Small Industry wants Prepaid Meters

"It costs Rs 2 lac to set up a small scale industry, whereas the cost of an electrical connection is as much as Rs 5 lac," lamented M.G. Prabhakar, former President, Karnataka Small Scale Industries Association (KASSIA), at an Interaction Meet organised by KASSIA Friday on Prepaid Meters for electricity.

The gathering of small scale industrialists made a strong case for introducing prepaid meters in lieu of the existing system of postpaid meters.

Recently, the Karnataka Electricity Regulatory Commission (KERC), bowing to industry demands, had reduced the security deposit from 3 mmd to 2 mmd. Now, the small scale industrialists are pitching for prepaid meters as they will not have to pay any hefty security deposit.

Addressing the gathering, S.D. Ukkali, Technical Member, KERC said, the system of prepaid meters, tried and tested successfully in South Africa and the UK, would benefit both consumers and suppliers. It would also reduce power thefts and help save power by enabling the consumer to keep a tab on how much power was being consumed, he pointed out. Elaborating on how the system works, he explained: "This is a system wherein you can purchase certain units of electricity by paying for the same at a vending machine. You can then transfer this electricity to the meter at your house and use it. When the energy paid for is used, it automatically gets disconnected. A provision can be made to indicate when the power on your meter is on the verge of getting used up, so that you can recharge it," he explained.

Recently, Bescom had launched prepaid meters in Bangalore with much fanfare. The advantages of prepaid meters are many. The suppliers do not incur any expenditure for collection of bills and meter reading, and consumers do not have to make any security deposit. It helps the consumer to know his power consumption pattern and pave the way for conservation of energy by promoting responsible power consumption. Prepaid meters also mitigate financial risk for the power utilities as they get payment for the service in advance, unlike the present system where it receives payment only after 30-45 days of service. Besides, there is scope for planning the demand for power in advance.

However, Ukkali expressed his inability to accede to the industry's demands for adopting prepaid meters as the issued was embroiled in legal dispute and also due to the high cost of installation of prepaid meters. He appealed to KASSIA to give a representation to the Government to take a re-look on the issue.

On complaints about malfunctioning of meters and erratic power supply, Ukkali responded, "Electricity is like Oxygen. You take it for granted when it is there, but recognize its value only in its absence."

K.C. Naikwadi, former MD, GESCOM, and an expert on power related issues, elaborated on the advantages of prepaid meters.

The power situation in Karnataka has long been a sore point with the small scale industrialists. KASSIA President M.C.R. Shetty pointed out a glaring anomaly where an industrialist shifting from one place to another is required to apply afresh for a fresh power connection, each time he shifts his factory. With the security deposit for a power connection costing a few lacs, it was a severe burden on the industrialists, he complained.

KASSIA Vice President Aravind N. Burji also clarified that 90% of the defaults on power bills was due to government officials and not industrialists, as was wrongly believed.

In its Memorandum presented to KERC, KASSIA also called for reducing the cross-subsidy so that for each class of consumer, the cost will be within +/- 20% of the cost of supply of power, i.e. as contemplated in the National Electricity Policy notified in 2006.

Sri M.C.R. Shetty also demanded that a formula for a reasonable allowance based on the actual expenditure incurred for supply of power needs to be worked out in order to make the recovery process user-friendly. "The present regulation provides for recovery at a fixed level whether or not the licensee incurs such an expense. This has proved to be an impediment for establishment of small scale industry due to the fact that very large amounts are required to be deposited with the licensee even though there is no actual expense incurred in providing supply to that particular installation. The reasonable charge would be to make an estimate of the expenses to be incurred by supply companies and provide for recovery of such expenses plus reasonable supervisory charges," the Memorandum states.

Earlier, Secure Meters CEO Sridhar Sangameshwar gave a Power Point Presentation on prepaid meters. The company which has implemented the prepaid system in Delhi, Simla and West Bengal, has been given a Letter of Acceptance by Bescom, to implement the prepaid system in Bangalore. The meeting concluded with vote of thanks by A. Vijayendranath, Hon.Gen. Secretary, KASSIA. K. Jayaraj Pai, Joint Secretary and V.K. Dikshit, Treasurer, KASSIA chaired the meet.