(They have to propose fairly elaborate "rate cases" to regulators to justify increases.) Consequently, Barnes adds, they're turning to analytics to try to drive out costs and recoup some of the revenue they've historically lost to theft.
Because utilities are so heavily regulated, they can't simply raise their rates to make up the difference. Meanwhile, consumption has decreased due to conservation efforts. Over the past three years, he notes, utilities have seen their expenses rise with the cost of electricity. Today, more utilities are using analytics to identify consumption patterns that indicate theft.īarnes says market forces have compelled increasing numbers of utilities to turn to analytics. In the past, utilities had to rely on reports from meter readers and tips from customers. Just as electricity theft has grown in sophistication so, too, has utilities' ability to detect it. By applying purchasing seals to tampered meters, electricity thieves hope their illicit activity will go unnoticed. "For a fee, they'll either modify residents' meters or swap them out for tampered ones," he says.ĭo-it-yourselfers can buy stolen or tampered meters online, along with the keys and "tamper-proof" seals for those meters, according to Oyler. Indeed, Creighton Oyler, vice president of utility analytics at Oracle, describes teams of "meter fixers" who come through various neighborhoods, knocking on doors and promising to reduce residents' electric bills by, say, 30 percent per month. "And the thieves are getting more sophisticated." "Electricity theft counts among the top three challenges facing utilities," says Scott Barnes, a director with Deloitte Consulting LLP's Power & Utilities sector. energy industry at around $6 billion per year.² Individual utilities, including Austin Energy and Ameren Missouri, have reported losing millions of dollars in stolen electricity. Various estimates peg the cost of electricity theft to the U.S. Those motivated to take the risk include some homeowners and renters, individuals who operate energy intensive businesses like laundromats and car washes, and indoor marijuana cultivars.¹ĭespite the hazards, stealing electricity ranks as the third largest form of theft in the U.S., according to utility Pepco, behind shoplifting and copper theft. In many cases of meter tampering and electricity theft, perpetrators risk burns, electrocution, and even death.