Power Theft Management

Electricity theft is a significant economic issue and is a primary facet of the non-technical commercial losses. Power theft hits India’s gross domestic production (GDP) hard. India loses more money to power theft than any other country in the world. India’s annual economic loss is up to INR 3000 crores. It is estimated, power theft reduces India’s GDP around 1.5 percent. Theft of electricity is a perennial and common problem across Indian utilities. Electricity theft is the root cause of the financial pitfall of the electricity distribution companies leading to many issues like overloading power distribution systems, power disruptions, poor quality of supply and higher electricity prices.  Different factors like high energy prices, education, a weak financial situation of a consumer, tax, rural population figure, unemployment and agricultural production rate, weak accountability and enforcement of law are some significant variables which reflect reasons to hide total power consumption that determine electricity theft and thus impact the distribution losses. The means of electricity theft are diverse, like, direct hooking from line, tampering with meters, injecting foreign materials and drilling holes into electromechanical energy meters, inserting film, depositing a highly viscous fluid, using strong neodymium magnets, changing the incoming and outgoing terminals of the meter, damaging the pressure coil of the meter, resetting energy meter reading, improper or exposing the meter to mechanical shock. The basic principle is changing the metering of electric energy which can change the metering of voltage, current and power factor. As long as anyone of these is changed, it can make power meter turn slowly, stop or even reverse. The thieves use flimsy connections and cheap materials to illegally hook up to the grid, which leaves long-lasting damage and makes it less reliable. Again with the development of science and technology, techniques of electricity theft become more sophisticated, comprising high technology content and hidden functions, which leads to enormous difficulties to deal with the situation. But, more worryingly, falsifying meter readings blurs the real demand for energy. It means utilities cannot pinpoint surges and dips and manage the grid effectively. Electricity theft is closely related to governance indicators. The problem has socioeconomic, political, environmental and technical roots. Identifying and confirming theft is a time-consuming, inefficient and expensive process. Electricity crisis cannot be handled without combating rampant electricity theft in the country. Nevertheless, electricity theft cannot quantify exactly but can only be estimated. Realistically it is not possible to eliminate electricity theft in entirety but as a measure can be detected, prevented and reduced to a certain extent by applying technical engineering solutions, managerial and administrative skills and restructuring power system ownership and regulation.

Regulatory Control

Various regulatory measures have been taken by the Government to reduce the loss due to theft and control it so that it does not go out of control. The Electricity Act, 2003 (EA-03) has declared theft of electricity as a specific crime and it defines this offence under Section 135(1) accordingly whoever, dishonestly, — (a) taps, makes or causes to be made any connection with overhead, underground or under water lines or cables, or service wires, or service facilities of a licensee or supplier as the case may be; or (b) tampers a meter, installs or uses a tampered meter, current reversing transformer, loop connection or any other device or method which interferes with accurate or proper registration, calibration or metering of electric current or otherwise results in a manner whereby electricity is stolen or wasted; or (c) damages or destroys an electric meter, apparatus, equipment, or wire or causes or allows any of them to be so damaged or destroyed as to interfere with the proper or accurate metering of electricity; (d) uses electricity through a tampered meter; or (e) uses electricity for the purpose other than for which the usage of electricity was authorised, so as to abstract or consume or use electricity, is an offender for theft of electricity.

Section 135(1-A) EA-03 enables the licensee or supplier to immediately disconnect the supply of electricity, upon detection of such theft of electricity and lodge a complaint in writing pertaining commission of such offence in police station having jurisdiction within 24 hours from the time of such disconnection. However, upon deposit or payment of the assessed amount or electricity charges, the licensee or supplier shall restore the supply of electricity within 48 hours of such deposit or payment, irrespective of the complaint.

Section 138 EA-03 makes interference with meters or works of licensee also to be a punishable offence. In Suresh Ganpati Halvankar v. State of Maharashtra[1], the Supreme Court has categorically held that Sections 135 and 138 which impose a maximum sentence of three years; both deals with theft of electricity and are compoundable offences under Section 152.

These offences of electricity theft are covered by special law hence general law under Section 379 of the Penal Code, 1860 (IPC) is not applicable. To try the offences of electricity theft power is conferred exclusively on the Special Court constituted under Section 153 of the Act and the provisions of sub-section (5) of Section 154 specifically invest the Special Court to determine any dispute regarding the quantum of civil liability in theft cases.

The provisions pertaining to theft of electricity taken as a whole, evince, imprisonment clause added to the theft of power is a secondary resort. The real focus is on the collection of revenue which is chargeable to the offender according to the financial gain incurred by him brought out by the assessment of the assessment officer. There are very low measures for severe punishments to dissuade from committing a crime.

National Electricity Policy, 2005 gives special importance upon the theft of electricity and lays stress to ensure effective implementation of the measures as provided in EA-03 by the States and distribution utilities against theft of electricity.

Operational Administration

As long as power remains an essential service for both residential and commercial users, there will always be people willing to cut corners and break the law to avoid paying for their electricity usage. The discoms should define a detailed loss reduction trajectory for power theft loss yearning “as-is” loss situation to desired “to-be” corollary. Operational governance is the most fruitful plan of action designed to achieve an aim to reduce electricity theft. The traditional way of detecting theft of electricity is to carry out an on-site visual inspection to see illegal connections to an electricity meter. Also by observing customer’s load profile data, it is possible to detect significant deviations, if there is, significant step-change this could be an indicator of theft.  Further keeping careful watch and chasing the culprit with thorough investigation and pursuing appropriate punitive action shall check the menace. A regular vigilance raid in vulnerable areas is a coherent strategy against electricity theft. To curb electricity theft, the utility may opt theft reporting consumer incentive scheme, employee incentive schemes, employee capacity building programme,
permit reward/facility or concession, etc. for giving information regarding the theft of electricity or for any other cooperation. The name of the law-breaker may be publicly notified to bring fear for the loss of reputation. The utility may offer a connection regularisation scheme, waiver of surcharge scheme, interest waiver scheme, to subdue theft. Public outreach programmes or communication programme through media ads, posters, and videos can help in disseminating information related to penalties in case of electricity theft among the consumers. Billing of agricultural consumption on actual consumption recorded in the digital transformer radiometer (DTR) would discourage the theft of electricity.

Distributed losses are mainly caused due to theft of supplied electricity at the customer premises. For the prevention of theft, utility should ensure safety and security of the overhead lines, meters and metering equipments such that the same would not be easily accessible to the consumer on his premises. Implement a high voltage distribution system (HVDS) in slum areas where direct hooking cases are predominantly observed and proffer effective sealing and locking system for the meters, metering equipments and busbars. Replacing LT aerial bunched cable in place of bare LT conductor lines could result in reduced direct “hooking” done on lines. Installing underground cables can suppress theft practices.

Technical Solutions

Electricity theft is the difference between the power supplied and the user’s consumption in the distribution system. It can be identified by making a comparison between the power distributed to the line and the power actually consumed by the load. Computerising the metering system introduces numerous new vectors for power theft. The evolution of algorithms of machine learning has overcome the disadvantages of conventional methods. Application of appropriate classification and clustering techniques, as well as concurrent use of transformer meters and anomaly detectors, make the algorithm robust which leverages the predictability of customers’ normal and malicious consumption patterns and provide a high and adjustable performance with a low sampling rate. Smart electronic metering infrastructure in smart grids allows for more manageable energy theft localisation. Advanced metering infrastructure (AMI) has made it possible to sense and store large amount of data communicated by smart meters. A novel rule-based theft detection technique provides accuracy in individual electricity theft detection. This theft detection technique frames a set of rules according to the result of comparison with threshold values.

Detection of electricity theft in India is based upon smart meter database non-technical loss detection approach. Smart meter measures the energy consumption of a consumer and securely communicates this and the additional information to the utility. The smart meters are able to deliver bi-directional communication of data which enables the utilities to collect information regarding the electricity feedback to the power grid from customer premises. These meters can execute control commands remotely as well as locally. This data is sensitive, confidential, and access to this data is only with few personnel. Security guidelines are formulated for transmission, collection, storage, and maintenance of the energy consumption data. Smart meter can be the best option to minimise electricity theft, because of its high security, best efficiency, and excellent resistance towards many of theft ideas in electromechanical meters.

India is, therefore, planning to install smart meters in every home and business as part of its ongoing effort to improve efficiency by monitoring and transmitting power use data. Smart meters can help distribution utilities deal with their financial challenges by monitoring usage and improving billing and collections including curb of power theft.


Consumers on the distribution system can be categorised as industrial, commercial and residential. The lax monitoring of power use in agriculture is a legacy of decades. The area of operation for each distribution company possesses different social, political and economic conditions. This makes likelihood and extent of theft, its detection and modes of theft differ among the utilities. In spite of diversity, moderate to high rate of theft and moderate to low detection rates prevail in most of the distribution companies. The intensity and incidence of electricity theft differ in different parts of the country and is diverse among category of customers. Still, the electricity theft by a consumer essentially bears a risk of being detected and punished. However, detection of illegal consumers and to take action against them is an extremely challenging problem and in particular when the crime is taking place with the connivance of bribe accepting utility employees. This tough task of power theft has to be managed tenaciously with sensitivity, flair and expertise.

*Assistant Professor of Law and Dean External Relation, Gujarat National Law University & Faculty Advisor to GUVNL-GNLU Research Fellowship on Energy Law and Policy.

[1]    IA No. 117535 of 2017 in Criminal Appeal No. 156 of 2018, decided on 22-1-2018 (SC).

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