Consumer Redressal Mechanism under the Electricity Act

Consumer Redressal Mechanism in the Electricity

Since the beginning of supply electricity in India the industry has undergone various changes both structurally and statutorily. Finally in 2003, Electricity Act[1] (Act) was enacted by the legislature to regulate the electricity sector i.e., the generation, transmission, and distribution in India. This act was introduced with many structural reforms but also provided for participation and protection of bulk and retail consumers. However, while discussing about the reforms, rights, and responsibilities of the discoms, regulatory commissions in the sector we tend to overlook on the issue faced by these consumers hence hampering their rights and responsibilities. Therefore, this paper tries to study the present state of redressal mechanism for the protection of consumers. While doing so we will look into the legal provisions provided under the act. Further we shall look into the implementation of those provisions and challenges in two states i.e., Delhi and Rajasthan. Lastly the paper shall try to look into possible suggestion that could be incorporated to build more trust and provide better protection to the consumers.

Current Legal Safeguards

In the 2003 act the preamble states that “Protecting Interest of Consumers” [2]among other things. This shows that during the drafting of the act itself the legislature kept in mind the interest of the consumers and safeguards that are to be provided. The act defines consumer as “any person, supplied with electricity for his own use or use of licensee or the government or any other person engaged in the business of supplying electricity to the public under this Act or any other law for the time being in force”[3].

Under the act redressal mechanism has been made keeping in mind the two different categories of consumers in the sector.

1. Retail Consumers

Retail consumers are common consumers of electricity like the household consumers. In case they are facing problems with the electricity service i.e., short supply of power or charged of excess price for supply of power then the consumer can directly go to the consumer court under the Consumer Protection Act[4] (CPA) and file their complaint.

2. Business Consumers (Industries) also known as Bulk Consumers.

Business consumers are consumers who use huge amount of electricity for the purposes of their own economic activity like industries, factories etc. for them in case of any dispute a different redressal system has been made. Under section 42(5)[5] of the act every discom has to establish a Consumer Grievance Redressal Forum (CGRF) for consumers under the specific guidelines that are provided by the State Electricity Regulatory Commission (SERC). This acts as an internal dispute resolution mechanism where the bulk consumers can directly go the discoms and ask for hearing for the dispute.

If the grievance raised by the consumer is not resolved in the CGRF then the consumer has the right to go to an authority called Ombudsman under section 42(6)[6]. This is an authority established by the SERC which acts as an appellate authority for the CGRF.

A specific time period has to be provided by the SERC under which the Ombudsman will have to decide the case[7]. The parties can appeal the order of the ombudsman at the high court of the state.

In the case of UP Power Corporation [8]case the bulk consumers (industries) argued that the electricity undertaken by them was for their own use and not for resale purposes and hence they should also be considered as common customers and given relief under the CPA. However, the court answered the same in negative and stated that consumption of electricity by industries is for commercial purpose and cannot be equated with common consumers hence they do not come under the ambit of consumer under the CPA and cannot seek relief under the CPA.

The paper takes example of two states to examine the implementation of the same- Delhi and Rajasthan.

Delhi has 4 local discoms who distribute and supply electricity therefore they have set up 4 CGRF for handling the complaints internally and 1 ombudsman. The CRGF composes of 3 independent members in total from the legal field, technical and consumer each. There is not fee charged in Delhi CRGF and time limit for the decision is 60 days[9]. the consumer can appeal the decision at an ombudsman within 30 days and fee of 1/3 amount assessed by CRGF must be deposited. The ombudsman has to pass an order within 90 days[10]. The CGRF and the ombudsman in Delhi have been established via the Delhi Electricity Regulatory Commission (Consumer Grievance Redressal Forum and Ombudsman) Regulation, 2011.

Rajasthan has a unique system, wherein Rajasthan has 3 local discoms however they have created more than 700 grievance redressal forums. They call the forum Grievance Redressal cum Settlement Forum[11] (GRSF). This is a mix of a redressal mechanism and a settlement mechanism. The huge number of forums helps in reaching to the consumer at the lowest levels. They have divided them in four different levels on the basis of monetary jurisdiction-

a. Subdivision- maximum amount Rs 10,000 (only financial claims allowed)

b. Division- maximum amount Rs 25,000 (financial and non-financial grievance of low-tension customers)

c. Circle- maximum amount Rs 3,00,000 (financial and non-financial grievance of high-tension customers)

d. Corporate- maximum amount Rs 3,00,000 (financial and non-financial grievance of extra high-tension customers)[12]

The GRSF comprises of 3 technical members out of which one is independent, and others are employees of discoms. Further for a hearing in the GRSF there is different fee charged at different levels. The GRSF has to decide on the matter within 30-45 days[13] and the parties can appeal to the ombudsman within 45 days.

Difference in the States Implementation

The electricity act gives the SERC the power to make guidelines for the redressal mechanism. This has both its positive and negatives. By doing so the SERCs are given an opportunity to make the rules according to the local context and factors in the state. At the same time as there are no specific frame provided to the SERC by the act or the CERC, this has led to ambiguity and wild maneuvers by the SERC’s as shown below.

The CGRF’s of Delhi has till now taken proactive initiatives to make the consumers aware of the redressal mechanism. Further once every month they a mobile court is organised so that court can reach to the consumers[14]. The members being independent take fair and impartial decisions in favour of consumers and builds trust within the consumer of the impartiality of the procedure. Lastly the CGRF’s in Delhi have been found out to be pro-consumer in cases of violations of SoP.

The directives given by the SERC of Rajasthan are confusing as at one point it differentiates between different jurisdiction via monetary claims however allows the consumer to file the complaint at any level via telephone or in writing. Further initially when the different level system was developed before going to the ombudsman in appeal the party had to appeal at the level above the one which passed the decision making the entire process more tedious and time consuming. However, this way of appeal has been done away with via RERC order. The members who pass the order are also the employees of the discom which may lead to generation of distrust in the consumer before filing a complaint. Lastly, the system works to settle the matter which acts as protective shield for the members and might not be in the best interest of the consumers[15]. The condition of ombudsman in both the states is somewhat similar, as the number of cases, they receive are very little. Both the SERCs have noticed that the consumers generally do not go to appeal to the ombudsman[16]. Further as a single person adjudicates in the ombudsman and belongs to the discom the consumers may feel that the procedure may be pro-discom and lack of appeal to the ombudsman order to the SERC also curtails the number of appeals.

Gaps and loopholes

Firstly, it is important to develop trust with the consumers so that they feel that if they file a complaint an independent and fair tribunal will pass an order. As seen Delhi forums have such independency however Rajasthan forum do not. A step could be that the CERC formulate guidelines for appointment of the members who adjudicate the matter.

Secondly many forums do not accept or take into consideration non-financial claims and the consumers with issue like quality of service and supply do not get any recourse.

Thirdly the standard of performance (SoP) that are set for the discoms are not adhered to by the discoms and when the complaints are made to the forums they merely adjudicate upon the matter. There is no system to monitor the same as well. It seen that only Delhi CGRFs consider SoP and compensation consumer for its violation.

Fourthly the electricity act and the regulations made by the SERC do not provide for any penal powers to the forums or the ombudsman. This leads to non-compliance by the discoms hence hampering the efficacy of the entire process.

Lastly there is very less awareness amongst the consumers about the redressal forums. A survey conducted showed that out of 12000 consumers only 71 were aware about the electricity act and only 4 were aware about the forums[17].

Conclusions and Suggestions

The mechanism of redressal forum has been improving in the country as various SERC work and bring out new rules to improve upon it. The Delhi redressal forum seems to be at the forefront having the most effective adjudication of the complaints. However, their some steps that can be taken by the CERC that are to firstly provide specific guidelines for setting up of the forums, their constitutions and procedure and adjudicatory powers. Doing so will curb the practices of the SERCs where they may favour themselves by making an unfair system. Further consumer participation is required in the sector for understanding the issues that are faced by them.

Recently the government has come up with the Electricity (Rights of Consumers) Rule, 2020 which is made to enhance the interests of the consumers however, its implementation is to be seen.

[1] Electricity Act, 2003. [2] Preamble, Electricity Act, 2003. [3] Section 2(15), Electricity Act, 2003. [4] Consumer Protection Act, 1986. [5] Section 42(5), Electricity Act, 2003. [6] Section 42(6), Electricity Act, 2003. [7] Section 42(7), Electricity Act, 2003. [8] U.P.Power Corporation Ltd. & Ors vs Anis Ahmad, (2013) 8 SCC 491. [9]Section 9(5), Delhi Electricity Regulatory Commission (Consumer Grievance Redressal Forum and Ombudsman) Regulation, 2011. [10] Section 21(5), Delhi Electricity Regulatory Commission (Consumer Grievance Redressal Forum and Ombudsman) Regulation, 2011. [11] Section 4(3), Rajasthan Electricity Regulatory Commission (Guidelines for Redressal of Grievances) Regulations, 2008 [12] Section 4(3), Rajasthan Electricity Regulatory Commission (Guidelines for Redressal of Grievances) Regulations, 2008 [13] Section 8, Rajasthan Electricity Regulatory Commission (Guidelines for Redressal of Grievances) Regulations, 2008 [14] Consumer Participation and Protection in Electricity Regulation, CUTS International. https://cuts-ccier.org/pdf/Consumer_Participation_and_Protection_in_Electricity_Regulation_Study_of_Five_States_in_India.pdf [15] Id. [16] Id. [17] MDRA (2013): Survey of Electricity Consumers to Assess the Level of Consumer Awareness on Consumer Rights & Consumer Grievance Redressal Mechanism Within the areas of -Maharashtra State Electricity Distribution Company Ltd., Mumbai: Maharashtra Electricity Regulatory Commission.

---

About Author

Nishant Goyal

A final year law student at OP Jindal Global University.

LinkedIn