Some Try to Con Edison

In the back of a dingy duplex in South-Central Los Angeles, utility investigator John Foegen pulls two battered electric meters from their wall sockets and smiles.

“Well looky here,” he said with satisfaction, pointing a gloved finger at two thick strands of red wire jammed into the guts of the utility panel. Someone has helped himself to free electricity, using a hot-wiring technique that skirts the meter.

Just how much these particular freeloaders have siphoned will take a little sleuthing by Foegen, who works for the Los Angeles Department of Water and Power. In the meantime, he carefully extracts the wire “shunts” for evidence, cuts the power, locks the meters and seals the utility panel to discourage more tampering.

Juice jackers. Meter beaters. Kilowatt crooks.

Call them what you will, but electricity thieves are helping themselves to billions of dollars in power every year--illicit activity that’s expected to grow as rates climb nationwide. The problem is particularly worrisome in California, where prices are skyrocketing and many residents hail from countries where filching electricity is a time-honored tradition. Using tools as crude as kitchen knives or as cutting edge as light sensors, energy grifters are rigging meters, tapping into underground power mains, piggybacking on their neighbors’ lines, even registering their pets as customers to game the billing system.

Utilities are fighting back with squads of theft investigators such as Foegen, who use everything from fiber-optic scopes and computer analysis to good old-fashioned shoe leather. They are battling to protect profits as well as public safety; sloppy voltage smugglers have been known to burn down homes and electrocute themselves.

Discouraging electricity cons isn’t easy. Even when caught, scofflaws are rarely prosecuted. With rates rising and anger at power companies growing, the industry is bracing for a long, hot summer.

“The higher the rates, the more the incentive,” said Randy Shipley, head of an Oregon firm that makes high-tech devices to snare energy bandits. “Utilities are getting more sophisticated. But so are the bad guys.”

People have been pinching electricity since the light bulb was invented. Theft is rampant in developing nations where creaky government utilities are no match for the resourceful. In India’s state of Delhi for example, nearly half of the available power is being pilfered, according to a recent study.

By comparison, the Edison Electric Institute today will report that U.S. utilities lost nearly $2 billion to swindlers last year, or less than 1% of industry revenue. But some energy consultants say the trade group’s estimates traditionally have been too low. They peg the losses at well beyond $5 billion a year.

The dirty little secret, they say, is that U.S. power companies for decades had scant incentive to pursue crooks. Electricity was cheap and companies routinely won rate hikes to cover their costs, burying theft in catch-all categories such as “line losses,” according to Lee Cordner, a former Pacific Gas & Electric manager and now an energy consultant in San Rafael, Calif.

“They just charge everyone else more” to make up for it, Cordner said.

Now that generation costs are soaring, regulators and consumer watchdogs are expected to take a harder look at such hidden expenses. Deregulation is likewise expected to give power companies incentive to crack down on theft to boost profitability.

U.S. utilities have formed theft-fighting associations to share detection tips and notify each other when shady characters leave one service territory for another. Most large utilities now have “revenue protection” departments whose sole mission is to ferret out cheats.

Utilities Step Up Investigations

PG&E;, Southern California Edison and San Diego Gas & Electric all declined to talk about their crime-fighting efforts--perhaps worried about giving customers ideas in the midst of huge rate hikes. But published reports indicate that PG&E;, for example, more than doubled its revenue protection staff in the mid-1990s, putting 48 investigators on the streets after power diversion soared to about $100 million a year.

DWP is looking to beef up its investigation staff, which totals six people for the utility’s 1.4 million meters. In 1998 the unit tracked down nearly 1,000 scofflaws, billing them more than $3.2 million for stolen power, up from $135,000 in 1988.

So who’s stealing electricity? You name it, said Cleve Freeman, a Southern California Gas Co. executive and chairman of the International Utilities Revenue Protection Assn. He says perpetrators typically can be classified as “the needy and the greedy.”

They include the working poor, the unemployed and retirees for whom electricity is becoming increasing unaffordable. Mobsters and marijuana farmers hijack electricity to avoid suspiciously large utility bills. But legitimate businesses and rich people do it too.

The DWP once nabbed an L.A. stockbroker who siphoned $9,000 worth of juice to heat his pool and cool his luxury home. The man pleaded ignorance and coughed up the money, according to Wayne Wohler, an assistant supervisor with DWP’s revenue security unit. But he said the high-quality job was obviously the work of a professional “fixer” whose handiwork turned up in other homes in the tony neighborhood.

Contractors and electricians are among the wiliest culprits because they possess the skills to pilfer power relatively safely, then cover their tracks. Unscrupulous builders cut their costs on construction sites by illegally diverting power from nearby transmission lines. Former Midwest utility employee Patrick Keener recalls an Iowa contractor who swiped enough juice to construct an entire subdivision before he was discovered.

“He built 36 homes off one meter,” said Keener, now the customer and energy services manager for the city of Redding in Northern California. “He got busted big time, but he was a darn good electrician.”

Power police say the most successful thieves don’t go for the home run, because nothing grabs their attention faster than a meter that reads zero. Wohler said he’s seen clever bandits rig their meters with light sensors and other devices to create on-off switches that allow them to run their meters part of the time to avoid suspicion.

Those who aren’t mechanically inclined can always try to game the billing system with false names. A utility manager who pleaded for anonymity said his company got burned by a customer with the moniker “U. Ben Hadd.” Others simply sign up their pets for service.

“How do you collect from Fido Smith?” wondered John Rilling, an energy theft consultant in Norcross, Ga.

Checking Out Tips Can Be Hazardous

Going head-to-head with meter beaters is a daily adventure for power cops such as Foegen of the DWP, who prowls Los Angeles armed with dog repellent and the addresses of suspected crooks. Most tips come from gimlet-eyed meter readers trained to spot a broken meter lock or suspicious wiring. Others come from computer analysis of changes in customers’ usage patterns. But feuding family members and nosy neighbors are valuable informants as well. Like most utilities, DWP has a hotline people can use to rat on suspected cheats.

“We get the best stuff from ex-spouses,” said Foegen, cruising past liquor stores and brightly painted taco stands on Washington Boulevard in a white, electric-powered SUV.

His territory spans some of the poorest sections of the city, including Pico-Union and South-Central Los Angeles. Most power thefts here are hack jobs--cutlery jammed into meter dials, jumper cables hooked to overhead lines, multiple dwellings wired to a single connection--which are easy to spot but potentially lethal for power cops and hackers alike.

Foegen said he has defused jury-rigged connections so dangerous “I could feel the hair standing up on the back of my neck.” DWP’s Wohler recalls at least three electrocutions and “countless injuries” to juice jackers and their neighbors over his 25-year career. Earlier this year, shoddy wiring from an illegal hookup sparked an early-morning row house fire in South Philadelphia that killed a woman and destroyed three homes.

Electrocution and fires aren’t the only perils. Suspected thieves jumped Foegen in a back alley in February, breaking his nose after he dismantled their illegal connection. The 52-year-old was back on the job within a few weeks undeterred. His one regret?

“They stole my tools,” he groused.

While there’s no substitute for a sharp eye and insulated pliers, utilities increasingly are employing high-tech equipment to keep up with criminals.

Shipley’s Portland, Ore.-based H.J. Arnett Industries manufactures the White Knight, a $3,600 “tap detector” that sends an impulse through electric wires to pinpoint power diversions. Then there’s the auditing “check meter,” which records discrepancies between actual power usage and what’s showing up on a customer’s meter. Utilities place the $1,500 device on nearby utility poles and disguise them to look like a transformers or telephone equipment. But alert crooks are getting wise to the decoys.

“We’ve had a few returned to us with bullet holes,” Shipley said.

Massachusetts-based Optim Inc. is applying the same fiber-optic technology used in medical proctoscopes to probe electrical conduit for irregularities. Power cops are eavesdropping on Internet chat rooms looking for juice-jacking braggarts. Meanwhile, investigators at the nonprofit Electric Power Research Institute in Palo Alto are devising computer defenses to block hackers from tapping into utilities’ computers to lower their bills.

Utilities also are installing automated “smart” meters that can be read remotely and can alert them when someone has tampered with the device. Given the high price of the technology, which can cost up to three times more than conventional meters, automated equipment is being phased in slowly. Thus for the foreseeable future, utilities are stuck in the unenviable position of letting the foxes guard the chicken coop.

“It’s the only industry I know where the cash register . . . is on the customer’s property,” said Howard Dean, a former PG&E; revenue protection specialist who’s now an energy theft consultant in Hawaii.

Some Say Energy Theft Is Rarely Punished

He and others complain that energy theft is punished too rarely and too lightly to deter wrongdoers. It’s a felony in California, punishable by jail time and heavy fines. In reality, power companies usually settle for restitution, utility officials admit.

Still, they occasionally pursue small-time, serial offenders just to send a message. Take the Rev. Ray Ector Sr., for example. The Baptist minister pleaded no contest last year to five misdemeanor counts of stealing water and electricity from the DWP, agreeing to perform 300 hours of community service and pay about $2,500 in restitution.

Ector now says he’s too broke to pay and he remains unrepentant. A gregarious 71-year-old who sports an “I Love Jesus” baseball cap, he says he was forced to filch utilities to provide for the recovering drug addicts who reside in his homeless shelter.

“The Lord helps those who help themselves,” said Ector, pastor of Little Fellowship Missionary Baptist Church.

But Foegen said that spiritual dictum doesn’t include helping oneself to free power. He said Ector’s “homeless shelter” is really just rental property and that some wacky wiring has been spotted at his church as well.

Preacher or no preacher, “I’m keeping an eye on him,” Foegen said.

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