House Metal Theft Ad Hoc Study Committee

Chairman Forese announced that the tentative date for the final Metal Theft Ad Hoc Study Committee meeting will be November 15, 2012 at 10:00 a.m.

He recognized Senator John McComish in the audience.

Chairman Forese explained that the notion of having a public safety meeting on metal theft started with conversations with Ann Seiden of Southwest Gas Corporation (SWG) about increasing penalties by going after those who are putting the public in danger. He related that increased penalties have not been put in place nationally. He hopes to give law enforcement and prosecutors the tools they need to go after the thieves.

PRESENTATIONS:

Ann Seiden, Southwest Gas Corporation (SWG), thanked Members for taking the time to tackle this issue. She said that metal theft is a significant issue for Southwest Gas not only for the property damage and loss that can result but also for the public safety implications that can exist. She introduced Ken Baldwin, Risk Management and Safety Administrator, Southwest Gas Corporation.

Ken Baldwin, Risk Management and Safety Administrator, Central Arizona Division, Southwest Gas Corporation (SWG), gave a slide presentation on Metal Theft Natural Gas Utilities (Attachment 1). He reviewed how SWG delivers gas to its customers. The presentation showed pressure regulation stations located throughout the Valley where high-pressure gas is reduced down to the delivery systems and said that these facilities have been victims of metal theft. When lines are tampered with, thieves leave the gas escaping at a high pressure, creating a public safety issue. Gas meters are also a common item stolen from SWG, as well as other system components, such as valve lids, piping, and wires that contain copper. He gave a recent example of an Ohio theft in a vacant rental property. The house filled with natural gas after the thief removed the piping to sell for scrap. The gas system was still active and the house exploded, destroying that home and damaging homes on either side of the property.

Mr. Baldwin advised that since the beginning of the year, an increased number of metal thefts from vacant residences have occurred in one geographic area in Arizona. Meters were stolen, leaving regulators and piping behind. In the course of its investigation, SWG, in conjunction with the Metal Theft Unit of the Phoenix Police Department, began tracking thefts to address this issue on a more global scale, focusing on prevention, partnering with law enforcement, learning from other utilities and informing recycle and scrap yards.

In response to Representative Vogt's query on gas service being turned off when a house becomes vacant, Mr. Baldwin advised that SWG may not be notified that a property has been foreclosed or vacant, so there is a period of time, from 60 to 90 days, when the gas is still turned on.

Representative Gallego asked about penalties in the Ohio explosion. Mr. Baldwin said he hopes the thief would be charged with arson of an occupied structure, which is a class 2 felony.

Chairman Forese queried whether any SWG meters have ever been recovered or anyone charged in the theft of meters. Mr. Baldwin answered in the negative.

Allison Bell, Senior Government Affairs Representative, Arizona Public Service Company (APS), thanked the Chairman for his dedication on this issue. She introduced Bob Parrish, Director, Enterprise Security Operations, and Bryan Dezso, Section Leader, Security Investigations, Arizona Public Service Company.

Bob Parrish, Director, Enterprise Security Operations, Arizona Public Service Company (APS), gave a safety presentation on how metal theft affects APS (Attachment 2). He related that the high price of copper and aluminum over the last three years has made metal theft a national issue. Criminals are stealing metal from homes, businesses and power, gas, water and telecom sites. Thieves are taking wire from power poles, transformers, overhead wires, and grounding wires. Grounding wire theft and high voltage wires which fall into water are particular public safety issues and can result in death by electrocution. There is also a huge economic impact, i.e., stolen copper worth $100 can result in $50,000 in repair costs. Additionally, critical infrastructures can be disrupted or damaged affecting power, telecommunications and water supplies. He noted that APS has approximately 500 substations which are frequent victims of break-ins since there is generally no security at the facilities.

Bryan Dezso, Section Leader, Security Investigations, Arizona Public Service Company (APS), reviewed training and awareness at APS (Attachment 2). He stated that obstacles to addressing metal theft are that business license requirements are often not enforced and not all law enforcement officers have a detailed knowledge of metal theft statutes. He noted that property crimes are outweighed by the greater number of personal crimes, and law enforcement resources are limited. He related that he has provided training/briefings to prosecutors and law enforcement personnel, resulting in better coordination and understanding of the problem.

Mark Giebelhaus, President, Marlin Mechanical Corporation, testified on the environmental and public health concerns relating to metal theft. He stated that the Clean Air Act of 1990 requires persons servicing or disposing of air conditioning and refrigeration equipment to certify to the Environmental Protection Agency (EPA) that they have acquired refrigerant recovery and/or recycling equipment and are complying with the requirements of the rule. Regulations prohibit individuals from intentionally venting ozone-depleting substances into the atmosphere while maintaining, servicing, repairing or disposing of air conditioning or refrigeration equipment. Technicians are required to pass an EPA-approved test to become certified under the mandatory program. EPA performs random inspections and penalties can be assessed up to $37,000 per day for any violation. EPA also offers a $10,000 reward for anyone reporting a violation for venting Freon into the air. Concerns are that refrigerants are flammable in a confined area and are toxic and can cause illness as well as death.

Representative Vogt asked how much Freon is in an average residential air conditioning unit.

Dan Burke, Regional Operations and Compliance Manager, Goettl Air Conditioning, answered Representative Vogt, advising that the amount of Freon varies depending on the size of the unit, from five pounds in a residential unit to many pounds in a commercial unit. In addition, there are a variety of refrigerants. He believes that most people are not familiar with the severe fines and danger of releasing these chemicals into the atmosphere and the opportunity exists to make the general public aware of them. He asked Members to consider passing legislation similar to EPA rules and regulations which may act as a deterrent to thieves.

Chairman Forese commented that some people believe that the EPA has overregulated and made business difficult. He asked Mr. Burke's opinion whether he agrees with the EPA's caution on this issue and asked about Freon dangers. Mr. Burke stated that he believes the EPA regulations and rules are appropriate. In response to the question on Freon, he advised that Freon is dangerous because it is colorless and has no odor.

Chairman Forese asked the result of stripping an air conditioning unit in a home. Mr. Burke related that the units are usually outdoors so the refrigerant is released into the atmosphere.

Thomas Earley, Lieutenant, Tucson Police Department, spoke about public safety and law enforcement issues relating to metal theft. He explained a case investigated earlier this year which had the possibility of becoming a direct threat to public safety. Grounding wires in an underground vault were exposed due to theft, potentially exposing thieves and other people coming into contact with the wires to electrocution. He stated that the City of Tucson has the same issues that the City of Phoenix faces, so legislation to address these issues would be very beneficial to law enforcement.

Representative Vogt asked about the success rate in finding the perpetrators. Lieutenant Earley noted that metal thieves are not exclusively metal thieves; they will steal anything.

Amber Smith, Executive Director, Metropolitan Pima Alliance, reviewed a slide presentation on Pima County Metal Watch (Attachment 3). The Alliance is a real estate land-use organization in Pima County, including developers, home builders, engineers, planners, and architects. The Alliance partners with 20 organizations and over 100 businesses to work on metal theft issues. She said that thieves will steal anything if they think it has value. Metal theft is a public welfare and safety issue, as well as an economic issue. The coalition has established outreach programs and has extended its campaign to discuss prevention, reporting and volunteering, and has been working with 88-CRIME, the tip hotline in Tucson to report these activities. So far, $12,000 has been raised by the coalition to track data, create brochures, speak to different organizations and create a website. An event will be held in Tucson on November 15, 2012 where metal theft will be condemned, advising the public of the economic and public welfare impact.

Mike DiMaria, Director of Legislative Affairs, CenturyLink, testified that CenturyLink has similar issues as other utilities. Thieves cut transmission fiber wires and cables, resulting in service interruption to customers, time-consuming repairs and other public safety issues. Lately, CenturyLink has been seeing more cuts to fiber optic lines, affecting entire areas of communities. He said it is important to focus on disincentivizing thieves by putting stricter penalties in place. Tougher laws will allow county prosecutors to go after criminals and get the word out that there are big penalties involved in metal theft. He said that awareness has improved in the last few years but there is still a long way to go. He believes in the need for more public awareness. Metal theft is a nationwide problem. This task force has the opportunity to do something significant on the criminal penalty side, and CenturyLink will continue to work to increase those penalties.

In response to Representative Vogt's query about where Arizona ranks nationally on this problem, Mr. DiMaria stated that New Mexico has a bigger problem and has passed some strict legislation last year. He said the trend is if theft is shut off in one area, thieves go to different areas, so CenturyLink is looking for national legislation to address this issue.

Representative Vogt asked whether there is model legislation that Arizona can review.
Mr. DiMaria answered that legislation involving the retail value of the theft is being considered in other states, such as was passed in Arizona last year. The State of Oregon passed laws setting the retail value at $60,000; however, CenturyLink would prefer to see a lower threshold.

Without objection, the meeting adjourned at 11:02 a.m.

______________________________

Joanne Bell, Committee Secretary

November 1, 2012

(Original minutes, attachments and audio on file in the Chief Clerk’s Office; video archives available at http://www.azleg.gov)

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METAL THEFT AD HOC STUDY COMMITTEE

October 24, 2012

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Members Present

Members Absent