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Business News/ Opinion / Views/  We must exercise caution not to trip over smart meters
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We must exercise caution not to trip over smart meters

India is aggressively pursuing its plan of installing smart meters for electricity usage as a solution to the financial troubles of discoms but poorly done roll-outs have shaken consumer confidence

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Photo: Mint

Smart metering of electricity consumption is one key measure being adopted by India to alleviate the financial distress of electricity distribution companies (discoms). This idea gathered steam after the finance minister announced in the Union budget speech for 2020-21 that all conventional consumer meters would be replaced by smart meters by 2022. A scheme worth 3.05 trillion was unveiled in the budget for 2021-22 that focuses closely on smart metering. So far, over 1.9 million smart meters have been installed, primarily under the Smart Meter National Programme (SMNP), steered by the state-owned Energy Efficiency Services Ltd (EESL). A recent media article, however, reported a proposal to extend the deadline to 2023 and reduce the scale of the programme.

Smart meters, through automatic bill generation and remote disconnection, are expected to significantly improve metering and billing efficiencies, and in turn, increase discom revenues. The revenue gaps of discoms have been increasing, exacerbated by the pandemic, even as their dues to power generators have been piling up, now estimated at around 70,000 crore. To address the predicament of discoms, significant further investment in smart meters is being proposed by the Centre, with a large-scale roll-out justified on expectations of a vast improvement in payment collection efficiency. However, a need-based assessment, especially of small consumers, is crucial before state electricity regulatory commissions (SERCs) approve state-wise roll-outs.

The monitoring and verification of smart meter roll-outs is taking place in varying degrees by various stakeholders in the sector. Basic details such as the number of units installed are currently being reported by the National Smart Metering Programme (NSMP), for example, and also by discoms. However, there seem to be discrepancies within these data sets. For instance, discoms in Uttar Pradesh (UP) claimed the installation of 2.4 million units by the end of 2020-21, but the NSMP dashboard shows only 1.1 million. Further, not much information is available in the public domain on other aspects of the roll-out of these programmes.

Our analysis of six states that have already rolled out smart meters for a few lakh consumers shows that before implementation, effective cost-benefit analyses were either not conducted or shared with the public. Neither is there any disclosure of on-field technical challenges, nor is information available on how discoms plan to operationalize the full benefits of smart meters to address consumer pain-points.

The true cost of the project’s implementation and an assessment of benefits achieved should be critical before smart metering is universalized. Without sufficient regulatory oversight, imprudent costs of such programmes could be passed on to consumers. This highlights the need for a transparent, accountable and participatory mechanism to ensure that the full benefits of such large-scale investments are indeed obtained.

We need a consumer- centric approach. Our transition from the current metering system to a smart one needs to be done in such a way that consumer confidence increases. In UP, on 12 August 2020, about 160,000 smart-metered consumers faced automatic disconnection of supply as a result of system faults. As per media reports, more than 6,000 electricity consumers in the state have opted for permanent disconnection, a sign of their distrust of and dissatisfaction with smart meters. In Bihar, many complaints, particularly related to the recharging of prepaid meters, have been reported on Google’s Play Store apps that are used for meter recharges.

Several case studies from other countries suggest that without proper consumer engagement, smart metering programmes can face challenges in terms of consumer acceptance. It is hence necessary that discoms invest in engaging consumers to generate trust in these new systems, and ensure that the software developed to manage these meters is tried and tested. On their part, SERCs can safeguard consumers by revising their regulations to include specific details on performance standards for smart meters.

Data privacy is another issue. Smart meter data can reveal sensitive information that is decipherable from electricity usage patterns. Ahead of India’s personal data protection legislation, the ministry of power should evolve a framework for handling smart meter data and finalize it in consultation with stakeholders. Regulators should put in place a set of provisions that cover various aspects of data-sharing protocols, purposes, grievance redressal, security, etc. Discoms should appoint data protection officers to ensure requisite consumer privacy. The rights of consumers must be upheld.

In conclusion, smart meters certainly have the power to improve the revenue recovery rate of discoms and ensure better electricity services to the consumer. But such outcomes can be expected only if our roll-out programmes are executed well. Discoms have taken up a big challenge in moving towards the automation of their interface with the consumer. In the country’s haste to achieve targets, though, there’s a risk that the consumer might lose trust in the programme. Roll-out evaluations that can guide mid-course corrections would help smart meters brighten this sector’s prospects.

Manabika Mandal and Shweta Kulkarni are researchers at Prayas (Energy Group), Pune

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Published: 24 Jun 2021, 10:34 PM IST
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