PIL challenging compulsory use of smart prepaid electricity meters remains pending in HC as Maha govt temporarily puts off decision to mandate pre-paid meters

The petition highlighted the arbitrary way in which the scheme was brought in, the hardships that people will face and taking away the right of the consumer to choose

In February of 2024, a public interest litigation (PIL) was filed in the Bombay high court challenging the compulsory use of smart prepaid electricity meters, claiming that it takes away the right of the consumers must have the option to choose. The said petition comes after the Ministry of Power, vide a circular dated August 16, 2018, had informed all states and distribution companies (discoms) that they would have to shift over to smart prepayment meters/prepayment meters within three years. The Central Electricity Authority (CEA) amended its meter regulations in 2019 and, as per Clause 4(1) (b), all new consumer meters must be smart meters with prepayment features. Existing meters must be replaced with smart meters with prepayment feature within a time-frame.

The Electricity (Rights of Consumers) Rules, 2020, notified on December 31, 2020, provided that “no connection shall be given without a meter and such meter shall be the smart pre-payment meter or prepayment meter”.

Based on the abovementioned changes being mandated by the government, by former Mumbai mayor Nirmala Prabhawalkar and Harshad Swar moved the petition in the High Court of Bombay highlighting the hardships this scheme will have on the people by stating that “The implementation of the scheme to install smart prepayment meters/prepayment meters will cause extreme hardships and havoc on the poorest of poor class of people living in slums, chawls of Mumbai and rural hinterland.” 

Focussing on the right of the consumer to choose between pre-paid and postpaid meters, the petition emphasised on Section 47 (5) under Electricity (Rights of Consumers) Rules, 2020 under the Electricity Act, 2003, which allows consumers to opt for prepaid or post-paid meters. “The petitioner states that the above said rightful option of choice, which is protected by the Act, is sought to be snatched away by a colourful exercise of administrative overreach by resorting to a mechanism of notification of Rules under the Act by way of delegation legislation and which is void ab initio,’’ the petition provides. 

The petition also highlights for the scheme appears to have been brought in that in arbitrary there was no widespread publicity, and consumer bodies were neither consulted nor taken into confidence by governments and discoms. Even the serious doubts being expressed by consumer bodies, which ranged from the actual cost of the meter to the accuracy and reliability of such meters, were not given any importance. 

Postpaid electricity metre policies give consumers time to make financial decisions. By doing so, uninterrupted power supply is also guaranteed. However, in the prepaid electricity metre scheme, electricity supply will not start without payment of electricity bill. As a result, citizens will be inconvenienced, the petitioners have pointed out in the petition. It informs that there have been instances of erratic billing in other States where the scheme has been implemented. The petitioner states that “In such a scenario, the supply to the consumer will get automatically disconnected and the consumer will be at the mercy of recharge to restore his supply and has limited recourse to agitate for recovery of excess deduction or exorbitant debit in his account.’’

Through the petition, the issue of raised cautions about people, mainly senior citizens who are not comfortable with smartphones, becoming vulnerable to online fraud and scammers.

In addition to highlighting the hardships that people will face in securing funds to work in accordance to the pre-paid policy, the petition also pointed to the several implications of these meters. As per the petition, if the smart meter is not recharged in time for any genuine difficulty or due to any technical snag, consumers are likely to face automatic disconnection. Furthermore, the system is also bound to lead to large-scale unemployment of employees from meter reading and billing sections of discoms, and such mass scale unemployment is going to create massive socioeconomic problems.

In addition to this, the petition also pointed to the liquidity issues that the country will have to face if discoms insist on replacing existing meters with prepaid smart meters. As per the petition, after the meters are replaced, then consumers can also insist on immediate refund of the security deposits lying with all these discoms. Consumers will be justified in refusing to adjust these security deposits against their future bills because technically the day the discom installs a prepaid meter, it has no legal right to hold the security deposit even for one single day. This can create serious liquidity issue for discoms. 

The petitioners have said that the claim of reduction in payments through this scheme is also bogus. To explain the same, the petitioners cited a report of the Hindustan Times, which provided that MSEDCL declared payment default by 87511 consumers which is 0.32% of its 2.7 crore connections. They have alleged that the whole exercise is “being solely done to protect the revenue of private players taking over the role of distribution of energy…” 

Hence, through the petition it has been alleged that the smart system may be cost effective for discoms, but considering the genuine practical difficulties likely to be faced by consumers and also keeping consumer interest in mind, government must consider providing postpaid facility. The petitioners have also mentioned in the petition that they had previously also written to the union and the state electricity regulatory commissions before moving High Court, to highlight the “difficulties citizens of Maharashtra will face and calling upon them to provide the option of choice to the consumer between prepaid or postpaid connections.” The same reaped no result.

It is essential to note that the Maharashtra government has, on June 15, announced that it will hold back the rollout of smart meters for domestic consumers. Deputy Chief Minister Fadnavis and Energy Minister Nitin Raut had provided that, “We have decided to put on hold the installation of smart meters in homes. This decision has been taken based on the feedback received from consumers and experts.” However, it is essential to point out that the scheme has only been put off for residential consumers, and not completely dropped. As per the announcement, the government now aims to resolve the apprehensions of the people. 


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