Electric utilities and scrap metal dealers make up a sizeable percentage of membership in the Investment Recovery Association. The theft of copper wire represents a significant expense for utilities and reputable scrap dealers are  participating in efforts to reduce this problem. 
The U.S. Department of Energy’s Office of Electricity Delivery and Energy Reliability (OE) monitors changes, threats,  and risks to the energy infrastructure in the United States. As part of that responsibility, OE published research in 2007 on the theft of copper wire from electric utilities. Early in 2010 there was evidence of an increase in such thefts. Because of this increase, OE decided to update its 2007 assessment of copper wire thefts. A synopsis of that study is presented here.
Copper wire thefts continues today throughout the United States, but the magnitude of theft has been reduced considerably. The problem is not likely to cease as long as copper prices remain sufficiently attractive to would-be thieves. However, the combined efforts of electric utilities, lawmakers, scrap metal dealers, and local law enforcement have succeeded in reducing the problem and driving a wedge between copper price increases and comparable increases in copper theft. 
Electric utilities have launched public awareness campaigns, offered rewards for information leading to the arrest and conviction of thieves, marked copper wire for easier recovery from scrap metal dealers, and collaborated with stakeholders. Legislation to reduce copper theft has been introduced in every State and passed into law in all but five States as of August 2010. n Scrap metal dealers are cooperating with utilities and lawmakers, reporting suspected thefts, and disseminating information through Institute of Scrap Recycling Industries’ (ISRI’s) Theft Alerts. 
Local law enforcement has become more responsive to electric utilities facing copper theft and is collaborating to recover more stolen copper and arrest those responsible. Electric Utilities and Copper Demand Copper is attractive to the electric utility industry because it is an excellent conductor of electricity, it resists corrosion, and in spite of recent price increases, it is inexpensive relative to alternate metals over time. Because of its properties of high ductility, malleability, and electrical conductivity, it has become the benchmark for almost all types of wiring. OE analysis of press data suggests utility poles are the primary target of copper wire theft. Substations also appear to be an important target of copper wire theft, as do storage facilities and construction sites. Utilities have become targets of copper theft because tons of copper are used in each electric utility substation, mostly in transformers. Utilities also maintain large concentrations of copper wire at utility construction sites and storage yards, in the back of utility trucks, and in transmission and distribution lines.
Copper Prices and Copper Wire Theft 
The price of copper has been the major factor directly influencing general copper thefts and copper wire thefts from electric utilities. In 2004 and 2005, reports of copper thefts began to rise dramatically as copper prices increased. When spot copper prices rose above $3.00/lb. in 2006, the magnitude of thefts began to grow exponentially. As copper prices cycled up and down during 2006, 2007, and 2008, copper thefts moved in similar directions. When the price of copper began to decrease in the summer of 2008 and continued falling throughout the year due to the recession, the number of reported copper thefts began to drop. In the spring of 2009, the price of copper began to rebound but the price was still too low to encourage a resurgence of copper thefts. It was not until the price began to average over $3.50/lb. that reports of thefts began to climb again. Thefts in the first eight months of 2010 were about equal to the total number of thefts for 2009. If this rate continues through 2010, total copper theft reports are projected to be about 50 percent higher than in 2009. 
Costs to Utilities from Copper Wire Thefts 
A thief typically steals an amount of copper valued at several hundred dollars, which then results in the utility normally spending just over one thousand dollars to make the repairs caused by the theft. Although most individual repair costs are low, they can add up significantly. Data for 618 respondent utilities indicated that there were 18,400 individual copper theft incidents, with overall repair costs of $22 million. For example: A spokesman for AEP’s Appalachian Power, which services large portions of West Virginia, reported in September 2010 that the utility spends about $1 million annually to replace stolen copper wire.
Michigan utility DTE Energy reported that its thefts had cost the utility $10 million in 2007, and referred to the issue in 2008 as “the most significant threat we have.” Pacific Gas & Electric said in 2007 that thefts had cost it more than $3.2 million in damages, or about $1 million per year. Sierra Pacific Power Company reported in April 2007 costs of $1.5 million to repair and replace stolen copper wire from its Truckee-to-Verdi power line in California and Nevada. Entergy Louisiana reported that it suffered $1 million in material thefts in 2006 alone, and that copper theft escalated after hurricanes Katrina and Rita.
Security and Safety Issues
The OE study has not uncovered any evidence that copper wire theft at electric utilities has ever been initiated specifically to render an asset (typically a substation) inoperable, or to target or impact the bulk electric system. Nor has OE found any information indicating that copper thieves might be members of terrorist groups or working as foreign agents. To date, copper wire theft has not posed a national security threat to the United States. It appears that the motives behind copper wire thefts are merely economic. 
Copper wire thefts can endanger the safety of the utility employees who may touch ungrounded wires and equipment. However, OE analysis found no reported cases of workers being injured or killed as a result of damage caused by copper wire thefts. It is possible that holes cut in fences and grounding wires stolen could increase the risk that a person may wander into a substation and be injured. However, there have been no reported cases of such injury. In fact, copper wire theft poses the greatest risk for the thieves who endanger their lives by cutting wires from energized equipment! Utilities reported 13 such fatalities in 2008.

Industry-wide Effort to Combat Theft
Utilities, legislators, scrap dealers and law enforcement have all taken measures that appear to have mitigated the increase in copper thefts. The OE report details these efforts which have included everything from public awareness campaigns to the launch of a website by the ISRI trade association that allows more than 1,700 law enforcement members to notify the scrap metal industry of material thefts in the U.S. and Canada. Once reviewed and validated, the thefts are broadcast to all subscribed users within a 100 mile radius of the theft. 
The combined efforts of electric utilities, lawmakers, scrap metal dealers, and local law enforcement have succeeded in reducing the problem and driving a wedge between copper price increases and comparable increases in copper theft. 
Source: U.S. Department of Energy, Office of Electricity Delivery and Energy Reliability, Infrastructure Security and Energy Restoration, An Updated Assessment of Copper Wire Thefts from Electric Utilities, October 2010 
Reprinted from ASSET 2.0, the Investment Recovery Business Journal, Vol. 6, 2010

© The Investment Recovery Association



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