Energy theft

The background

• Energy theft in Great Britain is a growing concern, as it ultimately impacts all customers. It is estimated to occur in one in every 150 residential homes.
• Tampering with meters, electricity wires and/or gas pipes is extremely dangerous and poses serious risks of injury or death, to those doing it and to those nearby. It can also lead to property damage, supply disruptions, a fine, or even a prison sentence.  The dangers from energy theft are believed to cause one death every 10 days in the UK.
• There are many ways of stealing energy:
  • Tampering with wires or pipes;
• • Setting up a new, unauthorised connection from an existing, legitimate supply without that customer’s knowledge
  ;
• • ;Using false pre-payment meter cards or keys;
  • Altering the mechanism on a meter that registers the units used at a property to make it look as if less energy is being used.
• The energy regulator, Ofgem, places stringent obligations on energy suppliers requiring them to detect and prevent cases of energy theft and ensure appropriate metering arrangements are in place for all customers.
• Energy suppliers also continuously try to better detect and prevent energy theft through campaigns, blogs, working closely with police, and raising awareness through marketing campaigns – publishing blogs and FAQs, for example.
• Energy theft results in financial costs that end up on all customers’ energy bills – for example, lost revenue, operational costs, distorted financial forecasts, and disruptions to other customers’ supplies. 

The challenge

• Energy theft is getting more challenging and more costly. The Retail Energy Code Company (RECCo) estimated costs of energy theft as being between £830 million – £1.39 billion per year, which translates to an average extra £29-48 annually for all residential customers’ energy bills.
• Energy theft continues to evolve, meaning energy suppliers must remain vigilant.

What’s the solution?

• If customers are struggling with energy bills, they should talk with their energy supplier to see what help is available, such as grants and schemes or energy efficiency tips. Customers can also report cases of energy theft directly to them. Citizens Advice also offers free, independent and impartial advice on energy bills and debt.
• There are charities in place to report energy theft, such as CrimeStoppers. It offers a service called Stay Energy Safe that allows you to report energy theft anonymously, either online or directly by calling 0800 023 2777.
• Education and training programs around energy theft are available. If you are concerned about energy theft or wish to know more, you can contact the UK Revenue Protection Association, the trade association for detecting and dealing with energy theft. It leads collaborative efforts against energy theft via education, advocacy, and technology deployment.
• Smart meters can be useful in detecting and preventing energy theft. They can also help protect customers from energy theft – for instance, where their meter is tampered with, and energy is being consumed by a neighbour.
• Increased data sharing and analytics on energy theft would enable the industry to better understand theft and strengthen solutions. RECCo’s consultation on the Theft Detection Incentive Scheme (TDIS) with industry is welcomed. A review of other existing mechanisms such as Tip-Off services should also be held to ensure is it keeping up with the current environment.
• While the industry is already working together to address energy theft, more could be done to understand how theft is evolving and how to respond to it. Energy suppliers, Ofgem and RECCo, along with partners including the police and CrimeStoppers, should continue to innovate to prevent, detect and address energy theft.