The National Audit Office performance audit has found that Smart and RF meters contribute ”to more accurate and timely utilities billing.”

Auditor General Charles Deguara presented the Performance Audit to the Speaker of the House of Representatives Anglu Farrugia.

According to the Audit ”apparent losses relating to electricity decreased by 76%, which translates into savings of over €45 million.”

It found that, non-billed consumption relating to water remained stable over the project’s lifetime. In part, this is due to the greater susceptibility to technical faults of the water meter setup.

A recent WSC and ARMS study calculated that, in 2021, there were 17,928 water meters flagged for inspection, which amounts to over six% of total water accounts, the NAO said.

It went on to say that, ”through an investment of €131 million over a period of 12 years, the smart electricity and water radiofrequency (RF) meters generally yielded positive results. This included the automatic transmission of real-time readings based on actual consumption.”

Enemalta managed to ”substantially decrease” the amount of unbilled electricity lost through apparent losses and an aggressive revenue collection policy, particularly with respect to cases of electricity theft.

Also, Water Services Corporation (WSC) utilised data to detect in real time third party internal leakages, thus reducing unnecessary financial burden and operational manpower, and improving customer experience.

The potential for billing based on actual consumption through smart and RF meter technologies is currently estimated to be around 90% cent of all electricity and water accounts. In practice, in 2020, these statistics were in the region of 80 and 67% respectively, the NAO said.

It explained that this variance is due to various technical issues resulting in delays in the transmission of readings. In the case of water RF meters, this variance mainly arises from the different interpretation by WSC and ARMS of what constitutes a ‘stopped’ water meter.

Despite the high level of automation, questions relating to cost efficiency at the billing agency arise. The NAO noted that the number of staff employed by ARMS had ”increased significantly in recent years.”

”It was not always evident as to why most departments within ARMS were augmented with human resources when both the billing and the administrative functions were generally automated.” The NAO said that ”ARMS contends that the increase in staff is reflected both in the increased services being offered by ARMS, as well as in the efficiency of internal processes and in the departments within the company.”

The utilities’ companies and ARMS have always based billing on a pro-rata basis, where units in specific tariff bands are apportioned on a monthly or bi-monthly billing basis. This practice has also been endorsed by the Regulator. Billing calculations according to this methodology were generally found to be correct, the NAO said.

It noted that, ”however, the methodology relating to electricity consumption is the subject of Court litigation.”

Through other studies, NAO confirmed that ”a variance materialises between the current billing methodology and an annualised approach where billing considers the respective tariff bands and eco-contribution over a period of twelve months.”

In actual fact, NAO said that it analysis shows that, in 2020, 46 and 63% of the total analysed electricity and water accounts respectively ”did not reveal any significant variance, essentially amounting to less than €2 annually, whilst the more substantive variances are attributable mostly to the heavy consumer class.”

”Since the case is sub judice, it is prudent for the NAO to limit its comments to the foregoing. Nonetheless, the government committed to address issues of electricity and water consumption billing methodology in the recent Budget speech,” the NAO said.

”In this regard, one needs to keep in view the fundamental polluter pays principle enshrined in Article 191 of the Treaty on the functioning of the European Union.’

This performance audit may be accessed by visiting our website www.nao.gov.mt or on the Facebook page www.facebook.com/NAOMalta

Permalink: Smart and RE meters lead to ”more accurate and timely utilities billing” – NAO