1

Abstract this paper presents a review of technologies,

methodologies and operational approaches aimed at improving
the efficiency of power distribution systems, with emphasis in the
accurate estimation and reduction of technical and non-technical
power and energy losses. From a losses evaluation viewpoint this
includes efficiently using data supplied by utility information
systems, and utilizing computational feeder models and advanced
modeling and simulation software for accurately calculating
technical and non-technical losses. From a technical losses
reduction perspective this includes the implementation of smart
grid approaches such as Volt-VAr Optimization (VVO),
distribution state estimation, automatic feeder reconfiguration,
meshed distribution feeder operation, and Distributed Energy
Resources (DER) among others. From a non-technical losses
reduction standpoint this includes the utilization of Advanced
Metering Infrastructures (AMI) and metering and fraud
deterrence and detection technologies such as prepaid and
tamper-proof electricity meters, macro-meters (communal
metering), remote connection and disconnection systems,
inspection and monitoring programs, data collection and
calculation improvement, etc. A summary of international
experiences, as well as conclusions and recommendations
regarding the effectiveness, advantages and disadvantages of
these approaches is presented and discussed.

Index Terms-- distribution systems, smart grid, technical
losses, non-technical losses
I. INTRODUCTION
OSS analysis and reduction are important and well-known
areas of power distribution system engineering and key
elements for efficient system operation.
Traditionally, total distribution energy losses have been
estimated by means of energy balances that consist of
subtracting the total energy consumed (metered and billed) by
customers from the total energy generated or delivered to
distribution substations and feeders. Since total energy losses
account for technical and non-technical (commercial) losses,
then further analysis is required to estimate them individually.
Usually, technical losses are estimated by using approximate
methods and assumptions. Specifically, by calculating active
power losses at peak load conditions (through computational
models and recorded load data), then applying a loss factor to
estimate average power losses and finally multiplying average

J. Romero Agero (julio@quanta-technology.com) is with Quanta
Technology, Raleigh, NC
losses by time (hours), to obtain monthly or annual energy
losses. Then technical losses are subtracted from total losses to
obtain non-technical losses.
The level of complexity of these calculations depends on
the methodology used for estimating power losses at peak and
loss factors as well as on the distribution system
characteristics and components included in the analysis. For
instance, calculating loss factors requires comprehensive
studies that may also have to take into account the influence of
non-technical losses, particularly when these are high [1].
Furthermore, losses on low-voltage secondary systems
(secondary lines and service drops) sometimes are not
included in this estimation or approximate values are used
instead. Depending on the estimation accuracy it can be
argued that such practice may be acceptable for systems with a
few and short service drops directly off distribution
transformers (such as the case of many modern North-
American distribution systems), but it is certainly not a
recommended practice for systems with long secondary lines
and numerous customers (such as the case of common low
voltage distribution systems in other regions of the world). In
some of those systems, the literature reports energy losses
ranging between 2.33% and 3.35% [2]-[4], which certainly
deserve consideration
1
. Similarly, although power losses at
peak are estimated by using computational models, if the
distribution transformers are not modeled in detail to include
load and no-load losses, then the estimation will not be
accurate.
During the last decade, the rapid evolution and wide
adoption of information systems, distribution analysis tools,
computational models and more recently the emergence of
smart grid technologies have given utilities access to the data
and tools required for improving these analyses and the
possibility of increasing the efficiency (e.g., reducing losses,
optimizing voltage profiles, etc) of power distribution systems.
For instance, a more accurate calculation of system losses is
now possible, since power flow data and computational
models of feeders are generally available. This allows
implementing batch processes for calculating, for instance,
8760-hour power losses, and obtaining an accurate
computation of annual energy losses that do not rely on using
estimated loss factors.

1
Interestingly, [4] reports that 91.8% of energy losses are localized on
secondary lines and 8.2% on service drops.
Improving the Efficiency of Power Distribution
Systems through Technical and Non-Technical
Losses Reduction
Julio Romero Agero, Senior Member, IEEE
L
978-1-4673-1935-5/12/$31.00 2012 IEEE
2
Although distribution system energy losses in industrialized
countries are generally within acceptable limits, there is room
for further improvement, particularly via smart grid
technologies. In many developing countries, on the other side,
this is still a critical issue that requires continuous and
competent monitoring and control and drives large
investments in both, conventional and smart grid solutions.
For instance, Table I and Table II, which show the results of
an international survey on T&D energy losses carried out by
the World Bank in 2000 for over 100 countries [5]. Here
values over 30% are considered as high losses. Similarly,
Table III and Table IV show the losses breakdown and total
energy losses (including non-technical) for a utility system in
a developing country. These results show that technical losses
are significant; however, for this specific case non-technical
(commercial) losses represent the majority of system losses.
Interestingly, non-technical losses are not an exclusive
problem of developing countries. For instance, according to
the Federal Bureau of Investigation and the International
Utilities Revenue Protection Association, the US electric
utility industry loses more than $6 billion annually to
electricity theft, while in India it reaches $4.5 billion [6], [7].

TABLE I. T&D LOSSES, 2000 [5]
T&D losses (%) Number of countries Percent
4-10 34 33.3
11-15 25 24.5
16-20 15 14.7
21-53 28 27.5
Total 102 100

TABLE II. T&D LOSSES BY REGION, 1980 AND 2000 [5]
Region Countries
T&D losses (%) Change
(%) 1980 2000
Western Europe 17 7.71 7.56 -0.15
Eastern Europe 24 9.68 18.18 8.50
Middle East, North Africa 11 11.18 19.63 8.45
Africa 11 14.60 19.95 5.35
North America 3 9.67 9.38 -0.29
South America 9 13.00 17.23 4.23
Central America, Caribbean 9 15.50 21.68 6.18
South Asia 5 25.20 27.55 2.35
Southeast Asia 7 12.14 13.32 1.18
East Asia, Australasia 6 8.67 7.65 -1.02
Total 102 11.69 16.22 4.54

TABLE III. DISTRIBUTION SYSTEM TECHNICAL LOSSES (ENERGY)
Breakdown
%
Load No Load Total
Transf (substation) 0.01 0.19 0.19
MV lines 1.69 0.00 1.69
Transf (distribution) 0.77 0.50 1.27
LV lines 7.42 0.00 7.42
Total 9.88 0.69 10.57

TABLE IV. TOTAL SYSTEM ENERGY LOSSES (%)
Distribution (technical) 10.57
Transmission (technical) 2.00
System total (technical) 12.57
System total (non-technical) 21.64
System total (technical & non-technical) 34.21

It is worth noting that the monetary savings due to loss
reduction include not only energy saved but also released
system capacity that can defer capacity expansion
investments. The international experience on the subject has
shown that in utilities with high loss level, $1 invested on loss
reduction leads to savings ranging from $10 to $15 [8], [9].
The following sections present a review of conventional and
smart grid approaches for reduction of technical and non-
technical losses that are currently being used by the industry
around the world. Furthermore, methodologies that have
potential for utilization are also reviewed. Finally, conclusions
and recommendations are summarized.
II. REDUCTION OF TECHNICAL LOSSES
This section presents a list of conventional and smart grid
approaches for losses reduction. The methods for reducing
losses at the distribution level are numerous, e.g., capacitor
placement, reconductoring, voltage upgrade, transformer load
monitoring, and reconfiguration, among others. Table V offers
insight into the benefit/cost ratio associated with various loss
reduction measures [10], [11]. From Table V, it becomes
apparent that both distribution transformer load management
and reconfiguration offer the highest benefit/cost ratio as they
are implemented with a minimal expenditure, however, it is
important to highlight that the actual ratios are very system
dependent.

TABLE V. Benefit/cost ratios for various loss reduction measures
Measure Benefit/cost ratio
Reactive compensation 2 to 8
Reconductoring 0.6 to 7
Voltage upgrading 1.5 to 3
Transformer load management 1 to 15
Reconfiguration up to 13
A. Reactive compensation
Distribution system load losses are a function of the square
of the current. Therefore, a way to bring down technical losses
is to decrease the absolute value of the line current by
reducing its reactive component, i.e., improving the power
factor [12]. This can be accomplished by installing fixed and
switched capacitor banks; this procedure is commonly known
as reactive compensation. Since capacitors can decrease
reactive power demand by supplying VArs locally, line
currents are reduced from capacitor bank locations all the way
back to generation equipment, leading to the following
economic benefits [10]:

a. Released generation capacity
b. Released transmission capacity
c. Released distribution substation capacity
d. Reduced energy losses
e. Reduced voltage drop and consequently improved voltage
regulation
f. Released capacity of feeder and associated apparatus
g. Capital expenditure deferral due to system improvements
and/or expansions
h. Revenue increase due to voltage improvements

Conventional switched capacitor banks allow for step-wise
reactive power compensation. Distributed Generators (DG)
and devices such as SVCs and STATCOMs may allow for
more versatile and continuous (reactive power load following)
3
compensation and voltage control (even during dynamic
conditions). Although voltage regulation using DG is not
widely utilized nor allowed by some of the existing
regulations, there is plenty of activity in this area, including
ongoing research and revisions of standards [13]. Therefore, it
has the potential for becoming more common distribution
system operation practice.
B. Reconductoring of primary and secondary lines
Given that distribution load losses are directly proportional
to the series resistance (R) of system components, another way
to reduce technical losses is to reduce R. This can be achieved
by replacing existing primary and secondary lines by greater
cross-section conductors. This procedure is commonly known
as reconductoring. For instance, [14] reports the experience of
a municipal utility that implemented a reconductoring project.
The total losses reported by this utility are approximately 2%;
this value is considerably lower than that of the majority of
utilities in the same region, which ranges between 4 to 13%.
The benefit/cost ratio associated with reconductoring is system
dependent. Additional benefits provided by reconductoring are
voltage profile improvement due to voltage drop reduction
along the feeder, and availability of additional capacity for
load transferring, either from or to neighbor feeders. The latter
also has a positive impact on system reliability.
C. Voltage upgrading
Distribution system losses can also be reduced by
increasing primary line voltage; this is known as voltage
upgrading or voltage conversion. Figure 1 shows an example
of estimated line current and active power losses for different
operating voltages, the current and losses reductions are
evident. Additional benefits include increased feeder capacity
and reach, i.e., increased ability to serve customers located at
farther distances from the substation. A potential drawback is
decreased reliability, particularly in rural and wooded areas.
Besides requiring higher voltage class insulation
2
, voltage
upgrade may also imply replacing crossarms, poles, etc.

Figure 1. Line current and active power losses (%) as a function of the
operating voltage (kV)

2
Additional costs for higher voltage class insulation are comparatively
small to total feeder costs [15].
D. Transformer load management
Transformer losses represent an appreciable portion of a
utilitys overall losses. For instance, a study conducted by the
Oak Ridge National Laboratory estimated that distribution
transformers account for 26% of transmission and distribution
losses and 41% of distribution and sub-transmission losses
[16]. Similarly [17] presents the results of an analysis
conducted for a real distribution utility where transformers
losses accounted for 55% of total distribution system losses,
and 2.14% of electricity sales (no-load and load losses
represented 86% and 14% of total losses, respectively).
During the last three decades many utilities executed
projects for replacing old and highly inefficient distribution
transformers, particularly in developing countries. Here, an
important factor to take into account is the fact that
distribution transformers are one of the most numerous
components of distribution systems. Despite the loss reduction
due to the replacement of a single transformer might not
appear to be significant, when this is accounted for a large
group of transformers, during an average life cycle of 20
years, savings become evident. For instance, [18] presents the
results of a project implemented by a utility in Europe that
replaced 146 old transformers by 75 higher efficiency units,
the estimated total annual savings attained by this project
reached about 1.2 million of kWh per year.
Furthermore, Advanced Metering Infrastructure (AMI) and
Transformer Load Management (TLM) systems have given
utilities the possibility of tracking and performing an accurate
economic evaluation of distribution transformer loadings that
takes into account several cost components (losses, capital,
loss of life, etc). The information supplied by AMI and TLM
systems may be used for optimizing distribution transformers
loading to ensure that they are operated within their high-
efficiency loading range e.g., distribution transformers are
typically at maximum efficiency when loaded at 50% of
nominal rating [18].
E. Reconfiguration
Distribution system reconfiguration consists in changing the
topology of distribution feeders by modifying the status of
distribution protective and switching devices (from normally
open to normally closed and vice versa). Reconfiguration aims
at improving the way loads are served by taking into account
their location and time patterns and adjusting power flow
paths. By switching to better distribute load, the system I
2
R
delivery losses will decrease [19].
Although distribution feeder reconfiguration was first
proposed in 1975, it was until the early 90s that it was
acknowledged as a viable option. With the introduction of the
smart grid concept and its self-healing requirements, as well as
the notable development of new distribution automation
switches, reclosers, sensors, and communications systems,
reconfiguration is increasingly becoming popular. Since in
many cases, distribution automation is introduced as a means
for improving reliability, the loss reduction associated with
reconfiguration is an additional benefit [10]. Therefore,
reconfiguration may be implemented as a part of a multi-
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34
P
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%
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Operating Voltage (kV)
I (%) Ploss(%)
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objective optimization to improve reliability, minimize losses,
optimize voltage profiles, etc. It is important to mention that
system protection coordination may need to be updated every
time the configuration changes. This is one of the reasons why
utilities prefer to avoid frequent configuration changes.
However, new technologies, such as adaptive protection
systems, can be implemented to allow for more frequent and
flexible reconfiguration. Theoretically, if the distribution
automation, communications and information systems
infrastructure is in place reconfiguration could be conducted
even at an hourly basis. However, practical limitations such as
equipment lifetime, system security, and workforce safety
concerns must be taken into account to define how frequent
reconfiguration should be performed. Even in the context of
utility systems that are not equipped with sufficient automated
switches, off-line seasonal reconfiguration can be performed.
This way the different load and loss profiles of summer and
winter (or rainy and dry seasons) can be taken into account.
The level of losses reduction that can be achieved by system
reconfiguration can be significant. For instance, a project
reported in [19] simulated implementing reconfiguration to a
portion of a utility distribution system (peak load of 230 MW)
for a period of one year and attained an estimated loss
reduction of 14.6%. Likewise, [20] presents the results of a
study for losses reduction through different reconfiguration
methods. A real utility distribution system was used for
evaluating the proposed methods, which achieved losses
reduction of up to 9.59%.
F. Load balancing
Load unbalance is relatively common in three-phase
distribution systems, and depending on its magnitude it can
negatively affect system operations, reliability, and safety.
Furthermore, measurements and computations reported by the
international literature show that losses increase due to
unbalanced loads, mainly due to the circulation of unbalanced
currents through neutral conductors. For, instance [21] shows
that for a 15% current unbalance, losses on a real low-voltage
distribution system of Brazil increase by 4.1% when compared
to a fully balanced system. Extreme load unbalance also
causes voltage unbalance, which affects sensitive electronic
equipment and also causes overheating (and losses increase)
of motor loads. Despite being a challenging problem, the costs
of performing load balancing are relatively low, since usually
it only implies metering equipment and labor costs (e.g., for
gathering and processing data, conducting analysis and
swapping loads phases in the field). Capital investments may
be required to add additional phases to single or two-phase
distribution lines.
G. Standardization of medium and low-voltage lines
One of the main sources of technical losses in secondary
(low-voltage) distribution systems of developing countries is
the proliferation of non-standard systems, which are
facilities that do not comply with accepted distribution
practices and national or international standards. These
systems are usually originated by the unauthorized connection
of a single load to the standard distribution system. This
may start a chain reaction and prompt the connection of
additional unauthorized loads to this facility or to other nodes
of the standard system.
Non-standard systems represent a serious problem for
utilities, not only for the high losses caused by the installation
of non-standard conductors, but also for the safety risks (e.g.,
fires caused by overheating of conductors), and the cascading
of outages to the standard system. Moreover, users of these
systems may not pay for the service; which significantly
increases non-technical losses. Figure 2 shows a non-standard
secondary system of a city in South Asia.


Figure 2. Non-standard secondary system
H. Distribution Management System (DMS)
During the last 20 years the distribution system has
witnessed the emergence of new supervision, control and
information technologies such as Supervisory Control and
Data Acquisition (SCADA), Geographic Information Systems
(GIS), Distribution Automation (DA), and AMI. The
convergence of these technologies has propelled the
materialization of modern distribution control centers and
Distribution Management Systems (DMS). Modern control
centers have been thought for optimizing the real-time
operation of distribution systems, in the same way Energy
Management Systems (EMS) accomplish this task for
generation and transmission systems. Some of the functions
implemented in modern DMS environments are state
estimation, Volt-VAr optimization (VVO), load forecasting,
outage management and restoration, data gathering for
planning functions (reliability analysis, off-line load flow,
short circuit analysis, etc), DG dispatch, and reconfiguration.
Evidently, the implementation of these functions implies the
availability of several metering and control points along the
distribution system, situation that is becoming more common
in modern distribution systems.
Distribution state estimation algorithms allow estimating
feeder electric variables in real or quasi real-time. This is
accomplished by using a combination of: a) real-time data
provided by voltage and current sensors installed along the
feeders, b) pseudo-measurements obtained, for instance, by
processing AMI and historical billing data, and c) data

5
regarding the status of switching and protective devices.
Distribution state estimation and on-line power flow
algorithms allow for a more accurate calculation of feeder
losses than that accomplished by using conventional
approaches. Furthermore, as discussed in the next sections,
they also allow for implementing VVO and determining the
spatial distribution of losses.
I. Distributed Energy Resources (DER)
The last decade has seen an unprecedented growth of DER
facilities interconnected to the distribution system. Abundant
research in this area has focused on estimating both, impacts
and benefits of DER integration. In the specific case of DG,
low to moderate market penetration levels, interconnected at
strategic locations, can help reduce system losses.
Figure 3 shows the results of an analysis conducted on a
real 12.47 kV distribution feeder. Here the base case shows
normalized hourly losses (including losses on 12.47 kV lines
and 12.47/7.2 kV 120/240 V transformers) before DG
interconnection. Cases C1, C2, and C4 show losses after
interconnection of 1 MW, 2 MW and 4 MW of photovoltaic
DG, respectively. For simplicity, neither output intermittency
due to cloud cover nor night hours have been considered in
this analysis. The plants used in this study have an individual
capacity of 500 kW interconnected via dedicated transformers.
The results show that losses decrease for C1 and C2; however,
they increase for the larger penetration level represented by
C4. Similarly, cases D1, D2 and D4 show losses for the same
penetration levels when highly-distributed photovoltaic DG is
used instead. Here photovoltaic DG plants with an individual
capacity of 5 kW interconnected to the secondary side of
distribution transformers were simulated. The results for the
latter cases show a reduction on feeder losses even for the 4
MW penetration level. This is due to the fact that the DG
plants are located close to customer loads. These results
demonstrate the criticality of DG sizing and location, as well
as their potential benefit on losses reduction.


Figure 3. Feeder losses (normalized with respect to peak losses)
J. Alternative distribution feeder operation
Historically the large majority of medium-voltage
distribution feeders have been operated in radial fashion. The
reasons behind this decision include simplicity to operate and
protect, lower fault current levels, lack of real-time
monitoring, control and automation, etc.
Recently, the introduction of smart grid technologies, DER
proliferation, growing demand for high reliability levels, and
advances in information systems, distribution automation,
protection and communications technologies have prompted a
renewed interest on exploring alternative distribution
operation approaches. This includes operating medium-
voltage feeders as closed-loops, i.e., in similar fashion as sub-
transmission and transmission lines. This type of operation is
more complex and requires using more advanced protection
systems, more robust equipment, and widespread automation,
monitoring, control, and addressing technical concerns
regarding potential switching transients, circulating currents,
etc. Nevertheless, this type of operation has a series of obvious
advantages, particularly from the point of view of reliability
and operations efficiency, including losses reduction and
voltage profile improvement. For instance, Figure 4 and Table
VI show a summary of the losses reduction that can be
achieved by operating two real 12.47 kV feeders as a closed
loop. Here each color (red and blue) represent a different
feeder. The arrows indicate the location of three normally
open tie switches.

Figure 4. Feeder losses under closed-loop operation

TABLE VI. TECHNICAL LOSSES COMPARISON
Case
Losses
Ploss (%) Qloss (%) Sloss (%)
C1 94% 96% 95%
C2 88% 93% 92%
C3 93% 94% 94%
C4 87% 88% 88%

Cases C1, C2, and C3 show the reduction on active power
losses at peak that can be achieved by closing the respective
tie switch of Figure 4. C4 shows the results that can be
attained by closing the three switches. Losses are shown as a
percentage of the base case (radial operation). As in the case
of DG, these results show the importance of switch location.
Interestingly, the results obtained by C4 are marginally better
70%
80%
90%
100%
110%
120%
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
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than those of C2, and would not justify the additional
complexity and equipment required for operating these feeders
under the former scenario. Similarly, Figure 5 shows the
voltage profiles for both feeders under radial operation (left)
and closed-loop (right) operation (C2 scenario). Here, voltage
on blue sections is within utility limits, and red sections
experience low voltage violations. The results show how
closed-loop operation also improves feeder voltage profiles.
Therefore, given the technology advances previously
discussed and its apparent benefits this type of operation
deserves further consideration and analysis.


Figure 5. Feeder voltage profiles under radial (left) and closed-loop (right)
operation
K. Volt-VAr Optimization (VVO)
Traditionally, voltage and VAr control devices have been
controlled independently by using local voltage and current
measurements. This type of operation leads to suboptimal
operation and uncoordinated equipment interactions. Ideally,
real-time data provided by local sensors should be
consolidated and evaluated to optimize global operation. VVO
utilizes capacitor banks, voltage regulators, DG units, and
other distribution system components to maintain acceptable
voltages at all points along a feeder under varying loading
conditions. VVO allows for: a) minimizing energy losses and
reduce demand, b) operating the distribution system as
efficiently as possible (without violating load and voltage
constraints), and c) supporting the reactive power needs of
bulk power systems during contingencies. VVO algorithms
reside at modern DMS on distribution control centers and can
either monitor the distribution system in a continuous way or
react to operator requests. They rely on a computational model
of the distribution system to conduct a series of real-time
power flow computations to estimate the optimal settings of
control variables that allow attaining predefined objectives.
VVO benefits include reducing peak demands, energy losses
and frequency of operation of distribution equipment, which
translates into evident economic benefits.
III. REDUCTION OF NON-TECHNICAL LOSSES
Non-technical losses are mainly caused by electricity theft,
meter tampering, and commercial system inefficiencies. This
includes: a) consumption of unmetered energy (e.g., by
bypassing existing utility meters or directly tapping secondary
lines); b) meter accuracy alteration, e.g., by tampering with
supply and instrument transformer wires [22]; and c) meter
reading and billing errors, e.g., inaccurate energy consumption
estimation of customers premises located at remote sites,
unmetered utility facilities (substations and power plants), etc.
This section discusses a list of alternatives for reduction of
non-technical losses. These alternatives deal with issues
related with metering, secondary systems and service drops,
and utility information systems.
A. Metering
Alternatives to reduce technical losses by more efficient and
widespread metering include:
a. Installation of meters to all customers and facilities,
regardless of type of customer, type of facility (e.g.,
auxiliary services, substations, etc), or type of tariff (there
might be customers with special rates, e.g., gratis). This
enables measuring all the energy delivered by the system
and accurately calculating losses.
b. Installation of prepaid meters. Over 40 countries have
implemented prepaid meters in their markets. Some
examples are the United Kingdom, with about 3.5 million
consumers, and South Africa, with over 6 million meters.
Prepaid meters allow customers to purchase in advance
the monetary equivalent of the amount of energy to be
consumed. The meters inform consumers when most of
the credit energy has been consumed, and the consumer
then purchases additional energy. The international
experience has shown that prepaid meters are a good
alternative for reducing non-technical losses due to billing
and commercial irregularities [23].
c. Installation of macro-metering for metering and
calculating technical and non-technical losses. The
macro-metering (also known as collective metering,
master metering or totalizing metering) strategy requires
the installation of global meters (e.g., at the low voltage
side of distribution transformers). This way the total
energy delivered can be compared to the energy billed by
the utility, a solution known as energy balance, which
enables the company to localize, detect and control non-
technical losses. The international experience with macro-
metering has been highly satisfactory. For instance, [24]
reports a reduction of 8% of non-technical losses (from
25% in Dec. 2003 to 17% in Jun. 2006) by implementing
a totalizing meter project.
d. AMI. AMI creates a network between smart meters and
utility enterprise systems. This allows implementing
remote reading, disconnection of overdue accounts,
tamper detection (meter cover open alarm, reverse current
alarm, phase unbalance alarm), outage notification, and
advanced functions including demand response, and Time
of Use (TOU) rates. AMI used in combination with
macro-metering (what is called preplanned installation
topology of smart meters) facilitates detecting excessive
load and unmetered consumption, which facilities remote
theft detection [6]. Furthermore, the data provided by
AMI can be used for profiling electricity usage; this is
done by analyzing smart meter readings to identify
abnormal consumption patterns, for instance, when
consumption is lower or higher than usual for a long time.

Low
voltage
7
Numerous utilities are using AMI for non-technical losses
detection, for instance, [7] discusses experiences using
AMI for fighting electricity theft.
e. Installation of meter seals (on meters and instrument
transformers), heavy-duty meter locking rings or any
other type of tampering-proof device. The objective of
these devices is to assure that nobody tampers or opens
the meter without leaving evidence. Meters, locking rings
and seals must be installed at the same time, to avoid
leaving the meter un-protected. Periodic field inspections
must be performed to identify, verify, and seal meters in
the field.
B. Secondary lines and service drops
a. Replacing conventional wires by antifraud conductors.
The objective of this alternative is to restraint or to make
more difficult the access of consumers to secondary lines.
For instance, in areas known for electricity theft, low
voltage preassembled or coaxial cables are used instead of
conventional conductors. Moreover, service drops are
replaced by antifraud cable, avoiding the access to the
phase conductor by means of piercing o cutting the
insulation. The phase conductor is protected by the
neutral conductor, which has a concentric pattern around
the insulation. Therefore, if an unauthorized connection is
attempted, it causes a short-circuit that interrupts service.
This cable is mostly used for single-phase loads, and its
effectiveness has been reported in the international
literature. For instance, [25] reports the reduction of total
losses by about 16% through the implementation of a
portfolio of solutions that included the utilization of
antifraud cable.
b. Conversion of secondary lines from overhead to
underground: The easy access to overhead secondary
lines facilitates the illegal connection of loads and the
proliferation of non-standard systems. One alternative for
overcoming this problem is to convert overhead lines to
an underground layout. The main advantages of this
approach are the inherent benefits of underground
systems: aesthetics (much less visual clutter), safety (less
chance for public contact), reliability (significantly fewer
short and long-duration interruptions), O&M (notably
lower maintenance costs), and longer reach (less voltage
drop) [16]. Its main disadvantage is economic; the cost of
underground lines is greater than that of overhead lines.
However, under the right conditions, some cost estimates
that cable installations can be less expensive than
overhead lines. According to [16], the underground to
overhead ratio for construction costs varies between 1.3
and 7.6. An alternative for reducing costs is the utilization
of direct-buried cables (with or without spare conduit).
C. Utility Information Systems
Distribution system geo-referencing using standard GIS
software and Customer Information Systems (CIS) are vital
for non-technical losses reduction. Through GIS the utility is
able to geographically relate each customer with its respective
secondary system, distribution transformer, feeder, and
distribution substation. CIS handles customer energy
consumption and billing information. Both systems facilitate
calculating accurate energy balances, and monitoring and
localizing system losses. Furthermore, utilities are moving
towards the implementation of DMS, which enables
optimizing system operation for minimizing technical losses,
as well as gathering data that can be used for estimating and
locating non-technical losses. For instance, [26] presents the
application of a state estimator (embedded in a DMS) for
determining the areas with the greatest amount of non-
technical losses on a radial distribution feeder.
IV. CONCLUSIONS
Distribution system efficiency can be notably improved by
controlling and reducing technical and non-technical losses.
The main contributors and level of system losses differ in
industrialized and developing countries. Interestingly, non-
technical losses are not an exclusive problem of developing
countries. Given the widespread electrification, and higher
energy consumption and rates, relatively low system losses in
an industrialized country may have a similar absolute
monetary value than that due to high system losses in a
developing country. For instance, electricity theft represents
3% of system losses and about $6 billion annually in the US,
while in India it corresponds to 30% and $4.5 billion [6].
Recent technological advances and industry trends such as
the implementation of the smart grid concept are giving
utilities additional tools and promising alternatives for
reducing system losses. On the technical losses side this
includes, for instance, more frequent system reconfiguration,
strategic DG sitting and dispatch to provide reactive power
and voltage support, closed-loop operation of distribution
feeders, VVO, and on-line power flow and state estimation
algorithms residing on modern DMS. On the non-technical
losses side, this includes AMI, pre-paid meters, and utility
information systems, among others. The specialized literature
and the simulations discussed in previous sections show
encouraging results in these areas. However, given the diverse
nature system losses, a comprehensive and efficient strategy
for improving distribution system efficiency must consider the
implementation of a portfolio of solutions that include
conventional and smart grid technologies.
V. REFERENCES
[1] A New Method to Calculate Power Distribution Losses in an
Environment of High Unregistered Loads, M. Poveda, in Proceedings of
1999 IEEE Transmission and Distribution Conference and Exposition,
Vol. 2, pp. 609 614, New Orleans, LA.
[2] Standard levels of energy losses in primary distribution circuits for
SCADA application, H.M. Khodr, J. Molea, I. Garcia, C. Hidalgo, P.C.,
Saiva, J.M. Yusta, A.J. Urdaneta, IEEE Trans. on Power Systems, Vol.
17, No. 3, Aug. 2002
[3] A new method for the computation of technical losses in electrical
power distribution systems, C.C.B. Oliveira, N. Kagan, A. Meffe, S.
Jonathan, S. Caparroz, J.L. Cavaretti, CIRED 2001, 16th International
Conference and Exhibition on Electricity Distribution. Part 1:
Contributions, Vol. 5, pp. 5, Jun. 2001
[4] A model for calculating technical losses in the secondary energy
distribution network, H. Lasso, C. Ascanio, M. Guglia, IEEE/PES
Transmission & Distribution Conference and Exposition: Latin America,
2006, pp 1-6, Aug. 2006

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Mo
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Re
IEE
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Ph
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ds, and distributed
VI. BIOGRAPH
lio Romero Ag
stribution at Quan
Vice-Chair o
ubcommittee, Edito
rid, Secretary of
odern and Future
cretary of the IEE
esources Integratio
EE. He is former
nergy Commission
h.D. degree in
an Juan (UNSJ), A
nology, Raleigh, N
eling and analysis
resources integrat
HIES
gero (SM06) i
nta Technology, R
of the IEEE
or of IEEE Transac
the IEEE Work
Distribution Sys
EE Working Group
on, and Senior M
r Commissioner o
n of Honduras. H
Electrical Engi
Argentina in 2005
NC. His areas of ex
s of power distrib
tion.
8
is Director of
Raleigh, NC. He
Distribution
ctions on Smart
king Group on
stems Planning,
p on Distributed
Member of the
of the National
He received his
ineering from
. Since 2007 he
xpertise include
bution systems,