Why “New India” is so relevant for today’s electricity sector

The Economic Times, November 28, 2019

By Udai S Mehta

Citizen-centric movements had an important role in walk to Independence and consolidation of Indian Democracy. Taking the cue from past, the government has launched ‘New India’ campaign which involves creating an India of our dreams. The path to new India calls for a transformation, powered by strength of each and every citizen of the country. Such strength, derived through constructive citizen participation is very pertinent in today’s electricity sector in India ‘Saubhagya Scheme’ has been able to spread the coverage of electricity to near universal. The Ministry of Power portal data suggests that household electricity coverage of 99.99% in the country has been achieved as on date. The next step should now be improving the quality of service which could be an outcome of several factors, with financial performance being a cardinal concern. But, citizen participation, which also has a considerable role in improving services, is an aspect, which is rarely discussed.

Optimal citizen participation can bring in several benefits to the electricity sector. Their participation in policy-making not only provides comprehensive information for regulators to take wise and equitable decisions, but within electricity sector, better regulatory participation of consumers creates opportunity for discoms to improve their demand and profit. Additionally, given the complexity of the paraphernalia surrounding the sector, for efficient functioning of the infrastructure, continuous flow of data and feedback from all nodes and corners is necessary. It is also important to note that better engagement between electricity governance and consumers is also required to break the trust deficit between two parties.

Rightly so, Electricity Act 2003 recognized the importance and established statutory mechanisms and processes for consumer protection and interaction. Subsequent
policies and regulations, such as National Electricity Policy 2005, National Tariff Policy and Electricity Rules 2005 charted out finer details. Passing of a decade after implementation of these provisions throw an interesting light on persisting challenges and future course correction that might be required.

A healthy participation of consumers in the electricity sector is a function of presence of a system defined by optimal regulations, its effective functioning including grievance redressal which generates satisfaction within consumers, and existing capacity, awareness and enabling ecosystem that encourages long term interaction. Several factors such as access, transparency, mutual sense of accountability and independence have direct and indirect effect on these aspects.

The Electricity Act relies on the wisdom of state regulatory commissions in incorporating a suitable structure for Consumer Grievance Redressal Forum (CGRF).The provision has led to disparity between different states with respect to location, constitution and composition of such bodies. For example, Maharashtra has a 3-tier mechanism where internal forums have been established by discoms. However in case of unsatisfactory resolution consumers can approach an external forum and later,the electricity ombudsman which are independent authorities. Contrary to that, in Rajasthan, forums have been set up only by discoms at their different operations levels, chaired by its officials. It is important to note that overall objective of setting up a consumer grievance redressal forum is to settle disputes through arbitration by independent experts reducing time of resolution and workload on the formal judicial system.

Access is another area of concern, especially for states with large geographical area and regional diversity. In almost all the states, the Office of the Electricity Ombudsman and State Electricity Regulatory Commissions (ERCs) are located in capitals, making them inaccessible to consumers living in far flung areas. Given that these institutions are essentially consumer centric in nature, their relevance when established in centralized location, calls for a scrutiny. And should it be the consumer who always reaches the regulator or it should be other way around? For example, many commissions such as the Human Rights Commission have now started approaching consumers in districts which have increased the accessibility considerably. In addition, CGRFs established for dispute resolution have been also found non-functional and non-existent in many cases.

Conclusively, enough regulatory modifications are required to enshrine accountability and manage regional diversity in the current system. Technology could be great enabler in this aspect.

Having said that, many of the rural consumers will not walk through any such system and procedures because of no awareness and capacity, as documented in the surveyconducted for 300 participants in 4 districts of Rajasthan. The findings of the exercise suggest that almost none of the consumers were aware about CGRF, ombudsman, and the regulatory commission and standard of performance (SOPs) for services. If this anyway suggests that consumers were approaching avenues for internal grievanceredressal, only 1.75% of them said that they are aware of centralized Toll Free Number facility and surprisingly, around 65% said they would not take any action even if faced an issue. On the other hand, a survey of 14 civil society organizations working in various districts in Rajasthan suggests that even with strong willingness, their current capacity stops them from regulatory participation in the electricity sector. The situation requires urgent attention since participation in regulatory process requires a combination of economic, financial and quantitative skills to provide constructive interventions.

The situation related to poor capacity and awareness requires immediate action, especially since even with enabling framework for participation, its performance will be below par if consumers do not have any awareness. Even though it has been continuously emphasized through various regulatory provisions to undertake capacity building measures, the efforts of the state government, distribution companies and the commission remain dismal. Due to existing void, non-governmental initiatives have been implemented in various states, including a recent one in Rajasthan. Consumer Assistance Cells (CONASCs) have been established in six blocks of four districts of Rajasthan which provide advisory support to consumers on issues related to their rights and responsibility, undertake awareness activity to educated consumers about pertinent issues, and work as a bridge between local electricity officials and consumers. Under the initiative, various capacity building measures are undertaken to educate civil society organizations on constructive engagement with electricity sector decision-making process.

Remarkably, 2022 has also been marked as a year to achieve ‘24×7 Power for All’. Efforts are underway and undoubtedly, The Indian power sector has grown in leaps and
bounds after the introduction of the Electricity Act and particularly on service quality and access fronts. Though gains on infrastructure front have been achieved, it is high time that consumer protection and participation also received considerable emphasis, not only in words but in actions. The ‘New India’ of future should also imbibe a new electricity sector with mature levels of consumer participation.

Anurag MIshra, Associate Fellow at CUTS International co-authored this piece

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