A boon to discoms, but privacy concerns remain over smart meters

The government’s move to push smart meters could reduce bill shocks for power consumers and potentially rein in the debt woes of distribution companies (discoms) by reducing theft and improving their operational efficiency, but privacy issues continue to linger.

This comes in the backdrop of the Paris Agreement on Climate Change, where India has committed to reduce its carbon footprint by 30-35 per cent by 2030, based on the emissions in 2005. In October, National Investment and Infrastructure Fund (NIIF), India’s version of a sovereign wealth fund, formed a joint venture with Energy Efficiency Services Ltd (EESL) to implement, finance and operate the smart meter rollout programme.

A smart meter is a digital one that replaces old analogue meters. Digital meters can transmit energy consumption information back to the utility at much more frequent intervals and can potentially enable monitoring of consumption more accurately, thereby enabling more informed energy choices.

Curbs on power thefts

Efforts are on to come up with a solution to ensure that payments are made by a larger cross section of customers. “Power is a political subject in India and this is a step forward for all stakeholders. The whole idea of a prepaid meter is to eliminate theft and prevent tampering,” said Prashant Jain, Joint MD & CEO, JSW Energy.

While this is a bold decision, it raises a few questions such as the cost of installing these meters, how the cost benefit ratio work out and whether it would reduce bill shocks.

The cost of installation and maintenance works out to be around ₹20,000 per meter, which is expensive by Indian standards, and has seen resistance from customers, according to a consultant.

EESL MD Saurabh Kumar told BusinessLine that it is aware of the cost factor and is working on ways to bring down costs and at the same time improve billing efficiency.

Savings to discoms

The Uttar Pradesh Power Corporation Ltd (UPPCL), once notorious for lax bill collection, has installed smart meters in 13 cities and expects discoms to save ₹8,000 crore in eight years. Similarly, a total of 4.5 lakh smart meters have been installed in Delhi, Haryana, Bihar and AP.

Kumar also pointed out that the average revenue for disccom has gone up by 20-30 per cent and the average number of disputes has gone down from 46 per cent to almost nil. He said the initiative is trying to address the ₹1 lakh crore worth of power that never got billed.

“The whole idea is to plan power distribution properly and to ensure timely payments,” said Kumar.

Discoms face cash flow issues and their financial losses were ₹28,369 crore at the end of FY19, and overdues – payment default of 60 days or more – from discom to power producers were ₹59,204 crore at August-end, according to government data.

Privacy concerns

However, privacy advocates voice concerns around data breaches. India’s privacy Bill is in the works. “In the light of so many data breaches, we voiced our concerns around who owns the data, what happens if data is misused, where it is stored and it is unfair if the customer ultimately gets stranded,” said a senior privacy advocate.

Kumar pointed out that data will be stored in Indian data centres. In the last few years, power outages in South Africa and Ukraine were attributed to cyber attacks on their power grid.