NAO: water meters less reliable, but smart meters saved €45 million

€45 million in “lost electricity” have been saved over a 12-year period through Enemalta’s smart meters. 

“Apparent losses relating to electricity decreased by 76 per cent which translates into savings of over €45 million,” a NAO investigation found. 

The national auditor also expressed concerns over the substantial increase in the utility billing company’s staff, despite the automation of metres. 

The report was tabled in the House on Wednesday. 

“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,” a press release by the NAO office read. 

ARMS said the increase in staff is reflected both in the increased services being offered by the company, as well as in the efficiency of internal processes and in the departments within the company.

The auditor general’s office found that smart electricity and water radiofrequency meters generally yielded positive results, with the automatic transmission of real-time readings allowing ARMS to issue most bills based on actual consumption. 

“Enemalta managed to substantially decrease the amount of unbilled electricity lost through apparent losses and an aggressive revenue collection policy,” the press release read. 

The report showed that 67% of water bills were based on actual consumption, noting that while in theory 90% of accounts could be billed using actual readings, only 67% of water and 80% of electricity accounts were billed this way. 

"The overestimation of stopped water meters arises since the billing agency uses the term ‘stopped’ as an all-encompassing category which groups together meters transmitting repetitive readings. Such circumstances do not necessarily imply that the meter is damaged,” it said. 

It said 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’s analysis showed 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. 

With the case being sub judice, the NAO said it would be prudent to limit its comments to the foregoing. The government has committed to address the issues related to electricity and water consumption billing.  

Government reaction 

The government reacted to the report by stating it has “confirmed once again” that energy bills are being calculated in the same way they have always been. “In fact, the only change since 2013 was the 25% reduction in tariffs.”

“In his report, the Auditor General says that with the annualisation billing methodology, heavy consumers would benefit more whilst the more responsible consumers would be affected negatively. This reflects what the Ministry for Energy has already stated, namely that the rushed statements by the Opposition would result in higher bills for thousands of clients and endanger the eco-reduction benefit,” it said. 

“The need for well-thought-out solutions which are not based on populism are reflected in the position already adopted by this government when, in the Budget for next year, it declared that a new system will be announced. This system would be fair without negatively impacting any clients. This is contrary to what the Opposition has been stating, with its rushed proposal which would have increased the bills of thousands of clients.” 

Opposition reaction 

In its reaction, the opposition said the report confirmed the government had robbed families some €6.5 million a year. 

It said a PN government would give back over €50 million in overcharged payments.