Ofgem consults on measures to tackle gas theft


London, U.K. — (METERING.COM) — September 6, 2011 – Britain’s energy regulator Ofgem has launched a consultation on proposed industry measures to tackle gas theft more effectively.

The options, which have been developed by the industry, are:

  • Supplier Energy Theft Scheme (SETS), which was proposed by British Gas and would involve placing financial incentives on suppliers to detect and report gas theft
  • Enhanced SETS, also proposed by British Gas, which in addition to the SETS would set up a body to better coordinate industry response to gas theft, for example by providing management data to suppliers on gas theft and the setting up of a national gas theft hotline
  • National Revenue Protection Scheme (NRPS), which was proposed by the Gas Forum and would involve setting up a central database to better target possible gas theft and would also include a theft hotline. Suppliers would then have to investigate suspected cases of theft when asked to.

Ofgem says its analysis suggests that each of the three proposals would help reduce the incidence of gas theft. Based on an assumed increase in theft detection from 2,900 to 6,000 cases and estimates of the costs of each proposal, the costs of operating the NRPS proposal for a single year would achieve break even 17 months after the beginning of that year, while SETS and the enhanced SETS would do so after 24 months. If customers continued to pay charges past the break-even point then this would deliver additional benefits of £341,000 per month. These benefits could reduce future customer bills.

The proposals are now open for consultation with a view to a decision being made later this year to come into place in early 2012.

According to Ofgem in addition to putting lives at risk, gas theft is currently estimated at £64 million to £220 million a year (equivalent to £2.70-£9.80 per customer per year).