Energy utilities around the world address this growing problem
Theft costs utilities and their customers billions of dollars each year, and also results in the death of thieves, innocent bystanders, public safety personnel and utility employees. Until recently methods for stealing utility services were marketed through the mail, or learned from friends and relatives, but today they are discussed on Internet newsgroups and in chat rooms. There are at least two commercial companies selling ‘how to steal’ information on the Internet.
Every utility should have a revenue protection programme that identifies thieves and recovers lost revenue. The need becomes more critical in areas where line losses exceed 20% and a utility can only operate with government subsidies or international loans. Safety and risk management are also important issues – in many countries, a utility can be sued for not providing adequate protection at its meters if someone is killed while stealing energy.
Wholesale energy theft combined with a limited supply of electricity can have a devastating effect on the economy of emerging countries. This was the experience in Kenya and Tanzania, when these two countries experienced a power crisis that resulted in rationing in 1999 and 2000. While the utilities are working to decrease energy theft, current losses in Tanzania alone are estimated to be $6,250 per day.
The following examples are provided to demonstrate the international challenge that energy theft presents. The countries mentioned are addressing the problem, sometimes against what appear to be overwhelming odds.
Africa and the Middle East
In 1999 the Kenya Power and Lighting Company conducted an investigation into theft of service at industrial, commercial, agricultural and residential sites that resulted in the arrest of 675 suspects. The Electric Power Act of 1997 provides that a conviction for stealing is punishable by fines of up to Sh30,000 ($380) and/or up to two years in prison.
Utilities in South Africa are working hard to reduce revenue losses. In a squatter camp outside Durban, parents caution their children to wear shoes and to look out for electricity wires on the ground that are used to steal energy. After three children had been electrocuted by illegal wires, the area was raided. When the utility personnel and the police arrived at the scene, they found that a number of people did not have electrical connections, but did have electrical appliances. The illegal connections had obviously been removed before the raid, and were re-established minutes after the police had left.
Some South African thieves are more sophisticated than others. In one area thieves were connecting directly to the local substation, running a line back to their homes for free power.
Power theft is also a problem in Israel, where traffic by the Knesset was disrupted for several hours when all the street and traffic lights were out as a result of illegal connections to power lines. In 1997 the lights went off in a major section of Rehov Ruppin as a result of electricity theft by people in a camp for the homeless. The utility could not meet peak demand because of the amount of electricity being stolen.
The Pacific: Guam, Australia and New Zealand
In 1997 Guam made a commitment to address its energy theft problem. The legislature declared the theft of electricity a threat to the security of the island, and made stealing a criminal offence. The utility worked with the police to detect and prosecute energy thieves, and back-billed $5.8 million to customers caught stealing. It also identified a number of unlisted meters and meters with the wrong multiplier or other revenue protection problems. The Guam Power Authority proved that an aggressive programme, with government support, could be extremely effective.
Australian utilities estimate they are losing $15 million to utility thieves each year – much of it being stolen by indoor marijuana growers. This is not surprising. An investigation of an indoor grow operation in the United States showed that the resident’s monthly utility bill was $150, but that usage was $1,500 per month – ten times the actual bill. If one is caught stealing energy in Australia, one can be fined up to $20,000.
And if one is caught stealing energy in New Zealand, one may go to jail. Ricki Boulder of Christchurch was sentenced to one month’s periodic detention and ordered to pay $168.57 reparation after admitting to stealing electricity in 1999. Robert Murray Waghorn of Oxford was sentenced to three months’ periodic detention, and had to repay $2816.08. Waghorn, who had drilled a hole in the side of his meter and used a match to stop the disk, did not deny stealing the electricity, but denied he was stealing an average of $66 per month.
India, Pakistan and China
India is a country in the midst of an energy crisis. In the state of Delhi losses rose from 23.6% in 1993 to 47.9% in1998. Overall it is estimated that 21% of all the electricity generated in India is stolen.
In an effort to reduce losses in targeted areas, at least one utility has negotiated a deal with dadas, local organised crime, to become power contractors. Mafia men can now bid for local power contracts. They pay a lump sum for power supplied to a master meter, from which residential meters receive energy. Revenue collection is left up to the mafia, who receive a 25% commission.
Energy thieves in India include slum dwellers and utility employees. When utility employees attempted to investigate energy theft in the Gyaspur camp, residents responded by throwing stones at them, and police had to be called in. It is believed that the 2,000 residents of the camp have been using electricity illegally for the past 20 years. Meanwhile, three employees of Haryana Vidyut Prasaran Nigam were charged with the installation of fake electricity meters and illegal power connections. They were paid between Rs2,500 and Rs5,000 ($50 – $100) to rig meter installations. A contractor working with them was also charged.
Indian utilities believe that their major losses are the result of commercial and industrial theft. Penalties for energy theft are a fine of Rs100,000 ($2,000) and/or a prison sentence of up to five years.
In 1998 the government of Pakistan activated 30,000 members of the armed forces to help in the fight against power theft. According to the preamble to a new ordinance, “the menace of stealing electricity is rampant, necessitating calling upon the armed forces of Pakistan to act in aid of civil power to suppress the said menace and to provide for the speedy trial of offences.” It was estimated that 40% of the energy generated by the Water and Power Development Authority was being stolen.The offenders were not all impoverished – of the 87 members of the upper house of Parliament, 49 were accused of stealing electricity, for a cumulative annual loss of $232,000.
In 1998, when China launched a major campaign against energy thieves in the northeastern part of the country, 9,796 offenders were identified. The Northeastern Utility Group estimates that about half the service industries in the area are engaged in energy theft. Many connect themselves directly to distribution transformers.
A scrap dealer in Stanley, near Wakefield, learned that he could significantly save on his electricity bill by plugging into a lamp post and powering his outbuildings, workshops, four colour televisions, lighting and domestic appliances. When the defendant asked what he was charged with, he was told: “About 50,000 volts.” He was found guilty.
A raid on an indoor grower in London found marijuana with a street value of about $100,000. The grower was saving money on his light bill by routing the power around the meter. He was charged with possession of marijuana for the purpose of trafficking and with the theft of electricity. This was one of several raids, and in all the cases the growers were using hydroponic growing equipment, grow lights and environmental controls. Their biggest expense after purchasing the growing equipment is electricity. Of course, it isn’t an expense unless one is actually paying for what one uses.
Caribbean, Central and South America
Jamaica Public Service Company is making a concerted effort to combat its theft problem. The utility conducts early morning blitzes into high crime areas – always accompanied by police officers – and aggressively targets commercial and industrial theft. In one month alone the utility investigated 4,755 suspected cases and found 1,348 irregularities. Total losses are estimated to be 8-10% of the energy generated.
Other islands like Barbados experience total line loses of less than 6%, and have a limited revenue protection problem. This is because the utility established an effective revenue protection programme years ago, and has maintained its commitment to reduce losses.
In the early 1990s the theft problem was so serious in Cap Haiten, Haiti that the power company went out of business. In the Dominican Republic the government moved every meter back to the pole or pad transformer to reduce theft. However, energy shortages continued, causing President Leonel Fernandez to declare the power shortage his top priority.
In Latin America the problem is not just power theft, but also refusal to pay bills and system unreliability. In Brazil consumers created the “I hate the light” Internet site to vent their frustrations. Vigilante groups intercept repair crews and threaten them if they don’t fix the transformers in their neighbourhoods. One major utility in Brazil reports that its chief concern is theft from larger accounts. These cases involve large losses and are more difficult to detect, since the companies usually hire professionals to rig their meters.
Douglas Marcellus of Bowness was not the smartest marijuana grower in Canada. The utility and the police noticed he was using large amounts of power, and searched his home, to find 83 marijuana plants. Most growers know they have to conceal their activities by stealing the energy they use.
Eric Penfield understood this but was caught anyway. He was found with 500 plants and charged with trafficking and stealing electricity, but he almost beat the charges. A lower court judge ruled that the charges should be dis-missed because Penfield was bitten by a police dog during the raid. The lower judge stated his: “Charter rights were breached by the use of a police dog.” An appeals court judge overturned this ruling and ordered a new trial.
How embarrassing it is for a utility to discover in 2001 that at the end of World War II one of its customers returned home and connected himself to its lines! He was only detected after 56 years of continuous energy theft because he called to complain about an outage. The utility is only back-billing the man for three years, for a total of $82,000. That means he stole (at today’s rates) approximately $1,530,667.
There are no true estimates of the amount of energy stolen in the United States, but most major utilities with a revenue protection programme recover more dollars annually than the amount they invest in the programme. Detroit Edison Company estimates it may be losing $40 million a year to thieves. In one case the utility charged a customer with stealing more than $7,800 of electricity to power his $1.5 million home. This customer was sentenced to a $15,000 fine and two years’ probation.
As in other parts of the world, energy thieves in the US often become ‘no repeat offenders’. In 1999 a customer in Arkansas who had been disconnected for non-payment and had the fuse removed from the transformer climbed the pole, put a new fuse in the transformer and attempted to close the disconnect switch with his hand. In 1997 a fire at a rooming house in New York that was the consequence of energy theft resulted in the death of two people. In Georgia a man placed jumpers in the meter socket that caused a fire in which his seven-year-old daughter died, while his house was destroyed.
Energy theft is a problem that is not going away. Those of us committed to combating theft are in a growth industry.