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Relevance: Inefficient discoms have been a critical problem for India’s power sector since long.
Synopsis: Smart meters 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 program are executed well and not in haste.
Background:
- Announced in Union Budget 2020 –21, smart metering of electricity consumption is one key measure being adopted by India to alleviate the financial distress of electricity distribution companies (discoms).
About Smart Metering:
- A smart meter is an electronic device that records information such as consumption of electric energy, voltage levels, current, and power factor.
- Smart meters communicate the information to the consumer for greater clarity of consumption behavior, and electricity suppliers for system monitoring and customer billing.
Need for smart metering:
- They are expected to significantly improve metering and billing efficiencies, and in turn, increase discom revenues.
- The revenue gaps of discoms have been increasing and were exacerbated by the pandemic. Further their dues to power generators have been piling up and are now estimated at around ₹70,000 crore.
- Thus, significant investment in smart meters is being proposed by the Centre. A large-scale roll-out is justified on expectations of a vast improvement in payment collection efficiency.
However crucial issues need to be addressed before state electricity regulatory commissions (SERCs) approve state-wise roll-outs.
Issues with Smart Metering:
- First, there seems to be discrepancies within data sets of the National Smart Metering Program (NSMP) and state discoms.
- Second, not much information is available in the public domain on other aspects of the roll-out of these programs.
- Third, consumer trust over smart meters is declining. In UP, on 12 August 2020, about 160,000 smart-metered consumers faced automatic disconnection of supply as a result of system faults.
- Fourth, data privacy is another issue. Smart meter data can reveal sensitive information that is analyzed from electricity usage patterns.
Way Forward:
- The focus should be on creating 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. The discoms should invest in engaging consumers to generate trust in these new systems.
- 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.
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Source: Livemint
