Research

Assessment #5

Name: Hansvi Patel

Date: November 17, 2017

Subject: Electricity Theft

MLA Citation:
Kelly-Detwiler, Peter. “Electricity Theft: A Bigger Issue Than You Think.” Forbes,
Forbes Magazine, 23 Apr. 2013,
www.forbes.com/sites/peterdetwiler/2013/04/23/electricity-theft-a-
bigger-issue-than-you-think/#1dba64745ed7.

Analysis:
I chose this article after taking the time to think about what I actually wanted to
create for my original product. When I had to do my research presentation, I summarized
all that I had learned from my interview and research assessments; however, one thing that
continued to stick out was the topic of lights (which was brought up in my interview). After
doing some research, I realized that electricity theft is still a problem around the world,
which is how I came upon this article. I know a little bit about this problem today from
stories that my parents have told me of incidents in India where people in the poor parts
get free electricity. However, I wanted to learn more about this issue and found this
particular article to be very informative.
I found some interesting information related to electricity theft; this was that about
$6 billion of electricity is pirated in just the US alone. I knew that electricity theft was a
problem, but one that existed in more developing countries where electricity is not easy to
pay for by the people. What I found was that most of the county’s electricity theft occurs
close to home, as there is a lot of thefts in Texas. Companies have started to place smart
meters to prevent this issue, as it alerts a company as to when the electron flow is
changing. Even with the smart meters, people are finding ways to tamper the machines and
get around them. This is important to my ISM journey this year, as I want to create a
product that tampering is very difficult or nearly impossible. Ideally this would have to be
something small.
After reading this article, I am thinking that I might create a smaller version of the
smart meter or a product similar to solar panels except cheaper. There are many reasons
why electricity theft occurs; however, the most common reason has to do with the fact that
people are unable to pay for electricity but need some form of light, which they can use
when sunlight is not available to them (stormy night or in the evenings once the sun sets).
The weather also causes power outages, so I will also have to be cognizant that I create
something that is made of something that won't be affected by the weather or evenfall off
during a bad storm. The reason I want to make a small product has to do with the fact that
many smart meters are being tampered with, and people are finding ways to get around
the smart meters. However, if the product is small, people may not even realize that there
is a smart meter placed and you can catch the people stealing electricity. In practicality
though, this product would have to be placed on the electricity poles, which can be an issue,
as if the product is small, it could fall off during in bad weather. I would need to think more
on this idea to determine its plausibility.
The part of the article that I did not understand was how it is possible to steal the
smart meters. If you are so poor that you cannot afford to pay for electricity so you have to
steal it, where do you get the skills to disable the meters or how do you even discreetly do
it. This really confused me, and I can not seem to understand how people just away with
stealing electricity, as I do not think that this is something people can just get away with.
This issue has really been puzzling me, as if I want to create a product that will not be
stolen I need to understand why people are trying to steal in the first place. However, I
think this issue will be addressed when I make the product small (but sturdy).
Overall, I realized that electricity theft is a bigger issue than most people know
especially in Texas. After reading this article, I realized that I am probably going to create a
product that will address this issue or improve an existing product. Many people just take
the electricity they use for granted, but they may not realize that electricity is not easy to
come by for many people. By creating this product, I will not only be able to make a
difference, but I will also be able to help educate many people on this issue, which even I
did not realize was such a big issue until I read this article. (Article on Page 3 below)
Electricity Theft: A Bigger Issue Than
You Think
APR 23, 2013 @ 09:50 AM

Peter Kelly-Detwiller, CONTRIBUTOR

I cover the energy industry.

Opinions expressed by Forbes Contributors are their own.

Earlier this month I had the opportunity to attend Doble Engineering’s 80th International User’s
Conference in Boston, in which 1300 utility executives from 35 countries gathered to trade
experiences, attend workshops, and see the newest utility testing gear from Doble (A subsidiary of
ESCO Technologies). This was a good opportunity for me to talk to various utility execs and find out
what was on their minds.

One of the keynote speakers was B.C Hydro’s Patrick Hogan, Vice President of Transmission and
Distribution Engineering and Design. His job, simply put, is to make sure electricity gets from the
generation stations to the homes, stores, and factories that use it.

At one point in his presentation, Hogan alluded to the value of smart utility meters in preventing
theft, so of course I had to follow up on this. I had read that electricity theft in a country like India
might result in a loss of up to a third of the power generated, but I figured it would be no more than
a couple percent in any utility jurisdiction in North America.

It turns out that B.C. Hydro may be losing up to 3% of its electrons to theft. An excerpt from BC
Hydro’s smart metering & infrastructure business case states:

"Legitimate customers bear the cost of electricity theft, which has grown significantly from
approximately 500 GWh (gigawatt-hours) in 2006 to an estimate of at least 850 GWh today—that’s
enough power to supply 77,000 homes for a year and amounts to approximately $100 million a
year in energy cost.

Although BC Hydro has identified over 2,600 electricity thefts over the past five years, identifying
and confirming theft is a time-consuming, inefficient and expensive manual process. While BC
Hydro cannot reasonably expect to eliminate all electricity theft, augmenting the current manual
process with new technology will substantially reduce current levels of theft by:

Theft detection—New distribution system meters (different from those to be installed at customer
homes or businesses) located at key points on BC Hydro’s system will measure electricity supplied
to specific areas Combined with software tools to enable electricity balancing analysis, distribution
system meters will help BC Hydro identify electricity theft more accurately and address it more
quickly.

Tamper detection— Smart meters have a tamper detection feature that automatically notifies BC
Hydro if they have been removed from the wall or otherwise manipulated. Electricity theft results
in higher rates for legitimate customers."

According to Hogan “We don’t know where it all goes, but we do know the majority goes to growing
marijuana.” And the thieves are not amateurs. “They tap into 12 kV or 25 kV lines. These people
have utility lineman experience.” They also have a great deal of ingenuity. “We’ve seen where they
hollowed out the utility poles, tapped into the power line, and then ran underground to their
operation. They even put in their own transformers. Smart meters can help put a stop to that,
because we have a better sense of where the power is going and when it is used.”

A quick trip to B.C. Hydro’s website on electricity theft further highlights the issue of what they call
“Grow Ops: Problems associated with marijuana grow-ops include:
• Electricity theft: Most electricity theft in British Columbia is related to marijuana grow
operators who seek to avoid detection from law enforcement or electrical and fire safety
officials.
• Safety issues: Marijuana grow-ops create safety risks for BC Hydro employees, first
responders and the public.
• Damage to the grid: Power surges and electrical system failure due to high loads can
cause power outages and damage to BC Hydro equipment and infrastructure, including
the premature failure of distribution transformers.
• Electricity waste: Illegitimate consumption of electricity by marijuana grow-ops is a
waste of electricity and an affront to the conservation efforts of legitimate customers.

In response to the issue, BC Hydro has set up an anonymous tip line, and the promise that if a tip
leads to arrest and trial, the informant doesn’t have to appear in court. The utility also has its own
team of ex law enforcement officials who pursue thieves. Within three years, they had shut down
over 1500 ‘electrical diversions’ associated with grow ops and recovered $5 million in lost
revenue. The utility also responds to over 5000 police requests a year for utility usage information
– that information often shows unusually high electricity consumption and usage patterns that
indicate use of energy intensive grow lights and fans.

In British Columbia, much of this cultivation is moving to
rural areas, but in other areas of Canada, it’s very much an
urban phenomenon. An estimated $500 million of electricity
is stolen in Ontario, in more urban areas. Across the country,
there may be as many as 100,000 indoor grow-ops.

Image: Planetforward

But if you think the problem of electricity theft is limited to Canada, think again. Estimates are hard
to come by, but it is believed that up to $6 billion of electricity is pirated in the U.S., which would
put electricity high on the list, as the third most stolen item, after credit card data and automobiles.

It’s not all stolen for pot growing: In Houston in 2010, with the heat wave, power theft was
epidemic. Law enforcement in that city was quoted as saying: “We can go to almost any apartment
complex in the city and after looking at two or three buildings, we can find probably at least 60 to
70 percent of the meters have been tampered with.” In Houston alone an estimated 10,000
customers were stealing power. Total costs to Houston ratepayers were estimated at $14 million.

To find out more about the situation in Texas, I interviewed Susan Neel, Senior Director of
Electricity Market Operations at CenterPoint Energy, a utility with 5 million metered electric and
gas customers headquartered in Houston. Ms. Neel estimated the problem there to be about 1% of
total electric load, and about 2% of the electricity provided to the residential and small commercial
sector where the theft is more prevalent. “You never know exactly how big the problem is since our
product is not in inventory. We’ve had some instances where the load was so big that it melted the
transformers, which poses a huge safety risk to both thieves and the general public.”

Like BC Hydro, CenterPoint has a special unit to focus on revenue protection, and smart meters are
a first line of defense “smart meters give us real-time alerts when somebody is trying to tamper
with the meter. We know it immediately, whereas in the old days, we might not know for months.
That helps protect us from lost revenue.”

CenterPoint's revenue protection unit is also charged with going to the scenes where theft has
taken place, and gathering evidence for potential prosecution. Neel notes that this job can be risky,
since “a good portion of this stolen electricity is believe to support marijuana “grow-ops. The grow-
op people tend to be more creative in stealing power. Since our main job is to protect our
employees, if we do go out to ascertain a potential grow-op situation, we have law enforcement
accompany us.”

To combat this problem, CenterPoint also works with other Texas utilities who meet once a year to
share best practices in revenue protection. They also share information with a larger group of
Southwestern utilities.

Electricity theft is a significant economic issue that is by no means limited to CenterPoint in
Houston, or British Columbia’s B.C. Hydro. It is pervasive throughout North America, and across the
planet, for that matter. Some progress is being made in fighting this scourge, but utilities concede
that it continues to be a significant concern. And while smart meters can help, there have been
some reports of hacking into the smart meters themselves. By all accounts, the problem of
electricity theft in North America is not going away anytime soon.