Ofgem said up to 25,000 cases of electricity theft are detected each year costing consumers £200m or around £7 per customer.

According to figures provided by electricity suppliers, up to one third of the volume of electricity stolen each year is used to power cannabis farms.

The regulator has put forward new proposals that would require suppliers to detect, investigate and prevent electricity theft. Suppliers would face fines if they broke the rules.

Under the new proposals, suppliers would have to set up a national theft risk assessment service to help them target premises where there are strong suspicions that electricity is being stolen.

Ofgem’s proposals also include:

•Setting up an industry code of practice governing how theft investigations should be carried out to ensure there is a consistent approach across the industry.

•Coordinating efforts to tackle theft relating to cannabis farms with other agencies such as the Home Office and local police forces.

•Sharing best practice across industry about how cases of theft have been identified.

Andrew Wright, Ofgem chief executive, said: “Ofgem wants to make sure that consumers are paying no more than they need to for their electricity, and lives are not put at risk. It’s critical that suppliers do all they can to clamp down on electricity theft. This is why Ofgem is introducing new rules to encourage better theft detection.

“The reforms build on similar obligations we introduced at the start of this year for suppliers to address gas theft more vigorously. All these measures will help to improve the confidence of consumers, who want reassurance that the energy market is fair.”

Ofgem is pressing suppliers to introduce a 24 hour hotline for customers to report suspected theft.