Electricity Theft Costs Everyone
Posted by Steve Diebold
FINANCIAL COSTS TO UTILITIES
Statistics in recent years show losses of over $95 billion per year globally to theft or fraud (called non-technical losses.)
The same reports estimate about $6 billion in “technical” losses annually in the United States or about 1% of all electricity generated. This is not a topic of common discussion outside the industry. Utilities cannot normally write off the losses, so they are passed on to their customers. That is not obvious to customers because the cost is embedded invisibly within the rates charged. Here are some facts about the costs and how meter seals help reduce them.
COSTS TO SAFETY
The most common type of theft is a “bypass”. This connects electrical wires coming from outside the building to the inside wires of that building, without going through the meter. It is both dangerous and illegal, but unfortunately all too common. Estimated to be about 80% of theft. Both the person stealing the electricity and the people who might come near those connections are at risk. This includes utility workers, family members, neighbors, other workers who come near the connections, and even pets. It is not hypothetical. Serious injury and death are caused routinely by dangerous connections hidden outside the metering system. And the people who bypass or tamper with meters are the ones most likely to be harmed.
COSTS TO THE OVERALL ECONOMY
Whether a meter is bypassed or disabled in some way the result is a loss to the utility that is hard to recover. Because lost revenue from theft is passed on to the consumer, just about everything we buy is indirectly more expensive. Legal and administrative costs for recovery and prosecution are another shared economic burden.
Utilities, law enforcement, and the court system spend large sums pursuing and prosecuting those who steal electricity. The losses are piled on top of losses. Various frauds and scams, as well as creative efforts to avoid detection and penalties, add to the overall cost to our economy.
Successfully collecting from thieves is more complex than most would think. Rules and laws vary from state to state, and many “loopholes” exist. A creative attorney was able to convince a jury that because electricity is technically a potential energy that does not move. It is not something that can be contained in a vessel and carried so it cannot be “stolen”. It can only be accessed. So, legislatures and utilities have adapted and most now the laws and prosecutors are more often calling this crime an “unauthorized use of energy” as opposed to theft.
SEALS PLAY A ROLE IN LOSS PREVENTION
Tamper Evident Seals from AC&M have been used for revenue and loss protection since the earliest days of metered electricity delivery. Before injection molding of plastic was invented seals for detection of meter tampering were made of lead. Soon after a more convenient padlock type seal was made from stamped steel. These have been mostly replaced by advanced plastic and metal padlock seals plus high strength cable seals for commercial metering and bigger assets. However, the stamped steel padlock seals invented almost a century ago are still in use today.
Seals are the ID tag and guardian of most meter devices used today. They give utilities tamper evidence and the ability to know a lot more about a meter or other device according to the information the seal contains. This could be a color code, lettering, barcodes, or special markings. There are also seals with a space for writing with a date, signature or other details. All of these customization features of today’s seals help utilities in their revenue protection operations.
Proper seal use helps deter tampering and provides the evidence needed for prosecuting someone who is tampering with meters. The information from the seal helps with enforcement of laws, and successful legal claims to recover losses. A good revenue protection regimen that includes effective use of seals can be a source of large savings for most utilities. The income saved can far outweigh the cost of the program.
CONTACT US. WE CAN HELP.
AC&M (SEALS.COM online) is a US owned and managed manufacturer of all types of seals. Our 100 plus years of experience and fast professional service are available to you in multiple ways.
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