FruityBud
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Electricity theft and "illegitimate" power purchases by indoor marijuana growers is costing BC Hydro customers $154 million per year, according to a new study.
That's roughly the equivalent of a five-per-cent surcharge on electricity bills for its 2.2 million customers.
The study, co-authored by University of the Fraser Valley researchers Darryl Plecas and Jordan Diplock, says marijuana-growing operations expanded in number and power consumption during the past decade, and estimates that 52 per cent of them are stealing electricity.
That's twice the proportion of power thefts from growing operations estimated by Plecas and others six years ago after reviewing information collected between 1997 and 2003.
The study was produced by the university without financial assistance from Hydro.
Diplock and Plecas say that although the other 48 per cent of growers pay their BC Hydro bills, they are effectively diverting power that would otherwise go to legitimate purposes, such as deferring investment in new generating projects, or exporting electricity to the United States at a profit.
The study authors calculate that theft annually costs Hydro $109 million, and notes the company's estimate that power consumption by bill-paying growing operations is $28.1 million.
That adds up to $137 million. However, the final number is bumped to $154 million based on the highest marginal cost Hydro pays to add new power generation facilities to its grid.
"Although electricity providers do not lose revenue from 'paid' growing operations, legitimate electricity consumers are still affected," the study says.
Hydro believes that a conversion of its home metering system to digital "smart" meters will make it easy to detect electricity theft.
Stopping theft is the biggest financial rationale for the $930-million smart meter conversion project. Hydro calculates that theft detection will allow it to protect $732 million of revenue, including inflation, over 20 years.
Last year, Plecas and Diplock suggested in a research article published in the Journal of Criminal Justice Research that there were at least 10,000 commercially viable growing operation in B.C., and that 20 per cent were stealing power.
Now they're saying they believe there are 13,206 active locations and 6,867 are stealing power.
"This is not surprising given the increasing size of growing operations and the risk of detection that accompanies the increased energy consumption," the study says.
In an interview, Plecas said the increase is partly attributable to the "conservative" nature of previous theft estimates by himself and his research partners.
"We predicted this when we first looked at this whole business of grow ops, the nature and extent of them, back in 2000," Plecas said.
"The size of grows has increased dramatically and one of the things we know is that the larger the grow op the more apt people are to be stealing hydro[electricity].
"It's like any other enterprise, I guess, the grow-op industry has become increasingly sophisticated: fewer players, and the big guns are taking over the business. Most of them have markings of one organized gang or another."
Jim Quail of the B.C. Public Interest Advocacy Centre, a group that has questioned the consumer benefits of the $930-million smart meter investment, said the new numbers "just don't make any sense."
He said the study seems to suggest that B.C. has a relatively bigger problem than Northern California: 11 per cent of residential electricity consumption in B.C. derived from growing operations compared with eight per cent in California.
"If B.C.'s incidence of marijuana growing is approaching California I would say that's phenomenal. But to have it almost 50-per-cent more sort of defies reason," Quail said.
He said Hydro and the provincial government in particular are looking for rationales -such as an assertion that power theft costs Hydro $100 million a year -to bolster the business case for smart meters.
Quail says they are "working backwards to try to find a number that justifies the investment in smart meters because they have given up arguing that they conserve electricity."
According to Gary Murphy, chief project officer for BC Hydro's smart meter program, the report is one of "several sources of data" referenced by Hydro in calculating the cost of theft.
He said one of the Crown corporation's best indications of the scope of theft has been the drop in demand for power relative to the number of growing operations that have been shut down.
"Over the last five years we've identified and shut down over 2,600 thefts. So we have built up a pretty robust source of data," Murphy said.
One component of that data is the amount of money that has been recovered from power thieves through litigation.
Another is the drop in the cost of importing power to cover demand from B.C. consumers, compared with the number of power thieves apprehended, Murphy said.
"The larger component of the $100 million is frankly the energy purchases we don't have to make as a result of shutting these folks down."
hxxp://tinyurl.com/5tjmbbw
That's roughly the equivalent of a five-per-cent surcharge on electricity bills for its 2.2 million customers.
The study, co-authored by University of the Fraser Valley researchers Darryl Plecas and Jordan Diplock, says marijuana-growing operations expanded in number and power consumption during the past decade, and estimates that 52 per cent of them are stealing electricity.
That's twice the proportion of power thefts from growing operations estimated by Plecas and others six years ago after reviewing information collected between 1997 and 2003.
The study was produced by the university without financial assistance from Hydro.
Diplock and Plecas say that although the other 48 per cent of growers pay their BC Hydro bills, they are effectively diverting power that would otherwise go to legitimate purposes, such as deferring investment in new generating projects, or exporting electricity to the United States at a profit.
The study authors calculate that theft annually costs Hydro $109 million, and notes the company's estimate that power consumption by bill-paying growing operations is $28.1 million.
That adds up to $137 million. However, the final number is bumped to $154 million based on the highest marginal cost Hydro pays to add new power generation facilities to its grid.
"Although electricity providers do not lose revenue from 'paid' growing operations, legitimate electricity consumers are still affected," the study says.
Hydro believes that a conversion of its home metering system to digital "smart" meters will make it easy to detect electricity theft.
Stopping theft is the biggest financial rationale for the $930-million smart meter conversion project. Hydro calculates that theft detection will allow it to protect $732 million of revenue, including inflation, over 20 years.
Last year, Plecas and Diplock suggested in a research article published in the Journal of Criminal Justice Research that there were at least 10,000 commercially viable growing operation in B.C., and that 20 per cent were stealing power.
Now they're saying they believe there are 13,206 active locations and 6,867 are stealing power.
"This is not surprising given the increasing size of growing operations and the risk of detection that accompanies the increased energy consumption," the study says.
In an interview, Plecas said the increase is partly attributable to the "conservative" nature of previous theft estimates by himself and his research partners.
"We predicted this when we first looked at this whole business of grow ops, the nature and extent of them, back in 2000," Plecas said.
"The size of grows has increased dramatically and one of the things we know is that the larger the grow op the more apt people are to be stealing hydro[electricity].
"It's like any other enterprise, I guess, the grow-op industry has become increasingly sophisticated: fewer players, and the big guns are taking over the business. Most of them have markings of one organized gang or another."
Jim Quail of the B.C. Public Interest Advocacy Centre, a group that has questioned the consumer benefits of the $930-million smart meter investment, said the new numbers "just don't make any sense."
He said the study seems to suggest that B.C. has a relatively bigger problem than Northern California: 11 per cent of residential electricity consumption in B.C. derived from growing operations compared with eight per cent in California.
"If B.C.'s incidence of marijuana growing is approaching California I would say that's phenomenal. But to have it almost 50-per-cent more sort of defies reason," Quail said.
He said Hydro and the provincial government in particular are looking for rationales -such as an assertion that power theft costs Hydro $100 million a year -to bolster the business case for smart meters.
Quail says they are "working backwards to try to find a number that justifies the investment in smart meters because they have given up arguing that they conserve electricity."
According to Gary Murphy, chief project officer for BC Hydro's smart meter program, the report is one of "several sources of data" referenced by Hydro in calculating the cost of theft.
He said one of the Crown corporation's best indications of the scope of theft has been the drop in demand for power relative to the number of growing operations that have been shut down.
"Over the last five years we've identified and shut down over 2,600 thefts. So we have built up a pretty robust source of data," Murphy said.
One component of that data is the amount of money that has been recovered from power thieves through litigation.
Another is the drop in the cost of importing power to cover demand from B.C. consumers, compared with the number of power thieves apprehended, Murphy said.
"The larger component of the $100 million is frankly the energy purchases we don't have to make as a result of shutting these folks down."
hxxp://tinyurl.com/5tjmbbw
