services Qualifications of RP Officers • Qualified Electricians • Experienced metering engineers • All PACE trained • PoliceAnd Criminal EvidenceAct • NVQ availability for Revenue Protection • Government funded • National Vocational Qualification • The first World Wide Siemens Energy Services Ltd 26th August 2004

9. Revenue Protection Services • More Change on the Horizon …. • Incentives and responsibilities do not match • Proactive Supplier’s are penalised • Supplier’s who are purely reactive can hide Siemens Energy Services Ltd 26th August 2004

10. Revenue Protection Services OFGEM Review of Energy Theft • Consultation Process launched in April 2004 • Industry wide seminar on 7th June 2004 • Responses deadline 24th June 2004 • OFGEM to publish decision on way forward in Sept 2004 Siemens Energy Services Ltd 26th August 2004

11. Revenue Protection Services OFGEM’s Four Draft Principles 1. Customers who are taking an illegal supply of gas or electricity face a high risk of being detected and prosecuted. These customers should also face effective sanctions where theft is detected. 2. Commercial incentives on supplier’s, gas transporters and distribution network operators should actively encourage the detection and prevention of theft of gas and electricity. Where appropriate commercial incentives can not be put in place there should be effective regulatory safeguards in place. Continued Siemens Energy Services Ltd 26th August 2004

12. Revenue Protection Services OFGEM’s Four Draft Principles (Continued) 3. The arrangements should not require detailed monitoring as a matter of course or require regular Ofgem intervention to ensure compliance and their overall effectiveness. 4. The arrangements should be cost effective and should take into account the impact of theft on customers both in terms of cost and safety. Siemens Energy Services Ltd 26th August 2004

13. Revenue Protection Services The Changing Role of an RP Professional • Meter Faults • Billing Errors • Unregistered Sites These are all utility caused losses • Lack of audit controls Siemens RPS is addressing these problems Siemens Energy Services Ltd 26th August 2004

14. Revenue Protection Services Examples of Major Loss that Siemens RPS has dealt with • Anglian Water - Sewerage Treatment Works Total assessed loss = 21,929,661 kWh Approx retail value = £880,000 • RAF Marham Total assessed loss = 22,949,571 kWh Approx retail value = £920,000 • 3M United Kingdom Total assessed loss = 8,685,117 kWh Approx retail value = £350,000 Siemens Energy Services Ltd 26th August 2004

15. Revenue Protection Services Data Management Siemens inspected 136 major sites which were supposed to be de-energised and found the following anomalies:- • 23 sites where the customer was using electricity and not receiving a bill • 51 sites where the premises no longer exist • 47 duplicate records Siemens Energy Services Ltd 26th August 2004

16. Revenue Protection Services Key Message My key message to those of you working in a de-regulated competitive environment is to do whatever you can to ensure that effective audit controls are in place. To do otherwise, will cause serious problems in the future. Siemens Energy Services Ltd 26th August 2004

17. Revenue Protection Services Working in Partnership Video of Siemens RP Service and Essex Police operation This video was made with the full co-operation of the police officers involved and with the consent of the customer Siemens Energy Services Ltd 26th August 2004

18. Revenue Protection Services Thank you for your time and attention Any Questions ? Siemens Energy Services Ltd 26th August 2004