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Making electricity bills consumer-friendly

The study has been authored Kanika Balani, Pavithra Ramesh, and Prateek Aggarwal
By Council on Energy, Environment and Water
PUBLISHED ON JUL 08, 2021 01:44 PM IST
Improved transparency from discoms and improved consumer feedback through grievance redressal can help build trust between both parties.(HT File Photo)

Information is necessary for both policymakers and consumers of goods and services to arrive at key decisions. In the context of the study, electricity consumers need to receive adequate and transparent information on electricity pricing, consumption, and complaint redressal procedures from their power distribution companies (discoms). Improved transparency from discoms and improved consumer feedback through grievance redressal can help build trust between both parties and enhance service delivery.

Sharing information about consumption patterns, energy conservation, and energy efficiency can benefit the consumers by helping them manage power demand optimally. In this effort, the electricity bill that the discoms send out to its consumers becomes a powerful tool of communication. While consumption and tariff details in a bill enable consumers to be informed about the utility, details about the energy-mix, grievance redressal, and energy efficiency tips create space for greater consumer engagement on these details.

A basic premise for participation by consumers lies in the amount of information that a discom can or will be able to disclose in the electricity bill. For example, Tamil Nadu, which is the focus of this study, has a unique bill format known as the white meter card (WMC). It is a white foldable card used by Tamil Nadu’s discom to inform the domestic consumers of their electricity charges.

The billing information is recorded manually in the WMC by the meter- reader/assessor on a bimonthly basis, unlike the billing system in other states. However, the WMC is short on information as it does not show the break-up of all the charges in the bill, tariff slabs, and the detail on the subsidy provided to consumers. The Tamil Nadu discom’s website provides an online account summary, in which some details are available, but it is accessed by only a fourth of consumers. Taken together, information provided to consumers is not sufficient for them to make an informed decision about their consumption and understand what they have to pay for.

To ascertain the effect of this information gap, a study was conducted based on the following research questions:

1. What is the consumers’ perception of the current electricity billing formats used in Tamil Nadu?

2. How significant is the need to provide more information to consumers through their bills vis-à-vis their level of awareness around the bill elements?

3. What elements could be added in the bills to improve information disclosure by the utility and enhance consumers’ interest in public participation in the sectoral decision making?

The billing information is recorded manually in Tamil Nadu’s white meter card, and it does not provide the break-up of all charges in the bill

Methodology

The State Electricity Regulatory Commissions define the elements to be provided in electricity bills in State Electricity Supply Codes. Elements in the bills of 26 discoms (operating across 21 states) were mapped to ascertain how Tamil Nadu compares with other states in billing practices. The mapping exercise revealed that discoms such as Bombay Suburban Electric Supply (BSES) in Delhi, and Adani Electricity in Mumbai, follow some good

practices of information disclosure. As Tamil Nadu Electricity Supply Code has not defined a comprehensive list of bill elements, only limited information is provided in the WMC.

A combination of surveys and focus group discussions (FGDs) were administered across nine districts in Tamil Nadu, to assess consumer perception towards electricity bills and their awareness levels. The data collection was done between June and August 2019, and 250 respondents participated in the exercise. The surveys with individual respondents provided an insight into the perception of respondents on bill formats and awareness levels regarding various bill elements. The FGDs with the same set of respondents, involving constructive discussions, revealed consumers’ expectations from a model bill.

Consumer perception of Tamil Nadu bill formats

Respondents were asked if they faced any difficulties in understanding the information in WMC; 47% of them found inconsistencies between the manual entry by meter-reader/ assessor and actual meter reading. Further, they also pointed out that information on consumption, slab-wise tariffs, and break-up of other charges is not available.

Further, respondents were asked to rate the WMC and the online account summary along six parameters on a scale of 1 to 5 (1 being the lowest and 5 being the highest). The respondents’ average scores are shown as a bar chart in Figure ES1. Most respondents find the online account summary easy to understand and informative, but it is also criticised for being cluttered. As the online summary provides information only in English, it poses a barrier to those who do not know English. The WMC is preferred by respondents for its ease of access in a physical form. The WMC is also rated on par with online summary on the flow of information due to its simple presentation, but it scores low on all other counts.

Consumer awareness of billing elements and electricity tariff

When the respondents were provided a list of various charges applicable in the bill to ascertain if they were aware of the significance of these charges, more than half of them stated that they understand the significance of current consumption charges. But they were not aware why electricity tax, wielding charges, and additional deposits are levied. Consumers who access the online account summary had a better awareness of the components of the bill than those who only rely on WMC and/or SMS.

As regards subsidy, 96% of respondents knew that the state government provides them the first 100 units free on a bimonthly basis. However, 66% of the respondents were not sure how the slab-wise tariffs apply after subsidy deduction. Interestingly, 77% of the respondents could distinguish how the tariffs for domestic consumers in the state broadly compare with the other categories.

As regards consumer knowledge of grievance redressal mechanisms, 57% of the respondents claimed to be aware of the complaint redressal mechanisms for filing complaints related to service. However, they were mostly unaware of mechanisms other than reaching out to local discom officials. Nearly half the respondents reported that they would reach the discom’s helpline number in case of complaints, but only 13% of the respondents could recall the number correctly. Similarly, only 8% were aware of the Consumer Grievance Redressal

Forum (CGRF) and only 5% of respondents knew about all the three tiers of the grievance redressal mechanism. Consumers’ awareness regarding tariff determination procedure was also probed. Overall, 49% of the respondents reported that they had either seen or read a public notice on electricity tariff or subsidy order and one-fourth of the respondents had heard of public hearings on tariff determination. However, only 11% of the respondents correctly identified Tamil Nadu Energy Regulatory Commission (TNERC) as the agency that determines the electricity tariffs in the state.

The findings from this study clearly point to the need for enhancing consumer awareness in Tamil Nadu at three broad levels: (i) components of the electricity bill and the various charges that add up to the final bill amount, (ii) grievance redressal mechanisms, and (iii) electricity tariff and its determination process. Information disclosure to consumers can be vastly improved by redesigning the bill format by incorporating the attributes deemed essential by them.

Redesigning the bill format

The respondents were queried on the attributes to be included in a model bill format. A majority of them wished the bill carried more information than that provided in the WMC and the online account summary. As much as 79% of the consumers wanted the electronic and physical versions of the electricity bills to be similar in format and information. Interestingly, semi-urban and rural consumers (27%) attach a sentimental value to WMC and desired to retain the same form permanently. Some consumers (35%) felt that the bill should carry information in a bilingual format (Tamil and English) and 60% of the consumers felt that the bill should be reader-friendly and have a comprehensive visual representation.

Based on inputs from consumers, three sample bills were designed, incorporating their preferences and adding more information. The formats have been currently designed in English for wider dissemination of the study. The discom needs to provide a choice for consumers between English or Tamil for gleaning information. Also, both physical and digital copies of the bill need to have a common format.

Two of the designs spread the bill on an A4 sheet, and the third design consists of a combination of a meter card and a supplementary A4 sheet. The third design satisfies the preferences of semi-urban and rural respondents and observation of the discom officials that the meter card is bound to stay in Tamil Nadu at least in the foreseeable future.

In the bill design, additional information preferred by consumers is provided such as the tips for energy conservation, which would enable consumers to use electricity responsibly, and disclosure on discom’s energy mix, which shows the contribution from renewable sources. Two of the formats also include columns for the calculation of net consumption by solar rooftop consumers. These elements have been selectively adopted from innovative bill formats issued by utilities in India and abroad.

The information included in the three designs is mostly the same, but the placement of elements varies between them. Most elements placed on the front side of Design 1 (A4 sheet) are positioned on the flip side of Design 2 (A4 sheet) and vice-versa, taking into consideration a mixed input from consumers on placing certain elements on either side. In Design 3, the elements have been split between the permanent meter card and the supplementary A4- sized printed document. Consumer details, slab-wise applicable tariffs, payment modes, grievance redressal mechanisms, and so on are printed in the meter card as these elements are likely to remain the same for one year. In the supplementary sheet, variable information is captured, such as consumption details, and break-up of bill amount, along with the slab-wise consumption charges, and consumer helpline number which are repeated in the interest of consumers.

Sample design 1 (two-sided A4-sized printed document)

• Front side mainly includes consumer details, consumption details, break-up of total payable bill, consumption slab-wise charges, and consumer helpline number.

• Flip side mainly includes additional charges imposed, consumer grievance redressal mechanisms, various expenses of discom in consumer tariff, energy mix in power procured by the discom, and various payment modes available for consumers.

Sample design 2 (two-sided A4-sized printed document)

• Front side mainly includes consumer details, consumption details, break-up of total payable bill, consumer helpline number, and consumer grievance redressal mechanisms.

• Flip side mainly includes consumption slab-wise charges, additional charges imposed, various expenses of discom in consumer tariff, energy mix in power procured by the discom, and various payment modes available for consumers.

Sample design 3 (Permanent meter card with a supplementary A-4 sized printed document) • Permanent meter card mainly includes:

• Front side with consumer details, consumer helpline number, and various payment modes available for consumers

• Flip side with consumption slab-wise charges, additional charges imposed, and consumer grievance redressal mechanisms

• Supplementary A4 sheet mainly includes:

• Front side: Consumer details, consumption details, break-up of total payable bill, slab-wise consumption charges, and consumer helpline number

• Flip side: Various expenses of discom in consumer tariff, and energy mix in power procured by the discom.

Conclusion and the way forward

Electricity consumers in Tamil Nadu are found to have low awareness regarding the significance of various bill elements and the calculation of various charges primarily due to lack of adequate information provided in the electricity bill. Consumers are unhappy with the two bill formats offered by the discom in Tamil Nadu at present. They prefer a model bill that is easy to access in a physical format, easily comprehensible, has a reader-friendly design, and provides detailed billing information.

Using inputs from select consumers in Tamil Nadu and the provisions that will become relevant in the future, three model bill formats have been designed. The findings from this study apply to other discoms as well. The three model bills are planned to be tested by piloting them with select consumers in the next phase of this study to ascertain their preference among the three formats. Bill formats can be changed only through suitable amendments in the Tamil Nadu Electricity Supply Code. Both the regulator and discom have to approve the new bill formats. The feasibility and cost effectiveness of printing and modes of distribution of these three formats also need to be worked out.

The study can be accessed by clicking here

(The study has been authored Kanika Balani, Pavithra Ramesh, and Prateek Aggarwal)

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