Analyzing Foregone Cash to Improve Utility Performance
The level of performance of an electric utility is determined by the soundness of its financial situation, the efficiency of its technology, and the quality of service it provides customers. Its financial underpinning is a balance of costs and reve...
| Main Authors: | , , , |
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| Language: | English |
| Published: |
World Bank, Washington, DC
2021
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/371961628830813641/Analyzing-Foregone-Cash-to-Improve-Utility-Performance-Topical-Paper-Utility-Performance-and-Behavior-in-Africa-Today http://hdl.handle.net/10986/36181 |
| Summary: | The level of performance of an electric
utility is determined by the soundness of its financial
situation, the efficiency of its technology, and the quality
of service it provides customers. Its financial underpinning
is a balance of costs and revenue (from customer payments,
government, and other sources). But revenue is not as
straightforward as it might seem. The concept of foregone
cash addresses the ‘cash on the table’ that pays for
operations and servicing debt (revenue collected divided by
the cost of operations and debt). The problem is the table
may not have all the cash that ought to be there, such as
money owed because of nonpayment’s by customers and money
lost through inefficiencies in power generation or delivery.
Consequently, there is a latent revenue that, if fixed, can
provide vital improvements to a utility’s financial
performance. This note analyzes the elements involved in
understanding foregone cash in the context of cost recovery. |
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