Ken Silverstein EnergyBiz Insider Editor-in-Chief

With high energy prices, a lot of customers are desperate. Some such as Klingel may rationalize that stealing power is a victimless crime, but the utilities that employ thousands and spend millions on upgrading infrastructure do not. Modern meters today are equipped with devices to aid power companies in their efforts to short-circuit such crimes. But many utilities without the latest technologies still rely on old-fashioned legwork and hot tips from other faithful customers.

"PECO's revenue protection organization conducts proactive area sweeps where theft is suspected or has occurred before," write Glenn Pritchard and Jeff Evans of Exelon's subsidiary PECO, in a story that appeared in Transmission & Distribution World.

"During a proactive area sweep, field personnel physically inspect all services in a specific geographic area," the authors add. "While some theft is identified and resolved, the deterrent value of a visible PECO presence is effective. In cases where theft has been validated, customers are billed for the time and materials necessary to resolve the theft situation. Historical usage data is used to identify the approximate start of theft."

Theft has been discovered in all kinds of premises -- industrial, commercial, agricultural and residential. The methods of tampering used vary from the crude to the sophisticated. It's difficult to put a dollar figure on the electricity stolen each year. Florida utilities say, for example, that they lose millions each year. Tampa Electric Company and Progress Energy say that they have investigated thousands of cases of theft and have recovered millions in the process, all in the last couple years.

Besides consumer education, tip lines and vigilant enforcement, modern technologies are used to avoid electricity theft altogether. Advanced automated meter reading systems not only can increase revenues and improve customer service but they can also curb pilfering by residential and commercial customers.

PECO identifies a few key methods it uses to catch thieves. In the Transmission & Distribution World story, it refers to a billing window, which involves shutting off meters during the periods when they are read, with the hope that the estimate will be lower than normal. It also calls attention to reversing meters so that they register decreasing power usage. And, finally, it notes that some customers will turn off their meters on the weekends and then turn them back on again during the week. PECO says that the latest technologies can pick up on all forms of theft.

Safety Issue

The problem of electricity theft is most pronounced in India, where an estimated one-third of all power is "free." Basically, the citizens there run wires from the distribution lines into their homes -- a tremendous hazard as the cables are strung through populated alley ways and corridors.

Government investigators -- power companies in India are publicly-owned -- try to stop it. But as soon as they leave an area where there is an illegal hook-up, the folks just re-connect and life goes on. The epidemic costs India's utilities close to $5 billion a year and helps push them in the red. The region, meantime, is growing at 8 percent annually. And that requires massive investment in infrastructure that must come from the outside. Without foreign capital, India will be hurting.

Meanwhile, China has identified close to 10,000 alleged criminals that include service industries that have connected directly to distribution lines. It's estimated that about 3 percent of the country does not pay for its electricity.

In Africa, electricity theft abounds in Kenya and Tanzania. While Kenya can't put a dollar figure on what is stolen annually, Tanzania estimates $6,250 worth of power is taken each day. "Down under," Australian electricity officials say that such stealing costs utilities there $15 million a year. And back in North America, The Jamaica Public Service Company has investigated thousands of alleged incidences. It says that about 8 percent to 10 percent of all power produced is stolen there.

All utilities know the pain of theft. Detroit Edison Company, for example, says electricity theft cost it about $40 million a year. According to the International Utilities Revenue Protection Association, 80 percent of theft cases are found in the residential segment while 20 percent are discovered in the commercial and industrial sectors. However, the commercial and industrial sectors account for 80 percent of the revenue that is lost from "stolen electricity."

It's not just an economic issue. It's a safety issue. Theft of electricity by people interfering with power connections or meters can maim and kill. Not only are offenders placing themselves at risk but they are also putting the lives of innocents who live and work nearby in harm's way. In situations where emergency personnel have to shut off power within a home, they are placed at risk of electrocution or burning because meters that have been tampered with may remain "live."

Hard times and high prices tempt people. But power theft is unsafe and a crime. It can impact corporate financials and the resources that utilities would allocate to the delivery and generation of electricity, affecting entire communities. And if that message doesn't sink in, then effective prosecution will.

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