Prepaid electricity meters: Desired results are yet to come

Prepaid electricity meters were vouched to be a major tool for the distribution entities (discoms) to cut pilferage. While a number of states have rolled out this practice, the results say that it is difficult to implement.

The prepaid meters have failed to achieve the desired results of restricting under-recoveries from Rajasthan state government departments. The discoms in Rajasthan are not able to cut the power supply of government departments even if they fail to recharge them when required.

According to the sources, the prepaid meters are being removed from the public buildings such as health centres, house courts, the system’s inability to adapt to the new payment processes. Despite the discoms offering a 5% discount on electricity bills for using the prepaid meters, the prepaid meters failed to get the desired response. 

A senior official from one of the Rajasthan discoms said, “there was a total lack of communication on the new modes of payments” and “funds were not disbursed to the (government) departments on time for paying bills in advance”.

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The meters were visualised as one of the ways to turnaround discoms by decreasing the gap between the cost of power supply and revenue received by ensuring timely payments from bulk customers such as state government departments and local bodies. Some states such as Bihar, Maharashtra, Karnataka and West Bengal have started installing prepaid power meters at public facilities.

One of the major blockages in the reforms of discoms is the increase in outstanding dues from the government departments. Union power minister RK Singh stated that “the power supply of the government offices were never disconnected,” and also,  “if we install the prepaid meters, supply will automatically be disconnected to defaulting consumers”. The minister added that “this particular problem has largely been addressed in Bihar” where the prepaid meter system was recently executed.

The power ministry wants all the meters to be “smart prepaid” across the country by the end of FY 2022. The draft of the recommended revisions to the tariff policy states power supply shall shift from “a postpaid basis to prepaid basis” within three years and “a smart meter will be in a prepaid mode for bigger consumers and simple prepaid meter for smaller consumers”.

However, this idea has been opposed by a Maharastra discom on the base that it will be huge expenditure and large manufacturing capacity is required.

For any clarifications/feedback on the topic, please contact the writer at komal.chawla@cleartax.in