Arvind Rajvedi, Former MD, Madhyanchal Vidyut Vitran Nigam Limited
While the debate on the separation of carriage and content or wire and supply business in the retail electricity markets in India continues, a recent amendment (vide the 13th electricity amendment in the Electricity Supply Code 2005) by the Hon’ble Uttar Pradesh Electricity Regulatory Commission (UPERC) could have a far-reaching impact on distribution utilities in the country.
In short, the separation of the wire and supply businesses in a power distribution utility is to get electricity from one of the many supply companies in a distribution circle over the same electricity distribution infrastructure as mentioned in the proposed amendment to the Electricity Act, 2003. UPERC has initiated a landmark reform by doing away with the principle of having multiple networks within a premises.
The recent amendment has been made by UPERC for a specific group of consumers, that is, dwellers of multi-storied complexes.
These multi-storied complexes used to have a single-point connection from a utility in Uttar Pradesh and the developer/residents welfare association (RWA) were considered to be deemed franchisees responsible for the upkeep of the internal distribution infrastructure, billing and payment collection. Further, it was the responsibility of the builder/RWA to provide uninterrupted supply and hence, provide back-up power for residents as well as common areas using diesel generators (DGs). Earlier dual infrastructure was deployed and double metering with changeover was done that doubled the cost of deployment of electrical infrastructure apart from other challenges such as encroachment of common areas. The Electricity Act, 2003 allowed individuals/consumers to seek direct connection as well as single point connection as per their choice.
With resolution of the above-mentioned single point metering system, the developer/RWA took advantage of consumers as the former had the power of providing connection and disconnection of supply. The consumers were adversely impacted by the addition of various charges in electricity tariff, clubbing of Common Area Maintenance (CAM) and other miscellaneous charges too. Electricity being an essential commodity, consumers had no choice but to endure this.
This rampant malpractice was highlighted and reported to the Hon’ble UPERC, to which the Commission took a bold decision to do away with the single point metering system.
The amendment dated May 17, 2019 not only provides a reprieve to hapless consumers but is a visionary step by the Hon’ble commission. This amendment is a test ground for the separation of wire and supply in a true sense, where over the same network, a distribution utility is billing for the grid and over the same network, the deemed franchisee is billing for another source of power.
Hence, over the same electrical infrastructure of a multistoried society, a distribution licensee and a deemed franchisee are supplying electricity. The amendment envisages the adoption of dual register energy meters over which both the electricity distributors, over the same distribution infrastructure, are billing for their part of supplied electricity. A close observation reveals that much thought has been given in the amendment for paving the way for the separation of wire and supply.
Also, the amendment has saved consumers from the burden of paying twice for the distribution infrastructure, i.e. one for grid, and another for DG back-up. In fact, when grid supply is available, the DG is idle and when the DG is running, the grid infrastructure is idle. The use of dual register energy meter technology not only saves consumers and DISCOMs from the financial burden of deployment of multiple infrastructure, but also results in savings towards maintenance of the electrical infrastructure. A close look reveals that the proposition is a win-win for consumers and the utility.
While going through the findings of pilots, the concept is working well. The pilot was based on M2M technology. Near real-time meter reading, energy audit, consumer empowerment and universal access were witnessed as results of the pilot. Also, prepaid arrangement, separate accounting and separate billing on the same wired network for different sources of supply on different prices have been achieved with this technology.
The UPERC’s move has many more benefits like uninterrupted power supply, less cost, improved customer satisfaction, demand side management and saving of scarce natural resources, including environment protection for the country. This amendment could be followed by many ERCs in the larger public interest.While Noida Power Company Limited has started to utilize this in the larger interest of consumers, the move can be followed by other UP DISCOMs as well.