Theft of Electricity and Regulatory Changes in Cundinamarca Area: An approach from the Perspective of the Economics of Crime

Abstract

Theft of electricity has become one of the main problems faced by public service companies (ESP) in Colombia. This article rationalizes the increase in incentives for theft of electricity by Codensa’s customers. In the context of an alleged natural monopoly, the article shows the consequences of the company raising the electricity fees for customers in the face of an increase in the theft of power supply in Bogotá and some areas in Cundinamarca. Using a scaled panel data base of the building, we found that, since the ESPs cannot fine the customers who steal electricity, there was an increase of 0.14 standard deviation in the average theft of electricity, corresponding to the cost overrun represented by the hidden demand purchased (equivalent to 8.487 gigawatthours [GWh]), and which is socialized with fees.