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Electricity Consumers and ComplianceTrust, Reciprocity, and Socio-economic Factors in Uttar Pradesh

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February 2019 |

Citation: Karthik Ganesan, Kapardhi Bharadwaj, and Kanika Balani (2019) ‘Electricity Consumers and Compliance: Trust, Reciprocity, and Socio-economic Factors in Uttar Pradesh,’ February.

Overview

With the government announcing 100 per cent household electrification in Uttar Pradesh (UP) under Saubhagya scheme, newly connected households are likely to place greater financial burden on electricity distribution companies (discoms) due to poor metering, infrequent billing, and inefficient collection of dues. In an attempt to improve the discom-consumer relationship, this study looks at the commercial losses attributed to domestic consumers, captures the consumer perspective and proposes a policy roadmap for sustaining reliable electricity supply in the state.

This study is based on our survey, conducted in collaboration with the Initiative for Sustainable Energy Policy (ISEP) in the summer of 2018, covering 1,800 households in 90 villages (rural) and 90 wards (urban) in UP. The study also proposes a policy roadmap to help discoms prioritise their strategies for ensuring 24x7 electricity in Uttar Pradesh.

Declining efficiency from supply to collection

Source: CEEW analysis

Key Findings

Power Supply and Consumer Satisfaction

  • The duration of power supply has improved to 17 hours and 12 hours in urban and rural areas, respectively.
  • The gap between availability and requirement is highest in the evening hours (5-8pm) and night (8-11pm) for both rural and urban households.
  • 83 per cent of urban consumers and 63 per cent of rural consumers expressed satisfaction with the discom’s service when supply is available post-sunset.
  • The rural unmetered household consumption for UP’s five public discoms is 36 per cent of the total households’ consumption. However, expected revenue from these unmetered households is only 8 per cent of the total revenue anticipated from the total household consumption.

Metering and billing

  • Only 39 per cent of Uttar Pradesh’s households are metered, billed, and pay their electricity dues.
  • Only 45 per cent of rural households and 90 per cent of urban households are metered in UP.
  • The rural unmetered household consumption for UP’s five public discoms is 36 per cent of the total households’ consumption. However, expected revenue from these unmetered households was only 8 per cent of the total revenue anticipated from the total household consumption.
  • About 77 per cent of rural consumers and 40 per cent of urban consumers who are not billed monthly do not believe their bill is based on meter.
  • Billing is more difficult in rural areas than in urban areas because households are dispersed over a larger area, which raises the administrative costs of manual meter reading and issuance of bills, and because discoms lack the manpower.
  • When billed frequently, rural households pay their dues just as much as urban households do. Rural consumers are no more wilful defaulters than are urban consumers.
  • Consumers who are billed frequently are 57 per cent more likely to pay on time and 72 per cent more likely to pay in full than consumers that are not.

Consumers facing infrequent billing are less likely to make complete payments

Source: CEEW Analysis

Consumer Perception on Electricity Theft

  • 84 per cent of rural and urban consumers believe that hooking of wires (katiya) is unacceptable.
  • Only 52 per cent would choose warning as punishment for anyone using a katiya, against fines or jail term.
  • Only five per cent would choose any severe punishment.
  • Consumer trust in the utility and its actors is low – less than 20 per cent of consumers trust these entities.

When billed frequently, rural households pay their dues just as much as urban households do. Rural consumers are no more wilful defaulters than are urban consumers.

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Retail Tariffs for Electricity Consumers in MaharashtraA Forward Looking Assessment

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June 2018 |

Citation: Kapardhi Bharadwaj, Karthik Ganesan, and Neeraj Kuldeep (2018) 'Retail Tariffs for Electricity Consumers in Maharashtra: A Forward Looking Assessment' May

Overview

This report estimates the rise in tariffs for electricity consumers in Mumbai and the rest of Maharashtra, and explores the effects of increasing renewable energy penetration on the tariffs.

Estimating the future cost of electricity requires an understanding of the different components that make up an electricity bill, the regulatory procedures and influences that impact the tariff for each of these components, and the market and political forces that affect these tariffs.

The estimates incorporate two scenarios of renewable energy growth, high renewable energy penetration and low renewable energy penetration, and their impact on the cost of procurement.

Components of cost of supply for Mumbai DISCOMs and MSEDL*

Source: CEEW Analysis

* Consumers of MSEDCL are not levied standby charges; these are applicable on consumers of Mumbai DISCOMs to ensure uninterrupted supply

Key Findings

  • There are four components that influence an electricity bill - power procurement costs, transmission charges, distribution charges, and cross-subsidy charges.
  • Reliability of supply could be at risk with growing demand and limited transmission capacity for importing power into Mumbai.
  • The resolution of the issue of transmission capacity has been long pending, with right-of-way issues delaying augmentation projects aimed at expanding transmission capacity.
  • The consumers of the Mumbai DISCOMs and MSEDL pay significant amounts for the recovery of regulatory assets.

Source: Pixabay

  • Consumers in Mumbai pay some of the highest tariffs for different categories in India. Despite competition in the distribution business in suburban Mumbai, tariffs have not come down.
  • Electricity tariffs for commercial consumers will increase at an average rate of 2 to 3 per cent. For industrial customers, tariffs will increase at an average rate between 3-4 per cent.
Power procurement costs continue to constitute the largest share of the cost of supply.

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