Energy theft in South Africa

Meter equipment tampering and energy theft is a widespread problem in South Africa. Supply authorities experience losses relating to tampering ranging from 1.2 – 25% of total revenue. The intent of tampering is to reduce the account, without reducing consumption. It is by nature fraudulent. It is an economic and criminal offence. As a supplier of tamper evident, uniquely numbered seals to the electricity supply industry, we are constantly astounded that not more emphasis is placed on the deterrence of meter tampering and energy theft and also that our judicial system seems so ineffective and lenient when dealing with energy thieves.

Profitability & Sustainability

There are no non-criminal reasons for meter equipment tampering. It is an illegal act whereby someone suffers prejudice and consumption is misrepresented. Having ineffective or no deterrent mechanisms in place will prevent the supply authority from having any reliable recourse for action. The core objective of any utility should be making money to be both profitable and sustainable. Unless supply authorities embrace a zero tolerance attitude towards electricity thieves, energy theft will continue unabated and will keep on eroding the profitability and sustainability of energy distributors.

Eskom and Revenue Protection

The energy crisis of 2008 brought South Africa into the spotlight, and not for favourable reasons. Mismanagement of the utility, Eskom, is heralded as the primary reason for this. Although the debilitating effects of frequent load shedding seems over, the country is still struggling to digest the recent tariff hikes implemented by Eskom. Embittered public opinion is that the consumer is paying for the impact of this inefficiency. Some portion of the energy crisis must surely be attributed to the ineffective manner in which energy theft, wasteful usage and non-payment has been handled by policy makers and supply authorities in the past. It is common knowledge that current legislation is inadequate and simply too 'thief- friendly.' But until management of the utility and the smaller local municipalities take ownership for the problem, implement measures to deter this crime and ensure the punishment fits the crime, energy theft and non-payment will not miraculously go away, it will simply continue on its perpetuated cycle.

The Controversy

Energy theft is a controversial issue when viewed through political eyes in South Africa. In a misguided attempt to gain public support, politicians frequently turn a blind eye to meter tampering. Disconnecting perpetrators or taking harsh punitive action is often avoided as this is 'unconstitutional' or 'discriminatory.' This unfortunately merely perpetuates a culture of non-payment. The reality remains; energy theft is a deliberate act of fraud. Both the national utility, Eskom, and all the local municipalities have indigent policies in place to enable service provision to lower income earners. Meter tampering often occurs under the guise of socio-economic justification. It is not a socio-economic problem. Meter tampering is rife across all cultural groups and economic bands and is also surprisingly high in industrial and affluent areas. As long as government and industry are in conflict over the severity of energy theft, those guilty of these acts of fraud will continue without deterrence.

Emerging Best Practices to Curb this Scourge

Utilities and supply authorities have to elevate the importance of revenue protection as a critical business function. This function requires strong leadership and should be adequately managed, staffed, trained and funded to implement effective strategies to deal with this ever present threat. It has been proven in a recent case study conducted by Integrity Control Systems that supply authorities who have disciplined revenue protection strategies in place, are more likely to succeed in curbing non-technical losses than those who don't. Some of the physical steps taken to minimize meter equipment tampering include:  the installation of meters in secure kiosks outside the customer's premises or installing meters on pole tops to deter undetected tampering. Some supply authorities are implementing smart meters which claim to be sophisticated enough to deter tampering electronically. Numeric sealing is also a simple, cost effective way of securing meters to deter unauthorized entry and to create a chain of custody. Seals are however not stand alone solutions; they have to form part of a broader sealing protocol.

Sealing Technologies

A security seal is a passive, one time locking device, with a unique serial number / identification / bar-code that is used to provide a reliable indication of tampering (unauthorized removal or attempted removal) or entry. It should not be possible to manipulate and breach a seal without clear visual indication thereof, nor should it be possible to cannibalize a seal to construct another functional seal. Seals provide an audit trail and help to identify the point of liability in the event of an incident. Without this, supply authorities cannot prove the criminal act and subsequently have no recourse.

Seals are available in various materials but common industry practice is to utilize uniquely numbered and branded seals manufactured of polycarbonate with a stainless steel wire tail. The transparency of the material facilitates easy identification of tampering. Polycarbonate's other advantages include its impact strength, durability, colour and UV stability. These are critical considerations as seals typically have longevity expectations of up to 15 years. Meter tamperers are skilled in their deceptive vocation. The design complexity of certain seals therefore helps deter manipulation and counterfeiting.

Associations & Standards

Although much remains to be done with regards to minimizing revenue theft in South Africa, organizations such as the AMEU (Association of Municipal Electrical Undertakings) and SARPA (South African Revenue Protection Association) are very proactive in creating forums for members to discuss their problems and to jointly explore possible solutions through shared learning. Eskom and industry are also actively involved in compiling NRS (National Rationalized Specification) specifications which establish and promote uniform requirements for application in the South African Electricity Distribution Industry. NRS 055 is the Code of Practice for Revenue Protection and, supporting this, is NRS 096, the sealing of electricity meters. Both these specifications exist to educate and guide members and supply authorities to drive and manage successful revenue protection initiatives within the framework of local by-laws.

Conclusion

Every unit of energy counts and resources are finite. As the cost of energy rises, incidents of tampering and theft will increase, with dire consequences. Our struggle will become even more complex and challenging unless a paradigm shift takes place and management accountability is key. The cost of the solution will never exceed the cost of the losses. By doing nothing, we silently condone and foster a culture of crime.