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July 2008

New Scrap Metal Theft Law
Benefits Electric Co-op Members

Consumer-owners of Wisconsin electric cooperatives were given a substantial victory this legislative session when the Wisconsin Senate and Assembly passed a new law increasing the penalties for the theft and sale of scrap metal. This bill, known as 2007 Wisconsin Act 64, was intended to discourage the theft of metal from utility substations, farmer cooperatives, and other locations. Recently, the value of metals such as aluminum and copper has increased dramatically because these metals are in high demand due to new construction in places such as China and India. Unfortunately, along with this increased value came an increase in the thefts of such metals across the state. For example, there have been at least 26 reported thefts from Wisconsin electric cooperatives during the past two years.

Prior to this new law taking effect, scrap metal dealers were essentially unregulated and could buy or sell “scrap metal” with little or no tracking system. This meant that there was little incentive to identifying the material as stolen, making it difficult for law enforcement to prosecute thieves.

While there is a substantial economic cost of metal theft, there is a more significant safety concern. The unauthorized entry into a substation creates a high possibility of severe injury or death for the thief, cooperative employee, or the general public. Thefts often result in the tampering of equipment and substantial damage to facilities, exposing live wires, and the causing of power outages. All of these endanger the public.

Even when utilities and other affected industries takes steps to prevent thefts—such as providing locked storage buildings or fences—thefts still occur since buildings can be broken into and fences can be cut. The only way to limit the market for stolen goods is to make it more difficult to convert scrap to cash.

Cooperatives worked with a wide-ranging coalition including scrap yard owners, recyclers, and other industries impacted by this new law.

The new law enables your cooperative to recover the replacement cost of the stolen metal and the cost of repairs to the cooperative’s equipment and facilities. This provision is intended to move the financial burden off of cooperative members and on to the thief.

Representative Phil Montgomery (R–Ashwaubenon) and Senator Jeff Plale (D–South Milwaukee) were the primary bill sponsors and have demonstrated their support of you and your electric cooperative by moving this new law through the 2008 legislative process. At least 20 other states have enacted similar laws.

Finally, the Eau Claire Leader Telegram reported on June 4, 2008, that a number of west central Wisconsin law enforcement agencies are investigating the sale of scrap metal by scrap and salvage yards. This wide-ranging investigation will likely help demonstrate the severity of this problem.


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