With a potential energy theft amnesty from Ofgem currently on the horizon, Lloyd Birkhead, group managing director at Grosvenor Services Group, part of Echo Managed Services, questions whether it’s really the lightbulb moment they think it is.
A new initiative is being considered by Ofgem, in which UK consumers can own up – risk free – to breaking the law by stealing energy through a tampered meter.
Energy theft is a serious crime, but one that often goes under the radar. Last year alone, the practice injured or killed at least one person every 10 days through electric shocks, burns or even street-wide gas explosions. And it’s not only a danger to the community; meter tampering also costs the UK economy almost £500 million annually and adds around £20 to every household’s bill.
However, last year, despite 150,000 cases being investigated, only around 1,500 people were charged.
During the proposed ‘Energy Theft Amnesty’, which would take place during a fixed and limited period of time, energy thieves would neither be prosecuted, fined nor back-billed for committing the crime. Their meter would be made safe by an engineer and they would simply “get away with it.” The sentence would normally be up to five years in prison.
A public split
It’s a polarising issue. That much was evident when we surveyed 1,000 UK billpayers on their attitudes towards the proposed amnesty. When provided basic information regarding energy theft and asked their opinion on the matter, an average of 58% of people stated they would be in favour of the process. Following this, respondents were made aware of some of the benefits and drawbacks of an amnesty. When asked their opinion again, the total number of those in favour dropped to 52%.
We also questioned respondents on whether they would be in favour of a knife amnesty, such as that carried out by the government in March 2019. More than eight in 10 (85%) people said that they were in favour of this action.
All of this suggests that UK residents are not just uninformed about the potentially life-threatening consequences and financial implications of energy theft, but that many still do not perceive them as high-risk.
Even when survey respondents were informed of the dangers, there was still not an overwhelming majority in favour of an amnesty – despite the very real threat that the practice presents.
Our findings also suggested that the public is in favour of action generally, but only when it has a tangible, full and direct appreciation of the dangers at stake. The risk posed by dangerous weapons and violent crime is – rightfully – well-reported and well-understood, which helps to explain why 85% of people would approve of a knife amnesty. The dangers of energy theft, meanwhile, are not universally understood.
Let’s look in more depth at the key issues surrounding an energy theft amnesty and the implications for UK energy companies if it were to go ahead.
Safety – the most important outcome?
As with a knife amnesty, the driving force behind such a large-scale initiative is to make communities safer. Fewer tampered meters equates to a smaller chance of potentially fatal injuries taking place in UK homes.
Those who are most likely to come forward will be those who are not hardened criminals. It may be that they simply didn’t understand safety implications, or could have been going through temporary financial hardship and saw meter tampering as a quick fix.
Furthermore, given that consumer awareness around energy theft is generally low (our previous study showed that 39% of people are ignorant of the safety risks) a UK-wide amnesty would provide the issue with much-needed profile boost. Marketing campaigns – delivered through bill-based messaging, TV or social media, for example, would create impact in the public consciousness. In turn, this would raise awareness of the dangers and create a ripple effect whereby tampers are more likely to be spotted and solved.
Taking the above into account, then, surely we should prioritise action to make properties safe above all else?
In reality, it’s not so clear cut. Firstly, despite good intentions, where energy theft amnesties have taken place elsewhere – for example, in Northern Ireland – uptake has been relatively low, with only a handful of people coming forward. There is therefore a danger that efforts from suppliers and Ofgem would ultimately count for nothing.
It’s also important to recognise the resourcing and financial burden that such a proposal could place on energy companies – many of which will already be stretched to their limit in aiming to meet the government’s current smart meter installation targets. If consumers came forward in their thousands, would the sector be able to cope with servicing what would be many urgent priority cases within a few days? What’s more, with backdated energy charges written off, suppliers could also stand to lose millions – a destabilising amount, especially for newer entrants to the market.
There is also the question of fairness and the simple notion of “right and wrong.” A backlash from law-abiding citizens who have paid for their energy seems highly likely; as does the potential for an amnesty driving longer term criminal activity. By publicising that there are no repercussions for those who have committed a crime, could the industry inadvertently encourage others to tamper with their meters in future, without fear of prosecution? This would ultimately devalue what energy suppliers are trying to achieve in the long term.
Clearly, there is a plethora of benefits and disadvantages when it comes to the potential implementation of an energy theft amnesty. The regulator will undoubtedly be weighing up the benefits and drawbacks of this decision in the coming months – so it will be interesting to see whether the process is driven forward.
It’s something that the UK Revenue Protection Association (UKRPA) will also be focusing on, stating that it “plans to work closely with its members and Ofgem to thoroughly consider the pros and cons of any proposed initiative in this area. The ongoing focus on customer safety remains of paramount importance.”
Above all, the sector must work harder to educate communities on the potentially-fatal risks that meter tampering can present if an energy theft amnesty is to garner public support and be successful in future.