Regularization of Illegal Electricity Consumers: Non-Technical Loss Rates in Rio de Janeiro

Abstract

Electricity theft represents a major problem in developing, emerging and even developed countries. This case study focuses on Rio de Janeiro, a city that is growing rapidly yet is also struggling to overcome basic challenges in the electricity sector. Known formally as non-technical losses, electricity theft and electricity fraud have contributed to a precarious situation in Rio de Janeiro in which regularized consumers effectively pay increased tariffs to compensate for high electricity theft levels.

In particular, the case study will address strategies undertaken by Light S.A., Rio’s main provider of electricity services, to combat non-technical losses. After almost 20 years as a public company under the tutelage of the Brazilian state, Light S.A. was privatized in 1996, with anticipation that privatization would improve the woes of Rio’s electricity services. Through analysis of all involved actors—consumers, regulators, and utility companies—the case aims to demonstrate the effects of privatization of the electricity sector as well as the trade-offs involved in combating non-technical loss rates.

This case study is part of a series of cases designed for the course "Case Studies in Sustainable Development" at the Johns Hopkins University School of Advanced International Studies (SAIS).

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