APERC Introduces Draft Third Amendment to Security Deposit Regulation for Smart Prepaid Meters in Andhra Pradesh

Introduction

The Andhra Pradesh Electricity Regulatory Commission (APERC) has issued a draft for the Third Amendment to the Andhra Pradesh Electricity Regulatory Commission (Security Deposit) Regulation, 2004 (Regulation No. 6 of 2004).[1] This amendment primarily focuses on integrating provisions for smart prepaid meters, aligning with updated national standards and government policies on energy metering and efficiency. The amendment reflects the state’s proactive approach toward modernizing electricity distribution and enhancing consumer convenience.

Explanation

1. Background and Evolution:

The Principal Regulation was first notified in 2004 to govern security deposits in the electricity sector. Over the years, it has undergone two amendments in 2013 and 2019 to address evolving requirements. The latest amendment builds upon changes introduced by the Central Electricity Authority (CEA) in 2019 and 2022 and the Ministry of Power’s (MoP) directive on smart meter adoption.

2. Central Directives on Smart Meters:

The CEA mandated the replacement of conventional meters with smart prepaid meters in areas with adequate communication networks. Smart meters are expected to operate in prepayment mode, adhere to Indian Standards (IS), and include features such as remote meter reading. The MoP set deadlines for implementing these changes across India, emphasizing improved efficiency and transparency in the electricity distribution system.

3. APERC’s Proposed Changes:

• Short Title and Applicability:

The amendment is titled “The Third Amendment to the Andhra Pradesh Electricity Regulatory Commission (Security Deposit) Regulation, 2004,” and applies to the entire state of Andhra Pradesh.

• Consumer Security Deposit (CSD) Exemption for Smart Prepaid Meters:
  Consumers opting for new connections with smart prepaid meters will no longer be required to provide a Consumer Security Deposit (CSD), as stipulated under Section 47(5) of the Electricity Act, 2003.
• Adjustment of Existing CSD:

Existing consumers transitioning to smart prepaid meters will have their CSD adjusted against any outstanding dues to the Distribution Licensee. If there is any remaining balance post-adjustment, it will be credited to an e-wallet linked to the smart prepaid meter. This ensures a seamless financial transition for consumers while reducing upfront costs.

4. Rationale and Impact:

• The amendment supports the state’s energy reform goals and aligns with national efforts to modernize electricity infrastructure.
• Prepaid smart meters eliminate the need for estimated billing, increase transparency, and offer flexibility to consumers.
• By removing the CSD requirement for prepaid meters, the financial barrier to new electricity connections is reduced, encouraging wider adoption.
• APERC’s approach demonstrates a commitment to consumer-centric policies while ensuring financial prudence for distribution companies.

Conclusion

The Draft Third Amendment by APERC marks a significant step toward the adoption of advanced metering infrastructure in Andhra Pradesh. By integrating provisions for smart prepaid meters, the state aligns with national directives to modernize the energy sector, enhance consumer convenience, and promote operational efficiency. This progressive regulatory change is expected to revolutionize electricity distribution, benefiting both consumers and service providers in the long term. Public consultation on the draft amendment will play a vital role in refining and implementing these measures effectively.

[1] https://aperc.gov.in/admin/upload/DraftthirdamendmenttoRegulation6of2004.pdf