Sector Reform and Utility Commercialization – From our Portfolio

USAID’s SRUC Program seeks to support utility commercialization by enhancing the financial viability and long-term sustainability of electricity systems, thereby facilitating modern utility development and establishing the necessary preconditions for long-term clean energy investments. SRUC works hand-in-hand with developing country power utilities to increase access, decrease commercial losses, improve human capital, and embrace private sector market models. The following projects illustrate how SRUC is helping improve the sustainability of electricity systems around the world. Click on the links below to learn more about each project.

Jamaica Readyboard Electrification Demonstration Pilot Project

Over the last ten years, Jamaica Public Service Co Ltd (JPS), Jamaica’s private electric utility and the sole provider of electricity on the island, has faced pervasive challenges related to system losses. The USAID SRUC program is working with JPS to develop financial, technical, and direct customer engagement techniques to reduce non-technical losses and regularize illegal consumers.  In this effort, JPS works alongside the Jamaica Social Investment Fund (JSIF) – an NGO focused on community-based economic development for the country. The USAID SRUC team, through a series of technical assistance projects, is helping the Jamaican utility and government entities to rectify issues related to theft and to bring customers back onto the grid. These engagements included a workshop with utilities and regulators from around the world focused on their countries’ loss reduction strategies; an intensive knowledge exchange on community engagement techniques with a Brazilian utility manager; and an ongoing pilot project to provide readyboards to dwellings in a downtown Kingston community that cannot otherwise be legally wired for electricity.

Haiti Caracol Power Utility Transaction Support

A significant U.S. contribution to the Caracol Industrial Park (CIP), located in Caracol in northeastern Haiti, has been the construction and management of the CIP Power Utility (CPU), an on-site 10 megawatt dual-fired power plant. The CPU provides 24-hour, reliable electricity to the CIP tenants, as well roughly 8,000 residential and commercial customers in neighboring towns. USAID SRUC has supported the  Government of Haiti (GOH) in assessing the most effective public-private partnership (PPP) for the long-term operation, management and continued grid expansion of the power utility. The SRUC program has offered several training sessions for GOH officials focusing on the structure and benefits of various PPP models and procurement methods, contracting methods and models based on international best practices for energy commercialization, support understanding key tender documentation, and communication with prospective private bidders. The sessions have included stakeholders from USAID, the Ministry of Finance, and Ministry of Public Works, Energy Cell. Sessions covered have included tender bidding criteria and the PPP structure elements to ensure maximum benefit of Haitian communities receiving electricity.

Mozambique Commercial Loss Reduction Strategy

Electricidade de Mocambique (EdM) is a state-owned electric utility providing power to over 1.5 million customers throughout Mozambique. The utility’s financial performance has been suffering as over 14% of power is lost each year due to theft by customers, poor management within the utility and an underperforming distribution meter system. As a result, the utility loses an estimated $34.3 million in revenue annually. The USAID SRUC team is working with EdM’s Executive Board and management to develop institutional changes, business processes and a road map to reduce commercial losses and increase revenues that will help finance their ambitious electrification program of 400,000 new connections each year.

Indonesia Geothermal Support Project

With more than 29 Gigawatt electric (GWe) in potential capacity, Indonesia is home to one of the most abundant sources of geothermal power. Having utilized less than 5 percent of that potential capacity, the Government of Indonesia has set targets to increase utilization nearly fivefold by 2025. In June 2015, the SRUC team was approached by USAID Indonesia to bolster the growth in geothermal utilization through support of the government-owned electric utility, Perusahaan Listrik Negara (PT PLN), in the renegotiation of eligible Independent Power Producer geothermal projects according to parameters set out by the Ministry of Energy and Mineral Resources (MEMR). For additional information, check out the following article.

Utility Employee Incentive Program Study  

USAID SRUC identified employee incentives as an important component of a successful loss reduction program. While many reports examine customer-facing and technical solutions to improve utility performance, few global assessments explore the incentive programs utilities use to reward staff who demonstrate a clear contribution to loss reduction. As part of the program, SRUC is preparing a report based on interviews with more than ten leading utilities in developing countries to help electric utilities to improve the design of incentive programs that fit their personnel, and allow them to cost-effectively address non-technical energy losses.

Electric Utility Business Models of the Future Training

With the introduction of new technologies and innovative service offerings, the global power industry is undergoing one of the largest transformations in its history. Technology, policy, and customer preference are all playing a key role in driving this transformation. Generation is becoming more distributed and localized, and operational and informational technologies are increasingly converging. While the impact of these changes is at times unclear, there is no doubt that the industry of the future will look very different from today. While this transformation challenges the current utility model, it also offers opportunities for existing utilities to grow, reach more customers, and operate more efficiently. This highly fluid environment will have major implications for electric utility companies everywhere, as they must seek to adapt to a changing power sector. The training focused on the current state of the utility sector and the resources needed to design and implement projects which will build counterpart capabilities to maintain and improve power sector performance in light of these industry transformations.