Due to their capacity to enhance the operational and financial performance of utilities, smart meters are taking centre stage in the power distribution sector. Smart meters also open up various possibilities for improved management of power demand and consumption through the implementation of time-of-day (ToD) tariffs and data analytics of electricity consumption patterns. In a recent development, the Ministry of Power (MoP) released the draft Electricity (Rights of Consumers) Amendment Rules, 2023, which focus on the implementation of ToD tariffs for smart metered and commercial and industrial (C&I) users. They also stipulate operating protocols for consumers with smart and prepaid meters. The new rules are expected to give consumers more control in dealing with power utilities as well as bring in more transparency.
Key highlights of the amendment rules
Meter reading: The draft rules require the smart meters to be read remotely at least once a day and other prepayment meters to be read by an authorised distribution licensee representative at least once every three months. Smart meter consumers should have access to their energy consumption data through a website, mobile app or SMS. Customers with smart prepayment meters should also have access to information on energy consumption and available balance on a real-time basis.
Maximum demand: The draft rules protect consumers against penalty based on the peak demand for the period prior to the installation of smart meters. In case the maximum demand recorded by the smart meters exceeds the sanctioned load in a month, the bill for that billing cycle will be calculated based on the actual recorded maximum demand. In case of an increase in the maximum recorded demand, the lowest of the revised sanctioned load will be automatically reset starting with the billing cycle of the following calendar year and will be the lowest of the maximum recorded demand for the previous three months where the recoded maximum demand has exceeded the sanctioned load limit during a calendar year. In contrast, if the maximum demand is decreased, the sanctioned load must be revised in line with the supply code/standards of procedure established by the respective regulatory body.
ToD: According to the draft rules, ToD tariffs should be made effective immediately after installation of smart meters, for the particular category of consumers with smart meters. The ToD tariff for C&I consumers having a maximum demand of up to 10 kW should be made effective from April 2024 and for other categories of consumers (except agricultural consumers) from April 2025. The ToD tariff specified by the state electricity regulatory commissions for C&I consumers during peak period of the day should not be less than 1.20 times the normal tariff and for other consumers it should not be less than 1.10 times the normal tariff.
Apart from this, the draft rules state that the tariff during solar hours of the day defined by the state electricity regulatory commissions should be at least 20 per cent lower than the standard rate for that group of consumers. Additionally, peak hours shall last longer than solar hours, unless otherwise specified by the state commission or the state load despatch centre. Moreover, the distribution licensee’s website shall display the tariff for each category of consumers and the consumers will be informed about any changes to the tariff, including fuel surcharges and other charges, at least one billing cycle in advance, via the websites of the distribution licensees as well as through energy bills, SMS messages, mobile apps, and other means.
Large-scale installation of smart meters/prepayment meters require a significant financial investment. The full benefits of such expensive systems will only be realised if the data gathered from such systems can contribute to better demand assessment, which can aid in better system planning for utilities. In the case of smart prepayment meters, access to electricity consumption, average hourly voltage, daily interruption minutes, and balance amount in real time will be available to enable consumers make better decisions.
While the new rules address issues regarding providing consumers access to data collection, some of the concerns around data storage, data privacy and cybersecurity need more attention, as per industry experts. Apart from this, they express concern regarding the computation of maximum/peak demand. With respect to billing based on maximum demand, it is not clear whether the maximum demand refers to demand for any three consecutive months or the average maximum demand for the three lowest months of the year.
The new rules will go a long way in streamlining the procedures and protocols for smart meter reading and access to smart meter data by consumers. By enabling the implementation of ToD tariffs, the rules will enhance energy efficiency and conservation at the electricity consumption level. Given the benefits of smart meters in improving the quality of power supply and energy conservation, various state utilities that are lagging in smart meter installations will need extended support to promote greater uptake across the country.