This Retail Solution

How it works

The Accounts Receivable Management Platform [“A-R”] is powered by a network of intelligent miniature sensoring devices connected to the Low Voltage electrical network, that constantly monitor and measure electrical consumption: Local in-premises meters pre-paid or otherwise will NO LONGER be required. No meter reading will be necessary.

The A-R system communicates with a powerful backend server on a near “real time” basis by means of a fiber optic network reaching to all end-user points of the power grid.

These smart sensoring devices on the electrical network offer intelligent data, creating the first “Smart Grid” on the Low Voltage network, and form a Virtual Power Station which can control the provisioning and usage of power on the customer side.

The A-R system also caters for ‘critical’ users such as traffic lights, hospitals, customers on life support, etc., exempting them from load limiting.

The A-R system can determine what electricity is used by each subscriber.
1. The A-R data base should reflect the last month’s usage so that there is a yardstick of expectation to measure against for this month’s usage.
2. The A-R data base should be able to determine what each subscriber’s account receivable status is. Based on the credit requirements, the system should provide a warning that the subscriber will be shut off, then shut off the subscriber’s electricity if there is no payment on time.
The A-R system must determine what electricity is used by each “neighborhood” or the sub-grid serviced by a given transformer.
The A-R system must detect any new electricity drainage and determine whether it is authorized and paid for. Otherwise, the system should disconnect the electricity drainage and / or send authorities to the point of drainage for law enforcement.
The Accounts Receivable management platform service will charge a fee per subscriber per month to the grid. The platform will also be charged a bandwidth usage fee each month by the network.

The servicing bank —

Takes over accounts receivable from Municipality power grid, accepting electricity bill payments into specific customer accounts and making payments to the Municipality power grid, based on bills generated by the system.
Develops retail relationships with all electricity customers on the grid.
Develops accounts receivable service relationships with the Municipality.

The service bank combined with or acts as an institutional investor to:

To fund the accounts receivable management platform’s implementation as a risk management service
The service will monitor and bill each electricity customer at a monthly service fee. Each electricity bill verified by the platform must be paid by a deadline or the subscriber’s electricity is cut off.
The platform monitors electricity usage and can detect and report the loss amount and location of an unauthorized electricity theft in real time.
This risk management service — empowered by the government and the Municipality Grid, manages and prevents loss from non-payment and electricity theft risks.

Proposed consequences of this risk management service:

A customer that owes an unpaid balance on the electricity bill will be given every opportunity to arrange a manageable repayment schedule. If this schedule is agreed to, then electricity will be continued as long as the customer stays current with the current bill while adhering to his agreed-to old balance payment.
If a customer does not pay his electricity bill within 30 days, he will be put on notice and an arrangement will be developed with the customer. If no arrangement is agreed to by the customer, the electricity will be cut off once the arrears reaches 45 days.
The customer who is cut off from electricity service will be referred to the Government’s Free Basic Electricity program. If the cut-off customer qualifies for the Free Basic Electricity program, the government contracts with the Grid and makes payment for the Free Basic Electricity subsidy each month on behalf of the customer.
It is anticipated that some customers may be cut off for non-payment upon the platform’s initial commissioning. The risk management service will work through these cut-off customers to come up with a solution for each. Otherwise, the cut-off customer will continue to be cut-off from electricity.
All power theft sites will be immediately identified once the risk management service is commissioned. The authorities will be summoned to capture the criminals that have modified the grid, and the Municipality will repair the grid. The risk management service will be paid a power theft detection fee for each power theft detected and cut-off.

Prospective benefits of this risk management service:

The Municipal power grid will no longer have to provision electricity that is not being paid for.
The Municipal power grid will be repaid for electricity bills that are in arrears, albeit on a protracted schedule in some instances.
The Municipal power grid will be able to securitize the accounts receivable of these electricity-bill-paying customers in order to collateralize Power Purchase Agreements that then be used by the Grid to acquire additional infrastructure extension or repair — or additional electricity capacity from Independent Power Producers.
The institutional investor / collections bank will be able to securitize the platform management service company’s electricity bill payer’s service fee in order to expand its capital capacity to finance more accounts receivable management platforms on additional Municipal power grids.
The collections bank will be able to monetize the cash flow float from the electricity bill accounts receivable as a new profit stream.
The collections bank will be able to exploit the Municipal grid electricity customer accounts to develop additional retail banking services for these now-reliable individual bill-payers.
The institutional investor / collections bank will be able to rely upon the now-reliable individual customer accounts to manage the risk of new guarantees (with fees up to 2% of each principal liability) that will be needed to perfect Power Purchase Agreements issued by Municipal Power Grids as bankable collateral.