EDITORIAL:

LOCK OFF THE METER:
BACK TO THE BASICS


An Editorial by George W. Davis

My home is equipped with an electronic burglar alarm system, which is wired directly to the local police station. My Lincoln Town Car also has a theft alarm system. Now that these state-of-the-art alarm systems are installed, should I remove the locks from the doors and windows? No!! Why not?? Simply put, we are not satisfied with only DETECTING theft, we also want to PREVENT theft.

There is an analogy with burglar alarms that applies to electricity meters. As power companies deliberate on the installation of AMR meters, there is usually a struggle to cost justify the purchase of this new technology. Cost justifying AMR is not easy, yet most utilities feel compelled to move ahead in this area; AMR is the future. But, to cost justify the purchase of AMR all too often means that auxiliary products and services are eliminated or cut to the bone. Since AMR meter options include theft alarms such as tilt indicators and voltage interruption alarms, some utilities opt to eliminate the purchase of meter locking devices. The analogy is, "Our meters are equipped with state-of-the-art, electronic theft alarm systems. We will discontinue the purchase of locks for the meters" -- otherwise stated, "We will remove the locks from the doors and windows." Seems ludicrous, but that is exactly what some utilities are proposing to do.

The meter reader has, for years, been the first line of defense against meter tampering, and meter readers have also reported many hazardous meter safety violations. The meter reader has visited the meter monthly, inspected, and verified the general integrity of the meter installation. With the implementation of AMR meters, there will be no more routine monthly inspections of the meter by the meter reader. The meter -- the cash register -- will be left unattended for long periods of time. Is this not an open invitation to theft?

For some years, I traveled the Parkway on my way to work, and along the way, I paid a toll. I paid the toll either to a toll collector, or in an exact change lane. But, I paid, as I later learned, because I knew someone was watching. When the toll collectors went on strike for a week or so, commuters were asked to make a voluntary deposit at the toll booth. By the second day, I determined that there was no need to pay that toll -- because no one was watching. For the balance of the strike, I and many others did not make a deposit at the toll booth. I've often reflected on this rather simplistic trait of human nature. I believe there is an analogy with AMR meters. If no meter reader is watching the meter, there will be a temptation -- in fact, an invitation -- to tamper with the meter and avoid paying the toll. Clearly, if there are to be no monthly inspections of the meter, if no one is watching, it is now more important than ever, if not mandatory, to lock the meter in order to prevent tampering.

What about the theft alarms -- tilt indicators and voltage interruption alarms -- that are options on AMR meters? If someone tampers with the meter, an alarm is sent to the headquarters of the power company, and this causes a trained meter technician to go into the field and investigate the alarm; the theft is identified and the perpetrator is arrested and hauled off to court. On the surface, this seems plausible, but in practice, it simply does not work that way. There are simply too many alarms for each and every one to be investigated. There are simply not enough trained meter technicians on staff to investigate all of the alarms; therefore, the practice is to ignore a large percentage of the alarms. Furthermore, there are reportedly cases of meter tampering for which no alarms were received. Finally, investigating each alarm is not cost effective for residential metering. Tampering alarms on AMR meters can be an effective tool in a revenue protection program, but reliance exclusively upon tampering alarms simply does not work. DETECTION is not sufficient. Locking devices are still necessary to PREVENT theft of energy at the meter.

According to John Vitali, Manager of Revenue Protection at Southern California Edison Co., and also President of the International Utilities Revenue Protection Association, "No matter what kind of technology the meter has internally, there are sound reasons for locking down the meter."

The economy in the United States is strong, it is very strong, it is the strongest economy that we have witnessed during our lifetime. In spite of this strong economy, utilities are writing off record amounts of bad debt. At many utilities, both gas and electric, delinquent accounts have increased by more than 30% in two years. Further- more, bankruptcies are at a record level and increasing rapidly. It is easy to borrow money. Credit card debt is engulfing the American consumer. The reality is, many consumers find themselves unable to pay their utility bills. Inner-Tite Corp. conducted a survey of more than 50 power companies in the United States to determine how meters are disconnected for non-payment of a bill. It was determined that 50% of the large power companies pulled the meter, booted it, and reinstalled the meter with a seal. The remaining 50% of the large power companies booted the meter and installed a heavy-duty locking device. It was further determined that 25% to 28% of the meters sealed off (no locking device) were reconnected by the customer. The survey indicated that only about 2% of the meters locked off with a heavy-duty locking device were reconnected by the customer. Otherwise stated, the survey indicated that one out of four customers reconnected himself when sealed off; whereas, only one out of fifty customers reconnected himself when locked off with a heavy-duty locking device. Locking devices are a proven means of managing delinquent accounts.

According to Leo P. Dalbec, Administrator-Revenue Protection at New England Electric System, "Locking devices on meters do not suggest suspicion or wrong doing. Rather, these establish limits and boundaries, as do fences between good neighbors. Furthermore, deregulation has fostered competition, which has introduced new entities having an interest in the meter and its data. Locking devices help define the limits of the interests of those entities."

With the large and politically sensitive issues of deregulation facing utility executives, it is not surprising that some matters, which were important in the past, are not receiving the same attention at the present. However, revenues must continue to be brought in promptly, and the importance of revenue protection should not be overlooked. We should be mindful that according to an EEI survey, theft is estimated to account for a loss of 1 to 3% of revenues. Fraud has been estimated to account for 1-1/2% to 2% of revenues. Add to that wiring and metering errors, which are estimated to be another 1% to 2% loss in revenues. Write-off for bad debt is reported by the EEI to average 3/10 to 5/10 of 1% of revenues, but realistically, is probably much closer to 1-1/2% or more of revenues at many urban utility companies. This totals 4% to 8-1/2% of revenues potentially lost at the meter. It makes good sense to return to the basics, and to monitor the financial affairs of the utility company, starting with the meter. Having established the potential risk of loss in revenues at the meter, it is prudent to lock the meter to prevent theft of service, to prevent theft of metering equipment, to improve the efficiency of disconnects for non-payment, to promote safety and to prevent entry to the meter by unauthorized persons.

George W. Davis, President, Inner-Tite Corp., Holden, MA



Top of Page


Return to Editorial Page


Return to IURPA Page