Utilities: Give these 3 answers when your regulator asks how you deal with theft
In March, Alan Snook stopped by to argue that it's time to get tougher on energy theft. He explained how distribution transformer monitoring can help. Now Kevin Mays is here with three suggestions you can implement if you are looking to reduce non-technical losses. - Jesse Berst
By Kevin Mays
Energy theft: The $6 billion elephant in the room
Six billion dollars is a difficult number to fathom. Because the 2012 presidential election cost that much, NPR tried to help people visualize what $6 billion actually means by reporting that it could purchase 15,503 Lamborghini Aventadors, 18 million iPad minis, 451 small hospitals, or 545,454 1-carat Tiffany diamond engagement rings.
According to estimates, it’s also how much energy theft costs U.S. utilities every year in lost revenues.
That number is even more remarkable when you realize the United States doesn’t have that big of an energy theft problem compared to other countries. An estimated 2% of the power generated in the U.S. is stolen each year. In contrast, India loses one third of its energy to theft. In some parts of Asia and Africa, the number is 50%.
On a macro scale, it looks like the U.S. is in pretty good shape, relatively -- but in absolute numbers, $6 billion is too much and is worth fighting to lower.
That notion is something that hasn’t been lost on public utility commissions, who are putting increased pressure on utilities to bolster efforts to curb energy theft. Because revenue lost to theft is subsidized by utility customers through higher billing rates, everyone who legitimately uses electricity can benefit from more secure power delivery. This puts utilities in the precarious situation of being compelled to tackle a problem that has no simple turnkey solution.
Fortunately, there are several steps that most utilities can take right now to crack down on energy theft.
1. Energy bill analysis and reconciliation
A simple step requiring no investment in infrastructure that almost any utility can immediately implement is to thoroughly analyze bills. This serves two main purposes: First, it enables identification and collection on past due bills (unpaid bills are considered a form of energy theft). Second, a detailed analysis of documented usage can uncover suspicious discrepancies that lead to discovery of more sophisticated forms of energy theft.