Rights and Restrictions: New electricity rules empower consumers, but come with caveats

New electricity rules empower consumers, but come with caveats

The Ministry of Power has issued new rules regarding the rights of electricity consumers. The rules are aimed at empowering consumers and emphasise their right to reliable services and quality electricity. They are expected to benefit an estimated 300 million existing and prospective consumers across the country. This move is expected to make the power sector more consumer-centric by clearly outlining the rights of consumers and the services they are entitled to.

New rules

Under the new rules, consumers will be able to easily apply for electricity connections and pay bills online. There is also a focus on the prompt provision of connectivity. In case of violations, the defaulters will have to pay a penalty. The rules cover key areas of electricity supply, including obligations of distribution licensees, metering arrangements, release of new connections and modifications of existing connections, and grievance redressal and compensation mechanisms. There are certain exceptions to these rules, especially in the context of agricultural use. For instance, it will be mandatory for a distribution licensee to supply round-the-clock power to all consumers. However, the state electricity regulatory commission (SERC) may specify fewer hours of supply for some categories of consumers, such as agriculture. The consumer has a right to minimum standards of service for the supply of electricity from the distribution licensee. However, no connection will be given without a meter. A prepayment meter, either smart or regular, must be installed with the connection. In addition, provisions must be specified for the testing of meters and the replacement of defective, burnt-out or stolen meters. Further, the discom is expected to put in place a mechanism, preferably with automated tools to the extent possible, for monitoring and restoring outages. Consumers will also be entitled to compensation in case the standards of performance, as notified by the SERC, are violated by the discoms. In addition to these responsibilities, discoms have to set up mandatory 24×7 call centres, besides online facilities. There will also be a Consumer Grievance Redressal Forum (CGRF) which will include consumer and prosumer representatives.

Implications for solar

As per the rules, prosumers will maintain consumer status and have the same rights as the general consumer. Additionally, they will have the right to set up renewable energy generation units, including rooftop solar photovoltaic (PV) systems – either on their own or through a service provider. Although the renewable energy installation may also be set up elsewhere on the premises of the prosumer, the total power generation capacity should not exceed the limit prescribed by the regulatory commission. The regulations specified for grid-interactive rooftop solar PV systems will be applicable to such installations.

For potential or existing prosumers with solar power generating systems, net metering will be applicable to loads of up to 10 kW and gross metering will be applicable for loads above 10 kW. Under the net metering mechanism, the billable amount for prosumers is adjusted against the solar power they supply to the grid. Meanwhile, under the gross metering mechanism, the consumer is compensated at a fixed feed-in tariff (FiT) for the solar power supplied to the grid, and has to pay the retail supply tariff for electricity consumed from the grid. Usually, the FiT and the retail supply tariff are different. It will be less attractive for prosumers to set up larger rooftop solar installations if the FiT is not enough to compensate the retail tariff for grid-sourced electricity. Thus, with such limits, the growth of the rooftop solar segment could be hampered.

Net metering has long been considered the primary driver for rooftop solar growth in the country. However, the framework suffered from various drawbacks owing to policy inconsistencies and bureaucratic hurdles, and any policy is meaningless without proper on-the-ground implementation. Moreover, there was a lack of long-term clarity for developers and consumers alike. A few states cancelled net metering for commercial and industrial consumers, who can now only get gross metering connections. This dampened consumer interest in rooftop solar. Further, as the majority of states had a maximum capacity limit for net metering, it was considered restrictive by many players. Although the new regulations clearly demarcate net metering and gross metering, they might further restrict the adoption of rooftop solar, as the only option available for larger rooftop projects is gross metering.

In sum, while the new rules do address some important concerns regarding the rights of consumers to quality power supply, they could impede rooftop solar growth, which has remained modest as compared to utility-scale solar. Thus, for future segment growth, it will be important to minimise bureaucratic hurdles and grant timely approvals so that projects can be installed without delays.

By Meghaa Gangahar