Reducing Copper Theft with Copper-Clad Steel:

An American Perspective

Tim Hadsel-MaresBusiness Development Director

Fushi Copperweld, Inc.

Objectives of Presentation:

1. Provide a background of the copper theft situation in USA

2. Show examples of how Copper-Clad Steel, along with other methods, helped to reduce theft

A Quick Definition

• Copper-Clad Steel (CCS): A composite conductor that is the product of copper tape and steel rod which have been permanently bonded together.

Copper Theft in USA

• Copper thefts in all 50 states– 95% of all utilities have experienced

copper theft

• Critical copper is often exposed and unguarded

• Scrap dealers rarely question source of material– Recovered copper is usually

untraceable because material is rarely marked

The Cost of Theft

• Replacing materialwith newer, more expensive material

• Labor costs• Lost revenues from outages• Missed deadlines• Insurance rate hikes• Additional security• Public relations

A Billion-Dollar Problem…

• U.S. Dept. of Energy estimates losses from copper theft to exceed $1B per annum

• FBI warns that copper theft is a consistent threat to national security

• Human cost: danger to public and workers

…and it’s Getting Worse

• Copper theft claims have doubled in the last six years

• According to the latest statistics from the National Insurance Crime Bureau which tracks incidents of metal theft, 25,083 claims were filed from 2009 to 2012, compared with 13,861 from 2006 to 2008.

• Nearly 96 percent of the claims in the more recent period were for copper theft.

The Usual Suspects

• Lone drug addicts looking to cash in quick

• Gang members involved in petty crime

• Highly organized bands of professional metal thieves

• Tools: Sawzalls, bolt cutters, wire clippers

“WE HANG THE PETTY THIEVES AND APPOINT THE GREAT ONES TO PUBLIC OFFICE”- Aesop (620 BC - 560 BC)

OUR STRATEGY (UNFORTUNATELY):

SO, COPPER HAS BEEN STOLEN….NOW WHAT?

Increased Security Measures

• Increased security measures are usually the first response to theft– Video cameras– Security personnel– Increased patrols– Monitoring stations– Alarm systems– Tougher physical barriers

The Copper-Clad Steel Option

• Utilities don’t need to use pure copper for all applications

• Grounding wire doesn’t need the same conductivity as transmission or distribution wire

• Copper-Clad Steel is a good alternative

Steel is Hard… and Hard to Steal

• Resistant to cutting• Bimetallic bond is

permanent—copper cannot be recovered by scrap dealers

• Thieves do not return to the same place again

More Disguise: Copperweld® CAMO™

Some Utilities Using CCS

A FEW EXAMPLES…

Jackson Energy (Kentucky)

• “So far this year, Jackson Energy has spent close to $62,000 to replace copper wire that has been stolen from the utility's poles and lines.

• "We're finding them weekly now," Vice President of Engineering & Operations Carol Wright said of the stolen wire.

• Jackson Energy has taken steps to help curb the thefts. Some of the wire used by the co-op is now copper clad, or fake copper. It is made primarily of steel with a copper weld.” Excerpt cited from Jackson Energy website News Release May 22, 2008

Withlacoochie River Electric Co-Op (Florida)

• Withlacoochie found itself needing proactive solutions to combat the growing expense of copper theft. They began working closely with the county sheriff's offices to track and stop any sale of material that might have been its property.

• Next, they teamed up with manufacturers to select material that had minimal recycle value and began using a CCS for grounding.

• The co-op installed 6,000 feet of the CCS in 2008 on a trial basis. In 2009, it installed 40,500 feet in its service area. The co-op continues to use CCS, and report that the deterrents have had a positive effect on its losses caused by theft, saying they have “been curing” the copper theft epidemic. Excerpt cited from Utility Products Magazine, August 2010

Xcel Energy (Minnesota)

• “Xcel Energy spokesman Tom Hoen said thieves are starting to target the copper ground wires attached to the company's poles throughout Minneapolis.

• Thieves have been cutting the wire from the ground to as high as they can reach, which is usually about five or six feet, according to a city of Minneapolis press release.

• To deter future thefts, Xcel employees are replacing the copper wiring with copper-clad wires as reports of stolen copper come in, Hoen said. Excerpt cited from Minnesota Daily News Release April 24, 2008

Westar (Kansas)• Copper wire was stolen from a substation of Kansas-based

Westar Energy in April, knocking out power in south Wichita and causing more than $150,000 in damages.

• "It's been like an epidemic this spring, and we couldn't keep up with the thefts," said Pat VanSyoc, director of substation maintenance for Westar.

• "The damage can be quite extensive," he said. "It costs anywhere from $3,000 to $5,000 for us to repair a substation, plus there's the loss of energy for our customers.”

• "We're using Copperweld® wiring now instead of just copper," said VanSyoc. “We’re expecting this will cut down on thefts.” Excerpt cited from CNBC, “Copper Theft is Epidemic,” August 2013

Additional Marketing Methods

• Pole ground / substation signs & labels

Substation Signage

Working with Scrap Dealers

Free Samples

• Copper grounding was being stolen every two weeks from this site

Free Samples

• Left cut ends of CCS outside of the gate after installation

• Pieces were gone within 3 days; thieves never returned. Site is still secure since June 2012

Summary: What has been successful?

• Increased security measures• Taking the value out of the equation with CCS• Coloring wire; paint or using CAMO™• Marketing; signs, press releases, radio ads• Working with scrap dealers & law

enforcement• Free samples

Thank You

Q & A

Tim Hadsel-MaresBusiness Development Director

Fushi Copperweld, Inc.

Reducing Copper Theft with Copper Clad Steel:

An American Perspective

Tim Hadsel-MaresBusiness Development Director

Fushi Copperweld, Inc.