Electricity (Rights of Consumers) Rules, 2020

Introduction

• The Electricity (Rights of Consumers) Rules, 2020, would allow consumers in India to access a continuous supply of reliable electricity.

Features

• The rules cover various aspects of power supply to consumers in the country, including obligations of distribution licensees, metering arrangements, the release of new connections, modifications of existing connections, grievance redressal and compensation mechanisms.

Impacts

• Accountability: This will make the distribution companies more accountable to consumers, thus reducing their monopolies and giving consumers more alternatives.
• Grievance redressal: To ensure compliance, the government will apply penalties that will be credited to the consumer’s account.
• EOBD: These rules are also an important step towards furthering the ease of doing business (EODB) across the country.
• Time bound manner: Implementation of these Rules shall ensure that new electricity connections, refunds and other services are given in a time-bound manner.

Rules:

1. Rights and Obligations: Duty of every distribution licensee to supply electricity on request made by an owner or occupier of any premises in line with the provisions of Act.

• Right of consumers to have minimum standards of service for the supply of electricity from the distribution licensee.

2. Release of New Connection and Modification in Existing Ones:

• Transparent, simple and time-bound processes.
• An applicant has an option for online application.
• The maximum time period of 7 days in metro cities and 15 days in other municipal areas and 30 days in rural areas identified to provide new connections and modify an existing connection.
• Disconnection and Reconnection Provisions

3. Metering Arrangement:

• No connection shall be given without a meter.
• Meter shall be the smart prepayment meter or a prepayment meter.
• Provision of Testing of meters.
• Provisions for replacement of defective or burnt or stolen meters specified.

4. Billing and Payment

• Transparency in applicable consumer tariff and bills.
• A consumer shall have the option to pay bills online or offline.
• Provision for advance payment of bills.

5. Reliability of Supply

• The distribution licensee shall supply 24x7 power to all consumers. However, lower hours of supply for some categories of consumers like agriculture could be specified.
• The distribution licensee shall put in place a mechanism, preferably with automated tools to the extent possible, for monitoring and restoring outages.

6. Consumer as Prosumer

• While the prosumers (Producer + Consumer) will maintain consumer status and have the same rights as the general consumer, they will also have the right to set up Renewable Energy (RE) generation units including rooftop solar photovoltaic (PV) systems.
• A prosumer is an individual who both consumes and produces.

7. Standards of Performance of License

• Standards of performance for the distribution licensees will be notified.
• Compensation amount to be paid to the consumers by the distribution licensees for violation of standards of performance.

8. Compensation Mechanism

• Automatic compensation shall be paid to consumers for which parameters on standards of performance can be monitored remotely.

9. Call Centre for Consumer Services

• Distribution licensee shall establish a centralised 24x7 toll-free call centre.
• Licensees shall endeavour to provide all services through a common Customer Relation Manager (CRM) System to get a unified view.

10. Grievance Redressal Mechanism

• Consumer Grievance Redressal Forum (CGRF) to include consumer and prosumer representatives.
• It has been made easy by making it multi-layered and the number of consumer’s representatives have been increased from one to four.
• The licensee shall specify the time within which various types of grievances by the different levels of the forums are to be resolved.
• Maximum timeline of 45 days specified for grievance redressal.

Electricity (Rights of Consumers) Rules, 2020

• The many States have not been able to provide quality supply, especially to rural and small electricity consumers.

• The enactment of consumer-centric rules does spark a public debate that brings the rights of consumers to the fore.
• In this vein, the Rules lay an emphasis on national minimum standards for the performance parameters of electricity distribution companies (DISCOMs), without urban-rural distinction, especially for new connections, metering and billing.
• They also reiterate the need for automatically compensating consumers.

But there are many questions unanswered:

• Will these rules really lead to better supply quality?
• What are the limitations of the Rules?

It needs to be recognised that providing quality supply is primarily the responsibility of States and DISCOMs. Similar (or better) provisions by various State Electricity Regulatory Commissions (SERCs) already exist in the Standards of Performance (SoP) regulations. Such regulations have been in place for two decades in most states.

Lack of accountability

• It is not because of a lack of rules or regulations that quality supply is not provided; rather, it is on account of a lack of accountability systems to enforce them.  
• Unfortunately, neither these rules nor past efforts, be it through the draft National Tariff Policy, the proposed Electricity Act amendments, or various committee processes, address these accountability concerns.
• Guarantee of round-the-clock supply is a provision that the Rules emphasise, which might be missing in State regulations.
• But there are doubts on the efficacy of automatic compensation payments toward such a guarantee.
• This is because the availability of power supply is inadequately monitored, even at 11 kV feeders, let alone at the consumer location. Hence, it is not clear how the failure of the power supply is going to be recorded.
• Moreover, such compensation will require serious commitment. For example, according to government reports, rural areas received about 20 hours of supply, in August 2020.
• Following existing regulations, this would entail compensation of hundreds of crores, but the actual amount paid adds up to just a few lakhs in each State for the entire year; even here it involves the resourceful few who could escalate their complaints to higher levels.
• This highlights not only the need for implementation of existing provisions in letter and spirit but also amending them with strong accountability provisions.

Weakening provisions

• Further, the Rules, in a few cases, dilute progressive mechanisms that exist in State regulations.
• Consider the case of electricity meter-related complaints.
• The Rules say that faulty meters should be tested within 30 days of receipt of a complaint. Compared to this, regulations that were published as early as 2004, 2007 and 2012 in Andhra Pradesh, Bihar, and Madhya Pradesh, respectively, say that such testing needs to be conducted within seven days.
• A similar observation can be drawn from the suggested composition of the Consumer Grievance Redressal Forum.
• The Rules say that the forum — constituted to remedy complaints against DISCOMs as per existing laws and regulations — should be headed by a senior officer of the company.
• This is a regressive provision that would reduce the number of cases that are decided in favour of consumers, thereby eroding its credibility. State regulations in Delhi have different eligibility criteria, strictly mentioning that a DISCOM employee, who was in service in the last two years, cannot be appointed as a forum member.
• Maharashtra, Telangana and Bihar, among others, have the option of appointing a retired senior judicial officer or other independent members as the chairperson. It would be unfortunate if States now started amending their regulations to be in line with the Rules.
• The Rules are not forward-looking either, given the government’s intent to promote rooftop solar systems.
• They guarantee net metering for a solar rooftop unit less than 10 kW, but there is no clarity if those above 10 kW can also avail of net metering. This could lead to a change in regulations in many States based on their own interpretations.
• Instead of providing clarity, it is likely that this provision will lead to more confusion.
• The possible litigation that follows would be detrimental to investments in rooftop solar units and would discourage medium and large consumers to opt for an environment-friendly, cost-effective option.

Need for commitment

• What can the central government do to ensure accountability? A useful way to protect consumers would be to nudge SERCs to assess the SoP reports of DISCOMs and revise their regulations more frequently.
• Also, SERCs should organise public processes to help consumers raise their concerns. DISCOMs could be directed to ensure automatic metering at least at the 11 kV feeder level, making this data available online.
• The Forum of Regulators — a central collective of SERCs — could come up with updated model SoP regulations.
• The Central Electricity Authority of India could be directed to collect supply quality data from DISCOMs, publicly host them on online portals and prepare analysis reports.
• Such efforts need to go beyond the quality of information that is currently hosted on portals such as the National Power Portal. Central agencies have taken proactive efforts to ensure regular tariff revision.
• They could also support independent surveys and nudge State agencies to enforce existing SoP regulations. The central government could disburse funds for financial assistance programmes based on audited SoP reports.
• With a focused one-time effort, electrification drives could provide connections across the country. But ensuring round-the-clock supply will require continuous efforts.
• We noted that without accountability, consumer compensation is meagre. The official response to this is the many ‘ifs and buts’ in the implementation of regulations.
• The enactment of the new Rules will not change this status quo. Reducing the ‘ifs and buts’ that delay or deny justice is what governments, DISCOMs and regulators need to jointly work on.
• They should demonstrate the commitment and the willpower to implement existing regulations. It is not yet late to recognise this and initiate concerted efforts to truly empower consumers.