A cross functional team was formed to review the current revenue protection process, the potential impact due to the implementation of Smart Metering and provide options in regards to the future process at Gulf Power Company. It was agreed upon that a pilot would be conducted in the Pensacola Office, utilizing Field Service Representatives who were connect and disconnect qualified.

The Pilot would be conducted for twelve months from April 2011 to March 2012.

Two FSR’s working a total of one quarter each would be utilized.

T. Lynn Smith would train the FSR’s in field investigations, interviewing and completing case investigations.

Reduce the cost of an investigation.

Work orders in a timely manner.

Note accounts same day order is worked and reduce lost field information.

Increase collections and cost to recovery ratio.

Provide dedicated work force for revenue protection.

General InformationGeneral Information

EEI estimates a utility’s loss due to theft runs between .5% to 2% of annual revenue. In 2010, Gulf had annual revenues of $1.6 billion. This would result in a loss between $8 - $32 million.

In 2010, Gulf Power’s Security Department identified $335,045 in theft, which is .0002% of the 2010 annual revenue.

With recommended improvement changes, the identified theft and recovery percentages would be increased.

The FSRs work approximately 98% of possible theft cases as a Check and Seal order in ARMS.

Security Investigators work approximately 2% of the theft cases on a Revenue Protection order.

There can be approximately 15 -45 days of unauthorized usage on a meter, due to the reading cycle, priority to work order and man-power.

Completed orders are referred to the Security’s CSR to calculate the amount to collect and note the account in CSS.

Security’s CSR creates a Diversion Investigation Management System (DIMS) case on the completed Check and Seal orders.

The Investigator receives the FSR’s completed Check and Seal order to determine who is responsible. This is accomplished by a phone call or visit to the address.

The Investigator will complete the DIMS case and forward the information back to the Security CSR.

The Security CSR will close and file the DIMS case and update the case if the customer pays.

Recovery is attempted when future customer contact is made. If customer sets up an active account before account is noted, Security

CSR will bill the responsible customer the identified charges.

Drawbacks to the Current ProcessDrawbacks to the Current Process

High labor cost of working a case (reduce Investigator’s involvement).

Revenue Protection duties are often shifted to a lower priority (wire theft, storm duty).

Orders are not worked in a timely manner.

Accounts are not being noted in a timely manner.

Multiple organizational owners.

Insufficient resources

Labor Cost related to Revenue Protection Labor Cost related to Revenue Protection (current)(current)

Labor cost (includes salary, benefits, ... ; not including transportation, IT and other overheads) of employees associated with revenue protection duties are:◦ Sr. FSR $31.84 per hour◦ Sr. CSR $34.87 per hour◦ Staff Investigator $60.62 per hour

Average time spent on a case is:◦ FSR at 5 minutes ($2.65 per case)◦ CSR 15 minutes ($8.71 per case)◦ Investigator 30 minutes ($30.31 per case)

In 2010, the cost to work, calculate, and investigate 1,985 cases worked by FSRs and forwarded to the Security Department (Investigator and Security CSR) was $82,715.   

Cost Summary In 2010, 1,985 cases had identified loss of $335,045 The amount collected was $135,492 For every $1.00 we spent we collected $1.64

Option 1

Continue current process using remaining FSRs and Security personnel.

Option 2

District Customer Service Operation Owns the Process.

Option 3

Corporate Security owns the Process

Option 4

Share ownership Corporate Security/District Customer Service Operations

Inspectors worked an order within 3 days of being generated.

Inspectors reported field investigation information and accounts were noted same day.

In 2010, the cost to recovery ratio $1 to $1.64

In 2011, the cost to recovery ratio $1 to $4.65. This increased due to removing the Investigators cost.

Collections for the pilot were 38.25%; collections for Eastern and Central for this same time were 30.5%.

Two FSR’s were assigned to Revenue Protection Pilot each quarter.

Inspector Results

QuarterRevenue

Protection Orders

Non Rev. Prot.

Orders

Total Orders

CasesDollars

IdentifiedDollars

RecorvedLabor Hours

Cost to investigate

Cost Per Recovery

Ratio

Percent of

Recovery

1st 179 376 555 164 $31,072.26 $12,997.65 523 $2,735.52 $1.00 : $4.75 42

2nd 201 242 443 186 $37,247.21 $10,082.43 459.5 $3,102.48 $1.00 : $3.25 27

3rd 221 184 405 222 $47,584.95 $19,228.50 534 $3,702.96 $1.00 : $5.19 40

4th 157 689 846 156 $32,065.05 $14,141.64 717.5 $2,602.08 $1.00 : $5.43 44

Total 758 1491 2249 728 $147,969.47 $56,450.22 2234 $12,143.04 $1.00 : $4.65 38.25

Current process

Central 241 $30,958.46 $10,409.23 $12,146.40 $1.00 : $2.97 34

Eastern 381 $76,479.30 $20,773.20 $19,202.40 $1.00 : $3.68 27

Total 622 $107,437.76 $31,182.43 $31,348.80 $1.00 : $1.05 30.5