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The city lights illuminate the streets of Bogota. Colombia. On the right, the "torre colpatria" ... [+] (Colpatria tower) can be seen.gettyElectricity theft is a pervasive global issue, costing utilities an estimated $100 billion annually and straining energy infrastructure worldwide. From tampering with meters to dangerously tapping into high-voltage power lines, the methods used to steal electricity vary in complexity and risk. Countries like Brazil, India, Jamaica and even parts of the European Union face significant non-technical losses, which undermine revenue, disrupt markets, and pose safety hazards. While theft is often driven by economic hardship and lack of access, simply penalizing offenders fails to address the root causes, especially seeing that there is also the resultant economic burden on paying consumers of electricity. Instead, proven models for combating electricity theft focus on integrating vulnerable communities into the grid through innovative policies, technological interventions, and sustainable pricing structures that promote compliance while securing the energy supply.Tackling Electricity Theft with a Holistic StrategyEnersis, a Colombian electricity distribution company, achieved significant success in reducing electricity theft by implementing a comprehensive strategic model that addressed various facets of its operations. According to the World Banks 2009 report, Reducing Technical and NonTechnical Losses in the Power Sector, the companys approach was multi-dimensional, encompassing regulation, commercial management, technical improvements, community engagement, information technology, and punitive actions. Through these combined actions, Enersis not only reduced theft but also ensured the long-term sustainability of its operations. This model offers valuable insights that can be replicated in other countries facing similar challenges.As a background, CODENSA is a Colombian company that distributes and sells electricity and is a part of the Enel Group through Enersis. Since the unbundling and privatization of Bogots vertically integrated utility in 1998, CODENSA, now part of the Enel Group through Enersis, has significantly reduced energy losses in its distribution network. According to the Q3 Report for Enel Colombia, as of September 2024, the energy loss index stood at 7.55%, marking a steady decline from the 22% total losses recorded in 1997. This improvement is largely attributed to aggressive energy recovery initiatives aimed at mitigating non-technical losses. Between January and September 2024 alone, CODENSA recovered 128 GWh of previously unrecorded consumption through targeted interventions, including 109,594 technical inspections.This article will further explore the comprehensive framework that facilitated the remarkable reduction in energy losses, Highlighting the key strategies that contributed to this success. The company systematically addressed both technical and non-technical losses via a robust regulatory framework, enhancing commercial management practices, and leveraging advanced technology. Additionally, fair tariff structures and community engagement initiatives, legal enforcement and IT-driven monitoring, further highlighted the approach which can serve as a model for electricity distribution companies seeking to improve efficiency and financial sustainability.Strengthening Electricity Governance Through Regulatory FrameworkBogota, Colombia - November 2020: The Avenida El Dorado in Bogota seen during a dark night.gettyAt the heart of this model was a collaborative approach to regulation. The company worked closely with political authorities and the sector regulator to ensure that the tariff structure was both financially sustainable and equitable. They focused on tariff rates that reflected the costs of efficient supply while ensuring fair pricing for consumers and maintaining service quality standards. According to the report, one of their key strategies was the generation of funds to subsidize low-income customers through various means, including targeted tariff rates and government subsidies. This framework not only reduced electricity theft by making legal electricity more affordable but also aligned the financial interests of all stakeholders, promoting a more efficient system overall.Improving Electricity Metering and Billing Via Commercial ManagementOn the commercial side, Enersis managed metering, billing, and collections with a keen focus on reducing losses. The companys integral approach included implementing policies for customer service and creating awareness programs to educate customers about the importance of paying for electricity as a commercial good. Additionally, they increased the number of points of contact for customer service, ensuring that the company was more accessible and responsive to clients. This proactive approach fostered a better relationship with customers, which played a crucial role in reducing instances of non-payment and tampering. The implementation of communication programs also provided customers with transparent information about their rights and obligations, empowering them to make informed decisions about their electricity consumption.Strengthening Electricity InfrastructureFrom a technical perspective, Enersis made significant investments in constructing distribution networks that were less susceptible to tampering and irregular connections. According to the report, the company also conducted systematic field assessments to detect illegal connections and damaged meters, as well as unmetered consumers. A notable initiative was the installation of sealed boxes to ensure that meters could not be tampered with. This proactive monitoring, coupled with regular inspections of the operational condition of seals, effectively curbed electricity theft by making it harder for consumers to engage in illegal activities.Fostering a Culture of Electricity Responsibility Via Community EngagementClose up aerial view of Bogota skyline with colorful skyscrapers and large urban sprawl at dusk in ... [+] ColombiagettyCommunity engagement played a pivotal role in Enersis strategy. The company made efforts to connect directly with communities and local leaders, creating awareness about the importance of rationalizing electricity consumption and the consequences of theft. Enersis designed campaigns to promote regular payment of electricity bills, preservation of electric infrastructure, and safe practices to avoid accidents. These outreach programs, particularly those targeting children in low-income households, helped instill a culture of responsible energy consumption, further discouraging theft and fostering a more positive relationship between the company and its customers.Leveraging Technology to Combat Electricity TheftIncorporating information technology was another key element of Enersis approach to reducing electricity theft. The company implemented Management Information Systems (MIS) to support both commercial and technical functions, enabling more effective monitoring of electricity usage and consumption patterns. Automated meter reading devices were progressively applied to large and medium consumers, while systematic field actions were taken to address irregularities detected through the commercial MIS. Additionally, Enersis regularly updated its databases, ensuring consistency with the physical reality of electricity consumption, which allowed the company to identify and address irregular service conditions swiftly. The integration of IT into their operations was instrumental in improving the efficiency and accuracy of the company's loss reduction efforts.Legal and Enforcement Measures: Strengthening Electricity Theft PenaltiesEnersis also understood the importance of punitive actions in ensuring that the fight against electricity theft remained effective. According to the report, the company collaborated with the justice department to take legal action against major offenders, particularly large consumers who were involved in electricity theft. Publicizing cases of theft, especially those involving prominent social figures, helped create social condemnation and acted as a deterrent to potential offenders. By combining legal measures with community-based education campaigns and transparent information, Enersis was able to significantly reduce electricity theft while enhancing the overall customer experience. The companys strategy not only addressed immediate losses but also fostered a long-term shift in consumer behavior, which is essential for the sustainability of any energy distribution system.A Holistic Model for Electricity Theft PreventionThe Enersis model for reducing electricity theft provides a comprehensive and multifaceted approach that has proven successful in minimizing technical and non-technical losses. This framework is built on six key pillars: regulation, commercial management, technical enhancements, community engagement, IT and data analytics, and legal enforcement. Through the collaboration with policymakers to establish fair tariffs and financial incentives, companies can create a sustainable pricing structure. Strengthening billing systems, improving customer service, and enhancing communication foster trust and compliance. Technical upgrades, such as grid reinforcement, field audits, and secured meters, minimize vulnerabilities. Community engagement initiatives educate the public, promote awareness, and build long-term accountability. Leveraging smart meters and data-driven monitoring enhances operational efficiency, while strict legal enforcement, including penalties and prosecutions, serves as a powerful deterrent. This holistic approach ensures a sustainable, secure, and efficient electricity distribution system.The strategies employed by Enersis can serve as a valuable blueprint for other countries like Jamaica looking to tackle electricity theft, demonstrating the importance of a holistic, multi-pronged approach that combines technology, regulation, community involvement, and legal action.This article is part of a series on electricity theft. For further insights, check out: 1. Electricity Theft: Economic Burden and Sustainability Risks2. Power Plant Losses and AI: Tackling Inefficiencies for Sustainability3. The Economic And Social Dimensions Of Electricity Theft4. Proven Strategy For Combating Electricity Theft: The Brazil Model