Companies and households with high electricity usage responsible for 96% of electricity fraud

Published on Thursday, 4 August 2016

  • In 2015, electricity fraud was equivalent to annual electricity consumption of the city of Seville and its metropolitan area.
  • According to data from the CNMC (National Markets and Competition Commission), this fraud costs Spanish electricity users around 150 million euros per year.
  • Company estimates that electricity fraud among low-income households does not even reach 1% of the total.

 

According to Endesa's data, 80% of electricity fraud in Spain in 2015 was carried out by industrial and service companies; over 80% of the remaining 20% was committed by households with high electricity usage.

In light of these figures and taking into account the number of households that have a subsidised electricity rate, it is estimated that, contrary to what is often believed, less than 1% of electricity fraud in Spain is due to illegal connections made by low-income households. On the other hand, most of the electricity fraud is concentrated in supply points with high electricity usage.

This suggests that, above all, fraud is committed by some companies and large households as a way of lowering their electricity bill at the expense of all other users. In fact, the main negative impact of fraud is not borne by the electricity companies themselves; like tax fraud, it directly hits the pockets of other companies and households because it increases their electricity bill. 

According to the data from the CNMC (National Markets and Competition Commission), electricity fraud increased the total electricity bill paid by Spanish users by around 150 million euros in 2015. In physical terms, this fraud amounted to 3.5 TWh, according to Endesa's estimates – an amount equivalent to the annual electricity consumption of the city of Seville and its metropolitan area.

Moreover, in the corporate sector, companies committing this type of fraud prejudice their competitors two fold since they are able to lower the prices of their own products and services while increasing those of their competitors, which is not only illegal but clearly constitutes unfair competition.

On the other hand, electricity fraud is not only a financial burden on the companies and households that pay their bills as well as unfair competition, it is also a serious threat to the health and safety of people who live with or are close to the defrauders. Tampered equipment breaches safety regulations and poses a major risk not only to the people who manipulate them but also to those who live near or pass by them. 

Tampering with an electricity meter or connection may cause electrocution or fire or even lead to the death of anyone who does this, and may cause the same type of accidents for people who live near or enter into contact with such installations. Likewise, it may also have major legal consequences for the offender. Recently, a businessman was sentenced to two years and four months in jail, fined 200,000 euros and disqualified for three and a half years as a result of death by electrocution of one of his workers while the latter was fraudulently manipulating the electricity supply.

Endesa is carrying out effective anti-fraud actions with the support of specialised teams and applying technological advances to its smart networks using tools such as data mining. All of this enabled it to detect over 83,522 cases of fraud in 2015, i.e. nearly 25% more than in 2014, recovering 600 million kWh. Those figures will be amply exceeded in 2016, in view of the results recorded so far.