The Ethiopian Electric Utility (EEU) is upgrading power distribution infrastructures to improve service performance. Distribution losses can be classified into categories of technical losses and Non-technical losses. The technical losses are most visible losses and Non-technical losses are due to error of energy meter and illegal use of electrical energy consumption. The objective of the thesis is to make energy loss assessment and auditing in Addis Ababa Electric Utility the residential customers under a transformer were selected as the pilot site area which name is Tikur Abay matemiya North Addis Ababa District Service Number five. The smart meter is installed with the old meter so that two sets of metering data can be compared. Data control unit (DCU) communicates smart meters through power Line control (PLC) and collects all consumption data. The transformer meter is installed together with the transformer to measure the total input of electric energy under the transformer, thus, the line loss in this area can be calculated. Automatic Meter Reading (AMR) solutions is end to end smart energy metering infrastructure system which could help utility to closely monitor and manage the distribution network, the transformers, the energy meters, other assets, power trend, energy or power quality and the power factor from the customer loads that potentially increase congestion in the distribution network and consequently power loss address these recurring challenges. Finally analyzed technical energy losses and auditing of North Addis Ababa distribution lines the residential customers under a transformer were selected as the pilot site area which name is Tikur Abay matemiya North Addis Ababa District Service Number Five (LV, DTs) on AMI system and defined Energy loss reduction techniques.