Marijuana Grow Ops: B.C. Hydro on electricity theft

Doble Engineering’s 80^th InternationalUser’s Conference in Boston, in which 1300 utility executives from 35 countries gathered to trade experiences, attend workshops, and see the newest utility testing gear from Doble (A subsidiary of ESCO Technologies).  This was a good opportunity  to talk to various utility execs and find out what was on their minds.

One of the keynote speakers was B.C Hydro’s Patrick Hogan, Vice President of Transmission and Distribution Engineering and Design.  His job, simply put, is to make sure electricity gets from the generation stations to the homes, stores, and factories that use it.

At one point in his presentation, Hogan alluded to the value of smart utility meters in preventing theft, so of course, I had to follow up on this.  I had read that electricity theft in a country like India might result in a loss of up to a third of the power generated, but I figured it would be no more than a couple percent in any utility jurisdiction in North America.

“Legitimate customers bear the cost of electricity theft, which has grown significantly from approximately 500 GWh (gigawatt-hours) in 2006 to an estimate of at least 850 GWh today—that’s enough power to supply 77,000 homes for a year and amounts to approximately $100 million a year in energy cost.

Theft detection—New distribution system meters (different from those to be installed at customer homes or businesses) located at key points on BC Hydro’s system will measure electricity supplied to specific areas Combined with software tools to enable electricity balancing analysis, distribution system meters will help BC Hydro identify electricity theft more accurately and address it more quickly.

Tamper detection— Smart meters have a tamper detection feature that automatically notifies BC Hydro if they have been removed from the wall or otherwise manipulated.  Electricity theft results in higher rates for legitimate customers.”

According to Hogan “We don’t know where it all goes, but we do know the majority goes to growing marijuana.”  And the thieves are not amateurs.  “They tap into 12 kV or 25 kV lines.  These people have utility lineman experience.”  They also have a great deal of ingenuity.  “We’ve seen where they hollowed out the utility poles, tapped into the power line, and then ran underground to their operation.  They even put in their own transformers.  Smart meters can help put a stop to that because we have a better sense of where the power is going and when it is used.”

A quick trip to B.C. Hydro’s website on electricity theft further highlights the issue of what they call “Grow Ops:  Problems associated with marijuana grow-ops include:

• Electricity theft: Most electricity theft in British Columbia is related to marijuana grow operators who seek to avoid detection from law enforcement or electrical and fire safety officials.
• Safety issues: Marijuana grow-ops create safety risks for BC Hydro employees, first responders and the public.
• Damage to the grid: Power surges and electrical system failure due to high loads can cause power outages and damage to BC Hydro equipment and infrastructure, including the premature failure of distribution transformers.
• Electricity waste: Illegitimate consumption of electricity by marijuana grow-ops is a waste of electricity and an affront to the conservation efforts of legitimate customers.

In response to the issue, BC Hydro has set up an anonymous tip line, and the promise that if a tip leads to arrest and trial, the informant doesn’t have to appear in court.  The utility also has its own team of ex-law enforcement officials who pursue thieves.  Within three years, they had shut down over 1500 ‘electrical diversions’ associated with grow ops and recovered $5 million in lost revenue.  The utility also responds to over 5000 police requests a year for utility usage information – that information often shows unusually high electricity consumption and usage patterns that indicate the use of energy-intensive grow lights and fans.

In British Columbia, much of this cultivation is moving to rural areas, but in other areas of Canada, it’s very much an urban phenomenon.  An estimated $500 million of electricity is stolen in Ontario, in more urban areas.  Across the country, there may be as many as 100,000 indoor grow-ops. 

But if you think the problem of electricity theft is limited to Canada, think again.  Estimates are hard to come by, but it is believed that up to $6 billion of electricity is pirated in the U.S., which would put electricity high on the list, as the third most stolen item, after credit card data and automobiles.

It’s not all stolen for pot growing: In Houston in 2010, with the heatwave, power theft was epidemic.  Law enforcement in that city was quoted as saying: “We can go to almost any apartment complex in the city and after looking at two or three buildings, we can find probably at least 60 to 70 percent of the meters have been tampered with.”  In Houston alone, an estimated 10,000 customers were stealing power.  Total costs to Houston ratepayers were estimated at $14 million.

To find out more about the situation in Texas, I interviewed Susan Neel, Senior Director of Electricity Market Operations at CenterPoint Energy, a utility with 5 million metered electric and gas customers headquartered in Houston.  Ms. Neel estimated the problem there to be about 1% of total electric load and about 2% of the electricity provided to the residential and small commercial sector where theft is more prevalent.  “You never know exactly how big the problem is since our product is not in inventory.  We’ve had some instances where the load was so big that it melted the transformers, which poses a huge safety risk to both thieves and the general public.”

Like BC Hydro, CenterPoint has a special unit to focus on revenue protection, and smart meters are the first line of defense “smart meters give us real-time alerts when somebody is trying to tamper with the meter.  We know it immediately, whereas, in the old days, we might not know for months. That helps protect us from lost revenue.”

CenterPoint’s revenue protection unit is also charged with going to the scenes where theft has taken place and gathering evidence for potential prosecution.  Neel notes that this job can be risky, since “a good portion of this stolen electricity is believed to support marijuana “grow-ops.  The grow-op people tend to be more creative in stealing power.  Since our main job is to protect our employees, if we do go out to ascertain a potential grow-op situation, we have law enforcement accompany us.”

To combat this problem, CenterPoint also works with other Texas utilities that meet once a year to share best practices in revenue protection.  They also share information with a larger group of Southwestern utilities.

Electricity theft is a significant economic issue that is by no means limited to CenterPoint in Houston, or British Columbia’s B.C. Hydro.  It is pervasive throughout North America, and across the planet, for that matter.  Some progress is being made in fighting this scourge, but utilities concede that it continues to be a significant concern.  And while smart meters can help, there have been some reports of hacking into the smart meters themselves.  By all accounts, the problem of electricity theft in North America is not going away anytime soon.

Image: Planetforward