Revenue Protection Book - Front Cover

In most of the industrialised world, utility losses resulting from theft are considered ‘manageable’ – that is, around 2% or less. However, in many emerging nations losses range from 20% to over 50% of the energy generated. Since a stable energy supply is required to attract industry and investment, high losses can have a devastating impact on the potential growth of these nations. Occasionally a ridiculous revenue protection investigation will be reported in the news.

In Germany a man who was seen by police officers connecting his computer to a power source at the train station was charged with stealing 0.2 euro cents (0.25 US cents) worth of electricity. Suspecting that his laptop was stolen, they arrested him. He proved the computer was his own, but prosecutors still opened an investigation on suspicion of “removing electrical energy”.

In Japan alert police nabbed two men for stealing electricity worth about 1 yen (less than one US cent). One was caught red-handed while using a power outlet intended for a restaurant’s neon sign to recharge his mobile telephone. The other thief, a 22 year old street performer, was arrested after unplugging a vending machine in order to power his portable stereo. Police said they could not let the incidents slide, although the total value of the electricity was small. Both men confessed and were let off with a reprimand. According to the Times of India, officials of the Jharkhand State Electricity Board raided some residences and lodged police complaints against a dozen people for stealing electricity. One of those charged was a one year old boy, Harsh Chaudhary. “How can a one year old who depends on others for food and everything steal electricity?” asked Suresh Chadhary, Harsh’s father.

While cases such as these appear musing, they can influence public and judicial attitudes towards theft of utility services. “After all, it’s only a little bit of energy (gas or water). What’s the big deal?” The big deal is that neighbours are less likely to report energy theft, and police are less likely to consider it a serious crime.

TYPICAL ENERGY THEFT CASES

In reality, theft of utility services is a serious threat around the world. Honest customers pay for the services stolen, and dangerous situations are created. In Lenox, New York, a man was charged with stealing an elderly couple’s meter and $1,400 worth of electricity. The meter was stolen from an unoccupied home owned by the couple, who called the police after their monthly bill jumped from $43 to $1,414. The stolen meter was found at the defendant’s house. The man had been supplying energy to his house by running the engine of a small rusty truck that powered a battery pack. Neighbours noticed that he had recently stopped running the truck engine – but the truck was running again after he was charged with felony grand larceny and petit larceny. A man in Waukesha, Wisconsin has been charged with stealing at least $36,000 by bypassing his natural gas meter to heat his in-ground swimming pool and two outbuildings.

According to the deputy district attorney, the amount was based on theft for the past ten years, but he may have been stealing for as long as 30 years. The utility said the $36,000 estimate was conservative. Jamaica Public Service (JPS) has re-established an aggressive revenue protection programme. In the first three months of this year 68 people, including business operators, have been arrested and charged with illegally connecting to the JPS power grid. The company is using new GPS technology and intelligence programs in its customer information system (CIS) to identify potential problems, which are then investigated using field information and specialised test instruments. During a recent audit of one feeder grid (serving approximately 1,000 customers)

JPS found electricity theft among commercial operations at about 30%. In April 2006 the company announced a 30-day amnesty programme as part of a drive to reduce electricity theft by $420 million this year. The programme ran from April 10 to May 9, 2006 and was open to all persons illegally connected to the system. JPS will not press electricity theft charges against persons who apply for amnesty. Additionally, there will be no back billing for the electricity stolen, no additional deposits will be required, and payment plans for the arrears, if they were disconnected for non-payment, will be worked out on a case-by-case basis. India faces an energy theft crisis. In March 2006 North Delhi Power Limited found two ice factories, four steel polishing units, a single point delivery contractor and 1,350 houses stealing electricity. In a raid on 36 commercial shops, not one was found to have an electricity meter.

Under the 2003 Electricity Act, those shops can be charged 30 times their connected load. On the island of Cyprus a pub owner recently pleaded guilty to tampering with his meter and stealing £2,520 worth of electricity. His lawyer claimed: “My client did not know that he was breaking the law. The power kept dropping in his pub, so he paid someone to fix his meter – which is what he thought happened.” On Malta, Enemalta reports that 17.7% of the energy generated is unaccounted for, and that theft may account for 12-14% of the total
losses. The company inspects about 250 meters a week; 7% are found to be stealing electricity. Stealing electricity often creates dangerous situations.

Indoor Marijuana Operation

Consider this excerpt from a letter to the editor of a newspaper in Guyana. “These people have dug up the tar road to run wires and some even ran the wire across the road. When I spoke to them about the danger they started abusing me, saying if I don’t want to steal electricity too bad for me. They would have one special person connecting the wire in the night and disconnecting in the morning for a fee. Some of these people have businesses operating washing machines, freezers, fridges, etc. On weekends it’s party time with all the boom boom music sets. “The amazing thing is that some of the GPL crew that comes around helps the residents set up the connection for a raise. One crew even helped set up a post with an illegal connection in front of a business place.”

DANGEROUS ACCOUNTS

Conducting a revenue protection investigation at a ‘normal’ account is challenging. Conducting an investigation at an account where illegal drug activity takes place can be fatal. On March 3, 2005 the Royal Canadian Mounted Police (RCMP) raided a cannabis-growing operation on a small farm in rural Alberta. The owner of the farm, James Roszko, began firing at them with a high-powered rifle. Four Mounties were killed in the shoot-out, as was Roszko. This was the first major loss in RCMP history since 1885. Police estimate that there are at least 50,000 houses in Canada used for the sole purpose of growing marijuana.

The average ‘mom-and-pop’ crop of 100 plants produces an annual profit of over $110,000, while a medium crop of 500 plants averages $350,000. Since most of these operations are stealing electricity to cover the high energy consumption, the average ratepayer in Canada probably pays an additional $34 per meter to offset what is stolen by the growers. BC Hydro estimates that it has 15,000 to 20,000 marijuana grow operations in its service area. Many are not stealing electricity, and their electricity bills are excessively high – but the utility is not allowed to report these accounts to police because of privacy restrictions. The province is considering legislation that would require BC Hydro to provide authorities with a list of addresses with unusually high power consumption; police believe this would result in a major dent in the province’s $7 billion marijuana trade. British authorities report an explosion in cannabis production.

In London alone there may be at least 300 indoor grows producing drugs with a street value of £150 million, and the growers often tamper with the electricity and gas services. Many of these operations are run by Vietnamese gangs; in one raid, Scotland Yard officers found around 600 plants spread across four floors, and arrested seven people. Metropolitan Police have raided 255 indoor grow operations in a single year . In Thurston County, Washington (US) agents raided an indoor marijuana growing operation that was yielding $1 million a year. The pot farm had been in operation for at least two years, and the growers were stealing electricity worth at least $1,000 per month. In Tennessee police found a grow operation inside a cave. A house had been built over the mouth of the cave to disguise the operation, and the cave contained 800 marijuana plants. The utility had wondered why it had had to install a larger transformer than normally required for a residential service, but that still wasn’t enough energy – the growers had tapped into the utility’s lines on the other side of the transformer to handle the load needed for the operation.

In Australia electricity and water authorities estimate that cannabis growers are stealing $A160 million each year. As in other parts of the world, these losses are passed on to honest consumers. Utility employees should be aware of the indicators that a building may house an indoor marijuana grow operation. They include the following:

• Strange people visiting the house at unusual hours.
• Residents are rarely seen.
• No-one ever sees a moving van and furniture arrive.
• Blinds are drawn or the curtains are always shut.
• Lights are on but no-one is ever at home.
• Moisture or condensation forms on the windows.
• The roof is dry on chilly mornings.
• A humming noise, like a fan, is audible.
• Windows are covered with foil or other material to preserve heat in the home.
• Basement windows are boarded up.
• There is growing medium in the yard but no garden.

SUMMARY

The theft of utility services remains a challenge around the world. It may be far worse in some countries than others, but every country has a problem to some degree. Utilities need to address this problem so that losses are not paid for by honest consumers. An increasing challenge to revenue protection investigators is the theft of services at illegal drug operations.

These services are high energy users, and often most of that energy is stolen. In addition the people running these operations are criminals who may become violent when confronted. If a utility employee suspects a drug operation is taking place, police should be notified. The utility should not begin the revenue protection investigation until the police have secured the scene and removed the suspects. If you ever doubt the potential for violence at a drug operation, remember the four members of the Royal Canadian Mounted Police who were killed on March 3, 2005.