Consultancy Support to the Haryana Electricity Regulatory Commission

Findings of a Consumer Survey and emerging

recommendations

29 September 2010, Haryana

Siddhartha Mitra, Director, CUTS International

CUTS International

Presentation Outline

● Rationale

● Objectives

● Scope

● Sample Design

● Survey Findings Consumer Awareness

Regulation and Reforms

Energy Issues

Tariff and Open Access

Metering and Billing

Complaint Redressal

Quality of Supply and Coverage

● Proposed Roadmap for Social Accountability

● Other Recommendations

Rationale for the Study

● Power sector reforms were initiated to ensure consumer participation, promote competition and private investment

Haryana Electricity Reform Act, 1997

• Restructuring of the Electricity Sector

• Constitution of an Electricity Regulatory Commission

• Creation of avenues for consumer participation in regulation/reforms

● Given that a decade has passed, evaluation of the status of consumer participation, as targeted, is due

Extent to which consumers are aware of rights and responsibilities

Platforms and modes adopted by the regulatory agency to foster consumer participation

Associated changes in regulatory decision making and improvement in quality and reliability of service

Objectives

● Assess the role and scope of HERC in promoting consumer participation in regulatory decision making

● Review the status of consumer satisfaction and awareness

● Recommend measures to promote adequate public participation in the sector

Scope: Coverage of Attributes of Consumer Empowerment

● Consumer awareness about HERC and its consultation process, key regulations for consumer protection etc; and resulting extent of consumer participation in regulatory issues

● Effectiveness of communication channels evolved by distribution companies

● Consumer satisfaction in regard to quality of service, release of new connections, metering and billing (efficiency, accuracy, convenience)

● Consumer perceptions about effectiveness of complaint registration and redressal

● Consumer awareness of the need for energy conservation and its manifestation through practice

Sample Design

● Multi stage sampling which took into account geographical spread, relative literacy and rural-urban divide to ensure representative nature

● Separate surveys for a) domestic, agricultural and commercial (DAC) consumers and b) industrial consumers

● Survey (a) targeted 1000 consumers by surveying 1134 respondents or around140 consumers per district

● Survey (b) targeted 28-29 respondents per district with both LT and HT categories represented

SURVEY FINDINGS

Consumer Awareness and Participation: Regulatory and Reform Issues

● Low awareness/participation about/in regulatory and reform issues

DAC consumers

• Only 2 percent aware of the constitution of HERC and almost none about its functions and regulations

• Around 0.5 percent aware of websites of distribution companies or HERC

Industry consumers

• Only 14 percent aware of functions of HERC

• Only 14 percent aware about key regulations

• Only 3 percent visit the websites of HERC and distribution companies

• Only 3 out of 227 respondents have ever made submissions to HERC but none are satisfied with decisions

Consumer Awareness about Energy issues

● High awareness among DAC consumers about energy efficiency issues

90 percent are aware and 95 percent of those aware are using equipment such as CFL lights, and energy efficient fans, coolers etc

● However, among agricultural consumers about 64 percent are unaware of the availability of energy efficient pump-sets though 81 percent of those aware are using these

● Very high awareness about the need for energy conservation among industrial consumers

99 percent aware of the need

62 and 50 percent in HT and LT categories respectively have taken proactive steps

Consumer Awareness about Tariff and Open Access Issues

● Lack of awareness among DAC consumers regarding tariff structure and cost of supply issues with adverse implications for efficient use of electricity

87 percent not aware of increasing tariff slabs

55 percent believe they are paying high tariffs and even in highly subsidised agriculture only around 66 percent perceive tariffs as ‘just fair’

● Low awareness among industrial consumers about regulations for enabling open access

None of the respondents have applied for open access so far

Billing and Metering

● Meter related issues 71 and 70 percent of DAC and industrial consumers respectively are

satisfied with meter functioning

95 percent of DAC consumers report that meters are being read regularly

High incidence of dissatisfaction with meter testing among DAC consumers (71 percent dissatisfied) contrasted with predominant satisfaction among industrial consumers (about 88 percent satisfied)

● Billing related issues 98 and 97 percent of DAC and industry respondents respectively reported

regular billing while 64 and 67 percent respectively reported never having received a faulty bill

Problem among DAC consumers, especially uneducated ones, in understanding bills

Only 7 percent were able to understand bills completely

Complex format and absence of details in vernacular language are some underlying reasons

Complaint Redressal

● Dissatisfaction about redressal of metering and billing complaints Among DAC complainants, 59 percent in regard to metering and more than 50

percent in regard to billing reported that redressal did not take place within the HERC stipulated period of a week

55 percent of industrial complainants were not satisfied with redressal of billing complaints with 36 percent reporting that more than a week was taken to attend to their complaints

Average time taken to resolve a metering complaint in the case of industrial consumers much higher than the limit specified by HERC though 67 percent were resolved within this time limit

● Problems with Complaint Redressal Mechanisms 98 percent of DAC consumers were unaware about Consumer Redressal

Forums while suggestions of 99 percent about CRMs were never taken

88 and 72 percent of DAC and industrial complainants respectively were not given a complaint registration number and many felt that complaints were not being registered properly

Very low use of modern means such as SMS, email and calling toll free etc.: for example, 97 and 84 percent of industry and DAC complainants respectively used ‘charged calls’ or personal visits

Quality of Supply and Coverage

● Inadequate supply and voltage fluctuations are the major concerns of consumers 44 percent of DAC respondents have experienced damage/burning of

equipment due to unsuitable voltage while 56 percent of industrial respondents have reported experiences of inadequate voltage

68 percent of DAC consumers and 58 percent of industrial consumers experienced shutdowns of more than 10 and 6 hours respectively

Most DAC and industrial consumers (98 and 95 percent respectively) reported not getting prior information on shutdowns

● Release of new connections is widely perceived as non transparent and costly (54 percent of DAC applicants over last three years are dissatisfied)

Consumer Empowerment/ Satisfaction Indices: Findings

● Consumer empowerment index involving separate evaluation of consumer awareness and consumer satisfaction indices constructed for DAC consumers

● Only a consumer satisfaction index constructed for industrial consumers

● Indices reiterate the findings of the previous slides

● Wide variation in indices across districts though not across the jurisdictions of the two electricity distribution companies

Proposed Road Map for Promotion of Social Accountability

● Envisaged outcomes Enhanced consumer welfare due to incorporation of consumer

preferences Improved service delivery and better complaint redressal Enduring partnership among consumers, regulators and

utilities would ensure a mechanism for continuous improvement

● Three Phases (total of 3.5 years)

Phase I (6 months) Supplement consumer survey results with follow up

interviews with regulator and focussed group discussions to throw up problem areas

Bring these to the attention of CSOs, consumer organisations and interested individuals to encourage the evolution of local champions

Proposed Road Map for Promotion of Social Accountability contd..

● Three Phases (total of 3.5 years)

Phase II (1 year): Creation of capacity of local champions in Undertaking audits of regulation and governance; Analysing audits and use of these to make recommendations Voicing these recommendations during interactions with

regulator and utilities

Phase III (2 years): Handholding of the local champion during one feedback cycle

Conduct of a consumer survey Analysis of survey findings for formulation of

recommendations Voicing of recommendations

Other Recommendations

Intended Improvement

Actions Needed by HERC

Actions Needed by Distribution Company

Actions needed on part of consumers/CSOs

Improved quality of service

Collection of baseline data; monitoring of data at utility level; facilitation of communication between distribution companies and consumers

Proper repair and maintenance; monitoring data at feeder level; strengthening communication and obtaining consumer feedback

Provision of feedback; promotion of curbs on theft of power and prevention of energy wastage

Efficient metering and billing

Monitoring and incentivising compliance with SoP; facilitation of 100 percent metering

Greater transparency in billing and metering; promotion of use of modern means for bill payment; smart metering initiatives

Provision of feedback to distribution companies; random check on energy meters; promotion of regular payment of dues and curbs on meter tampering

Other Recommendations contd…

Intended Improvement

Actions Needed by HERC Actions Needed by Distribution Company

Actions needed on part of consumers/CSOs

Enhanced consumer awareness

Use of vernacular in communications; use of mass media; geographical dispersion of public hearings; building of capacity among select stakeholder groups

Spreading useful information through electricity bills, local television and radio; support to HERC for mentioned capacity building

Active participation in public hearings; generation of consumer awareness; provision of feedback to HERC and distribution companies on key issues

Active consumer participation

Training seminars and workshops; appointment of a consumer advocate

Provision of required information to consumers/CSOs; supporting the HERC in mentioned capacity building

As mentioned above; to not be influenced by vested political interests

Efficient complaint redressal

Compensation for non compliance with SoP; organisation of public hearings and Lok Adalats; publication of relevant information regarding facilities/regulations

Spreading consumer awareness through billing statements; proper registration of consumer complaints; computerisation of complaint redressal system

Written complaints; promoting the making of requests for registration numbers; provision of feedback to HERC/discoms about systemic issues; undertaking proper follow up of complaint redressal

Thank You