Abstract
The theft of electrical energy is one of the main problems faced by electricity distribution utilities, especially in developing countries. Aware of the difficulties in combating non-technical losses (NTLs) in Brazil, the National Electric Energy Agency (ANEEL) established tolerable limits for the percentage of non-technical losses to each Brazilian distribution utility. Despite the notable progress made by ANEEL, when comparing public utility NTLs and their regulatory targets in the last decade, it was observed that the goals defined by this agency were not able to lead to a general reduction in NTLs in the country. Thus, the search for alternative methodologies to deal with the topic is necessary. A more attractive alternative to the ANEEL’s model is an efficient frontier model. This paper describes a stochastic frontier cost model for panel data whose equation is specified to provide the tolerable limits for the percentage of NTLs. The proposed model was applied to a panel of data containing annual observations, over 10 years, of 41 distribution utilities in the Brazilian electrical system.
Highlights
The theft of electric power is one of the main problems faced by distribution utilities in developing countries, in particular in many countries in Africa, Latin America, and South Asia [1,2,3,4,5], where the current levels of the theft of electric power pose risks to the solvency of many electricity distribution companies in these countries and to the security of energy supply itself [1,3,4]
The negative coefficient for the “lowinc” variable suggested that the discounts on electricity bill for the low-income families contributed to reducing the percentage of non-technical losses (PNTL)
The results showed that the income inequality, subnormal households, and credit default contributed to increasing the PNTL
Summary
The theft of electric power is one of the main problems faced by distribution utilities in developing countries, in particular in many countries in Africa, Latin America, and South Asia [1,2,3,4,5], where the current levels of the theft of electric power pose risks to the solvency of many electricity distribution companies in these countries and to the security of energy supply itself [1,3,4]. Though the situation in Brazil is much less dramatic than that observed in other developing countries (and, overall, it is even close to the average 7% observed in the OECD countries [4]), NTLs have a significant financial impact both for utilities and other Brazilian consumers. This is due to the fact that in addition to the costs of the generated and unpaid energy itself, consumers and utilities companies have to bear the full cost of the transmission and distribution infrastructure associated with these NTLs. In Brazil, the NTL is an input variable for tariff calculations. The NTL is partially passed to consumers through electricity tariffs, i.e., the NTL is a cost shared among all consumers [6]
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