We must exercise caution not to trip over smart meters

Smart metering of electricity consumption is one key measure being adopted by India to alleviate the financial distress of electricity distribution companies (discoms). This idea gathered steam after the finance minister announced in the Union budget speech for 2020-21 that all conventional consumer meters would be replaced by smart meters by 2022.

A scheme worth ₹3.05 trillion was unveiled in the budget for 2021-22 that focuses closely on smart metering. So far, over 1.9 million smart meters have been installed, primarily under the Smart Meter National Programme (SMNP), steered by the state-owned Energy Efficiency Services Ltd (EESL). A recent media article, however, reported a proposal to extend the deadline to 2023 and reduce the scale of the programme.

Smart meters, through automatic bill generation and remote disconnection, are expected to significantly improve metering and billing efficiencies, and in turn, increase discom revenues. The revenue gaps of discoms have been increasing, exacerbated by the pandemic, even as their dues to power generators have been piling up, now estimated at around ₹70,000 crore.

To address the predicament of discoms, significant further investment in smart meters is being proposed by the Centre, with a large-scale roll-out justified on expectations of a vast improvement in payment collection efficiency.

However, a need-based assessment, especially of small consumers, is crucial before state electricity regulatory commissions (SERCs) approve state-wise roll-outs.