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Telcoms and utilities count as the favorite targets of copper thieves

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If you have ever been a victim of theft, you know it is not an easy place to be. Electric utilities and phone companies feel the same way.

Given the increasing frequency of copper thefts spurred by rising metal prices, electrical power and telecommunications companies are looking to law enforcement, security measures and substitution to curb costs and deter would-be thieves.

While all copper consumers are vulnerable to theft, none is quite as exposed as phone companies and electric utilities, whose vast infrastructures can be next to impossible to police. Copper thieves tend to target low-traffic areas and favor stealing water pipes from churches and foreclosed homes, cutting down phone and power lines, and stealing the thick, pure copper grounding rod from electrical substations.

"In many cases the copper thefts occur in very isolated areas where there's not a lot of traffic and the locations are hard to get to," said Lee Gierczynski, Verizon Communications Inc.'s media relations manager for western Pennsylvania and West Virginia. "They may cut down a section of cable between two telephone poles and it can take our crews between 24 and 48 hours to get new cable back in place."

The impact on copper consumers is twofold service disruptions for their customers and repair costs.

"We've had 35,000 to 40,000 customers be out of power for up to a couple of days," said Walt Johnston, vice president of power delivery at Southern California Edison Co., which serves more than 13 million people.

Worse, repair costs can run into the millions of dollars annually. A recent phone cable theft in western Pennsylvania resulted in more than $120,000 in damage to Verizon's facilities, for example, and Alabama Power Co., which provides electricity to more than 1.4 million customers in the state, estimates that replacing grounding wire at a substation costs a minimum of $8,000 in parts and labor.

"If you've had 100 substations hit in a year, that adds up very quickly," Randy Mayfield, security director at Alabama Power, said. Since substation thefts often result in fires, the cost can escalate to between $200,000 and $300,000 in substation equipment damage, he added.

Such thievery also carries hefty risks. "Anyone going inside an electrical substation is looking death in the eye," a spokesman for one major domestic electrical utility warned.

Copper thefts tend to track red metal prices, with instances increasing as metal prices rise. While most utilities reported a marked decline in thefts in 2009—when spot copper prices on the Comex division of the New York Mercantile Exchange averaged $2.3654 per pound, down from $3.1318 in 2008— many are seeing an uptick this year, with copper prices averaging $3.245 per pound.

Deterring theft brings higher security costs. Alabama Power instituted an aggressive security program in 2008, when instances of theft hit 163. The company switched to cut-resistant wire fencing, razor ribbon instead of barbed wire, and placed real-time video surveillance at more-vulnerable substations. "We arrested 54 people for stealing copper in Alabama just from our facilities," Mayfield said. The following year, theft instances fell by almost three-quarters to just 41, but "a lot of that admittedly has to do with the cost of copper going down," Mayfield said.

Some copper consumers have focused their efforts on law enforcement. Both Verizon and AT&T Inc. offer rewards for information leading to the apprehension of copper thieves or the recovery of stolen copper, as do several utility companies across the country.

Consumers also have pushed to restrict thieves' ability to resell their loot by working with legislatures to tighten how the copper scrap and general recycling industry operates.

Alabama Power helped sponsor a law mandating that scrap dealers collect identification and vehicle descriptions, in addition to issuing payment via check. "That's helped a lot to deter people from stealing copper, and it helps us identify individuals when we have a theft," Mayfield said.

California passed a similar law in 2008 requiring recyclers to collect a copy of a picture ID, name, license plate number and thumb print from scrap peddlers, and delay paying them for three days. "It used to be a cash-and-carry business. This new law has dramatically changed that market," Johnston said.

At the same time, consumers are pursuing substitution, where possible. While copper wire remains the core material for phone service and electricity transmission, many utilities are switching to copper-clad steel grounding rod at their electric substations, which is cheaper than pure copper, lowering replacement cost. That does little to prevent theft, however, since most thieves won't know the difference between the two products until they've taken it to a recycler

But substitution is expensive, Johnston said. "We have 900 substations, so the cost to retrofit all of these (with copper-clad steel grounding wire) would be huge. You'd spend a lot of money, way more than the amount you lose each year to theft."

In the case of phone companies, Verizon finds that thieves can't distinguish between copper cable and the smaller fiber optic cable, since both are covered with insulation.

And many say copper remains the best investment for their customers. "Our plan is to just continue to use copper products because it's the best-performing product for our system," the spokesman for a major utility said. TATYANA SHUMSKY


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