Electricity consumer rights: Make a start

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By M Durairaj

Electricity consumers can now celebrate as right to quality and reliable power is now recognized by the government. Administrative reforms and funds to back it are being provided.

Celebrating World Consumer Rights Day on March 15 every year is a chance to demand that the rights of all consumers are respected and protected, against market abuses and social injustices which undermine those rights. In India, the National Consumer Day is observed every year on December 24 to spread awareness about consumer importance, their rights, and responsibilities. The Consumer Protection Act, 1986 is repealed and replaced by the Consumer Protection Act, 2019.

The Consumer Protection Act, 2019 has been enacted with a view to widen the scope of consumer rights and cover the field of e-commerce, direct selling, tele-shopping and other multi levels of marketing in the age of digitization. The Act came into force on 20th July 2020. This act aims at revamping the settlement and administration process by imposing stricter penalties.

Consumer rights

Consumer protection is linked to the idea of consumer rights and to the formation of consumer organizations, which help consumers to make better choices in the marketplace and pursue complaints against businesses.

District, State and National Consumer Redressal Commissions were established. Alternative mechanisms for consumer dispute redressal have been the topic of debates and discussion amongst the legal fraternity citing the hopping pendency of nearly 22,000 cases before the National Consumer Disputes Redressal Commission (NCDRC) alone. Consumer Protection Act, 2019 pioneered the concept of mediation as a redressal mechanism for disposal of consumer disputes.

Electricity consumer

The International Energy Agency (IEA) in its report on India 2020, states that 67 DISCOMs, mostly owned by the states, have faced chronic physical commercial and technical losses due to the lack of metering and low payment collection rates, leading to high levels of debt and delayed payment or non-payment to generators. The electricity regulators in India are burdened with the single thought of making DISCOMs financially viable entities.

However, the above generalized statement does not apply to DISCOM of Goa and Union Territories of Daman & Diu and Dadra Nagar Haveli (DNH). The electricity department (ED) Goa generated surplus cash of above Rs 100 crore, in the year 2001 and reduced tariff by Rs 0.40 per unit. In the year 2021-22, DNH proposes to reduce tariff by Rs 0.20 per unit.

Quality and reliability of power

Almost two decades ago, when presence of harmonics in Goa Electricity System was brought to the notice of engineers, the said consumer was asked to run from pillar to post. Recently when poor reliability was brought to the notice of ED-Goa, the burden of improvement was put on the shoulders of the consumers.

The Grievance Redressal Forum and Ombudsman are functioning but with the sole aim of settling complaints on billing. The cases on quality and reliability are not generally taken note of.  The above centers on the question whether consumer has right to quality power and reliable power.

Electricity consumer at center stage

The union ministry of power has promulgated rules laying down the rights of power consumers in the country.  When releasing the rules on December 20 2020, RK Singh, the union minister for power and new & renewable energy, said, “These rules shall empower the consumers of electricity and added that these rules emanate from the conviction that the power systems exist to serve the consumers and the consumers have rights to get the reliable services and quality electricity.”

He said that distribution companies (DISCOMS) across the country whether government or private are monopolies and the consumer has no alternative. Therefore it is necessary that the consumers’ rights be laid down in rles and a system for enforcement of these rights be put in place.  “This is what the rules provide for,” Singh said.

The minister further said, “These rules are also an important step towards furthering the ease of doing business across the country. Implementation of these Rules shall ensure that new electricity connections, refunds and other services are given in a time bound manner.  Willful disregard to consumer rights will result in levying penalties on service providers.” He said that this is one of the major initiatives and yet another step by the union government to put consumer in the centre-stage of public utility services. 

Empowering electricity consumers effectively

The said notification does not automatically become applicable to 30 crore electricity consumers. The State Regulatory Commission must notify the state regulations and it has to be implemented. The supporting infrastructures have to be built around it. The existing regulations are inadequate. The key to the rights is automatic payment of compensation in case the rights are not met by the DISCOM.

Role of civil society

The quality of civil society participation in electricity administration, regulation and grievance redressal mechanism at the district and state levels is low. This is especially true at various levels a) articulating electricity related problems faced by consumers and subsequent issues taken up by civil society organizations at the administrative and regulatory level, b) citizens in effectively presenting their case before the consumer grievance redressal forum (CGRF) and Regulator, c) lack of quality inputs in regulatory affairs, d) consumers’ lack of understanding of electricity issues, and e) lack of common platform to enable stakeholders to engage in knowledge sharing. 

Noteworthy NGOs in this area are Pune based Prayas, Electricity Consumer Cell (ECC) and Electricity Consumer Network

from Chennai.

Privatization

Privatization can be a possible solution to overcome the sector’s commercial challenges. Operational autonomy is one of the biggest potential advantages of privatization. The Ministry of Power has issued on September 20 2020, the Standard Bidding Documents (SBD) for encouraging and supporting acceleration of private sector participation (PSP) in power distribution utilities across the country.

Given the limitations of cost-plus regulation, it is unlikely that mere transfer of ownership would be sufficient to realize efficiency gains from the effort. As such, this would imply transition  from ‘public monopoly’ to ‘private monopoly’. In this context, efforts to promote retail competition and monitoring of tariffs and supply and service quality for small consumers should be necessary pre-requisites before any privatization efforts are undertaken.

“For corporate India, privatization of DISCOMs is probably the biggest investment opportunity that is staring at it right now,” says the chairman of Feedback Infra.

In the Union budget, Rs.3.05 trillion is allocated for electricity distribution reform programme to help reduce losses and improve the efficiency of electricity distribution companies (DISCOMs).

The union power minister, in an interview said that centre is ready with a bill to amend the Electricity Act, 2003 to set the ball rolling on abolition of power “distribution license” and allow any company to supply electricity to an area, after necessary regulatory approval.

The author is a senior electrical engineer with 52 years of experience and has worked with the Goa Electricity Department and

Reliance Salgaocar Power Company.