EDITORIAL:

Revenue Protection and Deregulation, Part #2


An Editorial by Woody Woodward (8/15/98)

After reviewing comments by PUC Regulators and Company Representatives, there seems to be a prevailing idea that after deregulation there won’t be a need for revenue protection, as there won’t be any theft. Each time I hear this remark, I look at the individual who made it, shake my head in amazement, and tell him unequivocally that there will be more theft and fraud. With numerous providers, each concerned about their own accounts, there will be added confusion. There will always be theft, but the confusion will make it easier to get away with. Theft may even increase as &credit risk& customers become frustrated over trying to find a provider who will provide them with service. If an individual connects their own power on a new home, without even contacting a provider, who will find him? Who will correct the situation? In addition, if there is no Revenue Protection program, there is no deterrent. Professional fixers will flock in. Organized crime will likely increase their involvement.

When I bring this up, the common response is, &then who should do it?& (Revenue Protection). My response is: &determine who is being stolen from, as they are the ones with the most to lose&. We cannot allow our regulators to take a step back and rule that providers can ignore theft and just increase prices to make up for it. What about the safety issues raised by energy theft? Who will be the target of lawsuits for property damage, personal injury, and death? Who will protect the customer (and their family) from these situations?

In my state, even though Electric Utilities will be &deregulated& January 1, 2000, we still do not know exactly how they will be structured. It currently appears that everything other than distribution will be deemed &competitive&. In addition, it appears that the distribution company will not be allowed to do any metering, and may not even be able to provide metering services as an affiliate. It has not even been determined who will be the &default& provider (provider of last resort). If this takes effect on January First, who will be serving the customers who have not chosen a new provider? Who will be doing their metering? It has been shown in California that the residential customers are not being competitively sought out. Do we just give energy away? Do we flat rate?

It has been suggested that Revenue Protection be competitive. I have philosophical and ethical problems with this. If a Revenue Protection Company is reimbursed based on recoveries, who will protect the customer from fraud? What is to keep the Revenue Protection Company from creating theft or metering problems that they can later discover and profit from?

If Revenue Protection is not done by the &regulated& distribution company, then I believe it should be taken over by the PUC. As much as I hate &Big Government&, and the resulting waste and red tape, I believe this would provide a somewhat neutral party to handle Revenue Protection issues. There would be few concerns about confidential customer information. The customer and provider would deal directly with the PUC. In my state, the PUC already has some police powers, including uniformed officers who police taxi and bus services. Why not have Revenue Protection Investigators? That could facilitate the prosecution of thieves, or at least improve cooperation with the local police agencies. I know the agencies I have fought with for years to get cooperation from, would not cooperate with numerous private Revenue Protection Companies…..


Woody Woodward is the Team Leader of the Meter Validity Department of Nevada Power Company in Las Vegas, Nevada. He is currently Director Emeritus of the Western States Energy Theft Association (President, '96/'97) and Internet Web Master of the International Utilities Revenue Protection Association.



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