AMI & SMART- METER: A MANDATORY REQUIREMENT

C. P. George
Introduction

A well-functioning electricity infrastructure is essential for the success of a modern economy.

24x7 availability of reliable, quality and affordable power is key to economic development of
the country. Power Sector has witnessed tremendous growth over the past decade in generation,
transmission and universal access to electricity. India is surplus in power generation today. The
continued progress in inter-state and intra-state transmission networks has removed
transmission bottlenecks and created sufficient transmission capacity to transmit electricity
generated from one region to another.

In the Distribution Sector, Government of India has been assisting the States / distribution
Companies (DISCOMs) through various schemes. The Distribution system has been
strengthened as a result of the implementation of these schemes and India has achieved near
universal electricity access by connecting more than 90% of the total 302 million households
with the National Electricity Grid. Implementation of these schemes has also resulted in
improved access to electricity.

Despite the above measures, consumers do not get reliable 24x7 electricity in many parts of
the country. Aggregate Technical and Commercial (AT&C) losses and the Average Cost of
Supply-Average Revenue Realized (ACS - ARR) gap continue to be high. This sub-optimal
performance of the Distribution Sector is identified as due to structural and management
deficiencies and some remaining weaknesses in the infrastructure. The DISCOMs need to focus
on improving their operational efficiencies & financial sustainability; and improve consumer
services to be able to meet the desired consumer service standards.

The above requires large scale reforms in the Distribution Sector and focused schemes that are
designed based on real time data that would enable the DISCOMs to reduce losses to make
them financially sustainable and operationally efficient.

The penetration of intermittent renewables, such as wind and solar power, in the grid increases
the difficulty of monitoring and balancing the grid as the amount of power being produced
fluctuates. Today, that balancing is done through centralized controls from grid operators. The
goal of grid balancing is to keep voltage up and maintain the frequency of the alternating
current at 50 hertz. When the supply of energy from a renewable source slump, the fossil fuel
plants typically provide the additional power needed for rebalancing. An alternative approach
to dealing with renewable slumps is so-called demand response, where consumers are given
financial incentives to turn equipment down, or off, when the power ancillary supply services
is limited, or the grid needs balancing. Such an approach is required for optimal performance
and economic load dispatch through the network which warrants the design of a Smart grid.
Smart Meter & AMI is the first step and requirement in the road map towards a smart grid. It
is an essential foundation towards the sustainable energy security goals of the country.

1
Accordingly, Government of Inda has made the installation of Smart Meter -AMI as mandatory
requirements for every utility for the transaction and sale of electricity.

AMI-Smart meter Project & RDSS

It is with this aim and with the Government of India’s commitment for providing 24x7
uninterrupted, quality, reliable and affordable power supply, that the Revamped Reforms Based
and Results Linked Distribution Sector Scheme (RDSS) has been formulated by Ministry of
Power for supporting DISCOMs to undertake reforms and improve performance in a time
bound manner. The Scheme is meant for facilitating in installing prepaid smart meters for all
consumers along with associated Advanced Metering Infrastructure (AMI), communicable
meters for Distribution Transformers (DTs) & Feeders, Inter-Connecting Transformers (ICT
including Artificial Intelligence (AI), Machine Learning (ML), etc. based solutions for power
Sector and a unified billing and collection system.

As per para 2.3.1of RDSS guideline, the Prepaid Smart metering for consumers, and System
metering at Feeder and Distribution Transformer level with communicating feature along with
associated Advanced Metering Infrastructure (AMI) will be done in TOTEX mode through PPP,
to facilitate reduction of Distribution losses and enable automatic measurement of energy flows
and energy accounting as well as auditing. As per para 2.3.2, Government of India funding
under this Part will be available only if the DISCOM agrees to the operation of smart meters
in prepayment mode for consumers, and in accordance with the uniform approach indicated
by the Central Government, with implementation in TOTEX mode.
As per para 4.7.2 of the guideline issued by GoI for RDSS scheme, the sunset date for the
scheme will be 31.03.2026 and the works executed beyond which will not be eligible for release
of Central Government grant. As per para 4.7.3, as the sunset date of the scheme is already
defined and disbursement of grant is based on progress and corresponding achievement of
targets, it is in the interest of the DISCOMs to complete the projects expeditiously to avail the
benefits under the Scheme.

But it is observed that KSEBL, KSERC & Government of Kerala is not considering the
implementation of AMI & Smart-meter project in TOTEX mode as per the guideline issued by
Government of India and is not serious about the timely execution of the AMI & Smart-meter
project which is to be completed mandatorily in tune with the timeline specified by
Government of India.

As stated in the previous paragraph, delay in execution of the RDSS scheme can results in the
loss of Government Budgetary Support (GBS) up to Rs 2567/- crore for the state based on data
in the project report approved by Monitoring Committee of RDSS vide proceedings dated
23/03/2022 issued by Ministry of Power, Government of India.
National Grid and requirement of coordinated planning for optimal performance

In India, coordinated planning and development in National Electricity Grid is a mandatory

requirement to ensure optimal operation of the network with optimum utilization of resources.

2
Hence, we have the National Electricity Plan prepared by the Central Electricity Authority as
stipulated in sub-section (4) of Section 3 of the Electricity Act and it is in accordance with the
National Electricity Policy. The present plan covers review for the period 2017-22 in detail and
detailed plan for the period 2022-27 and perspective plan for the period 2027-32. The Central
and State Governments and the electricity utilities are supposed to devise detailed programs to
ensure timely implementation of the plan document for optimal performance and sustainable
development of the sector.

The Capital Investment Plan of KSEBL for the period from FY2022-23 to FY2026-27 which
is supposed to be the detailed execution programs for the period to achieve the targets fixed in
the National Electricity Plan is supposed to be heard and approved by KSERC before the
commencement of the plan period. But it was delayed for reasons unknown. The document
submitted as early as 2022 was later modified with additional submissions and deviations. The
Capital Investment plan document submitted by KSEBL for the Distribution SBU (Strategic
Business Unit) was discussed during the public hearing dated 19/11/2024 conducted by
Honorable KSERC. On detailed evaluation of the plan document submitted by KSEBL, it is
observed that the utility did not plan and envisage to complete the AMI & Smart Meter scheme
within the time limit specified as per the requirements in the statutory documents like the
Metering regulations issued by CEA or energy accounting and auditing regulations for
distribution companies issued by BEE. It is observed that KSEBL as a distribution utility is
not bothered about the provisions in the tariff policy or the national electricity plan documents
or the directives issued by Government of Inda in complying the time limit specified nor took
any serious efforts to complete it in the near future.

As per para 2.3.3 & 2.3.4 of Capital Investment Plan submitted by KSEBL, the meeting
convened by Hon’ble Chief Minister of Kerala on 25.08.2023, KSEBL has been directed to
take necessary action for developing an alternate proposal for smart meter implementation
other than TOTEX mode. Accordingly, it was decided to implement smart meters for feeder &
border meters (about 4,200), distribution transformer meters (about 87,200), Government
consumers (about 1,65,000) and HT consumers (about 7,500) in the first phase for a total of
around 3 lakhs smart meters. It was also decided to implement the first phase in three packages
(package-1: Supply of Smart Meters with Communication Infrastructure and Head End System
and package-2: Supply and implementation of MDMS). It is stated that alternate mode of
implementation shall not be in TOTEX mode. The estimated cost for implementation for phase-
1 smart meter is Rs.277 crores (as per the budgetary offer received from OEMs) and is proposed
to be funded by KSEBL in CAPEX mode. Again, the financing source of the scheme is yet to
be finalized. Implementation of smart meters for approximately 17 lakh consumers (all
category consumers included) of 6 high revenue electrical divisions is proposed in the 2nd and
3rd phase. As such, the CIP envisages the installation of only 19,50,000 out of 1,37,00,000
smart meter envisaged to complete by 27-28, whereas the time limit as per RDSS scheme for
installation of smart meters for the entire electricity consumer in Kerala is 31/03/2026. As such,
it is observed that the project is not even planned, designed and programmed for completion
within the time frame fixed by the statutory requirements, mandatory planning document issued
by Central Electricity Authority and the policy guidelines issued by Government of India.

3
Statutory Requirements and Time limit for implementation of AMI & Smart
Meter Project.
1. Mandatory Requirement as per Electricity Act read with CEA (Installation and
Operation of Meters) Regulations, 2006 amended and updated.

As per subsection (1) of Section 55 of Electricity Act 2003, “No licensee shall supply
electricity, after the expiry of two years from the appointed date, except through
installation of a correct meter in accordance with the regulations to be made in this
behalf by the Authority.”
As per sub-regulation(k)of regulation 2 CEA (Installation and Operation of Meters)
Regulations, 2006 (Amended 2019), ‘Correct Meter’ means a meter, complying the
standards as specified in the Schedule to these regulations;”.
And as per Sub-regulation (ta) of regulation 2 (amended 2019), ‘Smart Meter’ means a
meter as specified in IS 16444 and as amended from time to time;”

As per sub- regulation (1) of regulation 4 CEA (Installation and Operation of Meters)
Regulations, 2006 (Amended 2019):

(a) all new Interface Meters and Energy Accounting and Audit Meters shall be of static
type and shall have an automatic remote meter reading facility.

(b) all new Consumer Meters shall be Smart Meters with prepayment feature.

Provided that the existing meters, other than Smart Meters, shall be replaced with Smart
Meters with prepayment feature within a time frame as specified by the Central
Government.”.

As such, the “correct meter” stated in Section 55 of Electricity Act 2003 has been specified as
“smart meter” by the Central Electricity Authority. Deliberately delaying the installation of the
smart meters and noncompliance of the time frame specified by Central Government for
installation of the smart meters shall constitute violation of the Electricity Act. But it is
observed that the capital investment plan of KSEBL filed before the KSERC for the period
2022-27 does not contain any program for timely installation of smart meters in their area of
supply.

As per sub-regulation (2) of regulation 14 for Consumers Meters, in CEA (Installation and
Operation of Meters) Regulations, 2006 (Amended 2019) it is stated that

“(a) It shall be the responsibility of the licensee to download the Meter data either locally or
remotely, record the metered data, maintain database of all the information associated with
the Consumer Meters and verify the correctness of the metered data:

Provided that the Appropriate Regulatory Commission shall specify suitable time frame for
ensuring electronic meter reading of all consumer meters by the licensees.

4
(b) The licensee shall maintain accounts for the electricity consumption and other electrical
quantities of its consumers:

Provided that the licensee shall provide information to the consumer related to his energy
consumption through Mobile App or Web application or in home display or any other suitable
means.”

It may be pointed out that this mandatory requirement specified in the metering regulation is
feasible only with the implementation of AMI & smart meter project and the distribution
licensee must take appropriate steps to ensure timely execution of the project as specified by
the Central Government timeline. But no such plan is envisaged in the capital investment plan
submitted by the distribution utility KSEBL.

As per sub-regulation (da) of regulation 2, of CEA (Installation and Operation of Meters)

Regulations, 2006 (Amended 2022) “‘Advanced Metering Infrastructure’ is an integrated
system of smart meters, communication networks and data management systems that enables
two-way communication between the utilities and energy meters, and the functional blocks of
Advanced Metering Infrastructure typically include Head end system, Wide area network,
Neighborhood area network, Data concentrator unit and Home area network; and as per sub
regulation (db) of regulation 2, “ ‘Advanced Metering Infrastructure Service Provider’ is a
person appointed by the distribution licensee, for owning, operating, and maintaining
Advanced Metering Infrastructure or a part of the Advanced Metering Infrastructure, till its
transfer to the licensee;”.

As per sub-regulation 1(b) of regulation 4 of CEA (Installation and Operation of Meters)

Regulations, 2006 (Amended 2022) “All consumers in areas with communication network,
shall be supplied electricity with Smart Meters working in prepayment mode, conforming to
relevant IS, within the timelines as specified by the Central Government:

Provided further that in areas which do not have communication network, installation of
prepayment meters, conforming to relevant IS, shall be allowed by the respective State
Electricity Regulatory Commission”
As per sub-regulation 2(a) of regulation 6 of CEA (Installation and Operation of Meters)
Regulations, 2006 (Amended 2022), “Consumer meters shall generally be owned by the
licensee:

Provided that in case the licensee has engaged the services of Advanced Metering
Infrastructure Service Provider to provide Advanced Metering Infrastructure services for an
Advanced Metering Infrastructure project area, the ownership of meters shall remain with
Advanced Metering Infrastructure Service Provider during the contract period”.

As per regulation 7 of CEA (Installation and Operation of Meters) Regulations, 2006 (Amended
2022), “all feeders and distribution transformers shall be provided with meters having
automatic remote meter reading facility or Smart Meters as per relevant IS, as per the timelines
specified by the Central Government:

5
 Provided further that distribution transformer level energy accounting data shall be uploaded
by the distribution licensees on quarterly basis on National Power Portal as per the format
prescribed in Bureau of Energy Efficiency (Manner and Intervals for Conduct of Energy Audit
in electricity distribution companies) Regulations, 2021”.

It may be pointed out that this mandatory requirement specified in the metering regulation is
feasible only with the implementation of AMI & smart meter project and the distribution
licensee must take appropriate steps to ensure timely execution of the project as specified by
the Central Government timeline. But no such plan is envisaged in the capital investment plan
submitted by the distribution utility KSEBL

2. Mandatory Requirement for Smart Meters as per Bureau of Energy Efficiency (Manner
and Intervals for Conduct of Energy Audit in electricity distribution companies)
Regulations, 2021 under Energy Conservation Act, 2001.
In regulation 5. Pre-requisites for annual energy audit and periodic energy accounting, it is
directed to undertake all actions as may be required for the annual energy audit and periodic
energy accounting which includes,

5(c) the development and implementation of information technology enabled energy

accounting and audit system, including associated software.

(d) the electricity distribution company shall ensure the installation of functional meters for all
consumers, transformers and feeders:

Provided that the meter installation may be done in a phased manner within a period of three
financial years from the date of the commencement of these regulations in accordance with the
trajectory set out in the First Schedule.

(e) all distribution transformers (other than high voltage distribution system up to 25kVA and
other distribution system below 25 kVA) shall be metered with communicable meters. And
existing noncommunicable distribution transformer meters shall be replaced with
communicable meters and integrated with advanced metering infrastructure.
(f) the electricity distribution company shall establish an information technology enabled
system to create energy accounting reports without any manual interference:

Provided that such system may be established (i) within a period of three years from the date
of the commencement of these regulations in case of urban and priority area consumers; and

(ii) within five years from the date of the commencement of these regulations in the case of
rural consumers.

The manner of annual energy audit and periodic energy accounting is specified in regulation 7.

The Trajectory for Meter Installation has been set out in the first schedule of the regulation and
accordingly the timeline for metering has been given as follows

(i) 100% Communicable Feeder Metering integrated with AMI, by 31st December 2022 along-
with replacement of existing non-communicable feeder meters.

6
(ii) All Distribution Transformers (other than HVDS DT upto 25kVA and other DTs below 25
kVA) shall be metered with communicable meters.

Communicable DT Metering for the following areas / consumers to be completed by December

2023 and in balance areas by December 2025.

 All Electricity Divisions of 500 AMRUT cities, with AT&C Losses > 15% ;
 All Union Territories (for areas with technical difficulty, non-communicable meters may
be installed).
 All Industrial and Commercial consumers.
 All Government offices at Block level and above.
 Other high loss areas i.e. rural areas with losses of more than 25% and urban areas
with losses more than 15%.

Further, existing non-communicable Distribution Transformer meters to be replaced with

communicable meters integrated with AMI, within the timelines applicable to the respective
areas.

(iii) Prepaid Smart Consumer Metering to be completed for all directly connected meters and
AMR in case of other meters, by December 2023 in the following areas:

 All Electricity Divisions of 500 AMRUT cities, with AT&C Losses > 15%;
 All Union Territories (for areas with technical difficulty, prepaid meters to be installed);
o All Industrial and Commercial consumers.
 All Government offices at Block level and above.
 Other high loss areas i.e. rural areas with losses of more than 25% and urban areas
with losses of more than 15%.

The balance areas and consumers may be taken up in a phased manner subsequently. However,
Distribution Companies can additionally cover any other areas as well as agricultural
consumers, at their option by December 2023. Further, in rural / hilly areas with connectivity
or communication issues, wherein installation of smart meters may not be feasible, prepaid
meters may be opted for.

(iv) Consumer Metering:

 98% by FY 2022-23
 99% by FY 2023-24
It is observed that KSEBL has done nothing to comply with the mandatory timeline
requirements specified in the regulations and not even submitted a program to comply the
regulation in their capital investment plan file before the Honorable KSERC for the period
2022-27. During the public hearing conducted by Honorable KSERC on 19/11/2024, it is noted
that even KSERC is not serious about the noncompliance of the BEE regulation under EC Act,
2001 by KSEBL and failed advise /direct the distribution licensee KSEBL for appropriate
revision of the capital investment plan to ensure compliance of the provisions in BEE
regulation for energy audit.

7
3. Mandatory Requirement for Smart Meters as per Rule 5 of Electricity (Rights of
Consumers) Rules, 2020 issued by Government of India notified 31/12/2020
As per Rule 5. Metering – (1) No connection shall be given without a meter and such meter
shall be the smart pre-payment meter or pre-payment meter. Any exception to the smart meter
or prepayment meter shall have to be duly approved by the commission. The Commission, while
doing so, shall record proper justification for allowing the deviation from installation of the
smart pre-payment meter or pre-payment meter.

As per Rule sub-rule (5) of Rule 5, “ All types of smart meters shall be read remotely at least
once in a day and the other pre-payment meters shall be read by an authorised representative
of the distribution licensee at least once in every three months and the data regarding energy
consumption shall be made available to the consumer, through website or mobile application
or Short Message Service and the like, provided that the consumers having smart pre-payment
meters shall also be given the data access for checking their consumption and balance amount
at least on daily basis.

It is noted that KSEBL as a distribution utility is not serious about this provision in the rule and
has not taken any action to comply with the rule as specified. The right of the consumer to avail
the facilities and convenience specified in the regulation is feasible only with the
implementation of AMI & smart meter project rolled out by government of India. But KSEBL
have not devised any program to implement the same in near future and their capital investment
plan for the period 2022-27 envisaged the implementation of the 19 lakh smart meters by 2028
against 1.4 core consumers in their area of supply. Honorable KSERC also failed to guide them
as per the mandatory requirement specified in the rules and regulations.

4. Timeline for Smart meter implementation under Government of India Directives.

a. Smart Meter Under GoI program IPDS, Funding under National Smart Mission and
under business model with EESL
GoI Direction Dtd: 2018-08-16.
Government of India has sanctioned funds to the tune of Rs. 830 Crores for Smart metering
under IPDS. Funding has also been done for Smart meters under the National smart Grid
mission under Smart grid projects. Besides this, several States have also started projects of
Smart metering under business models with EESL as well as under multilateral funding.
States were advised to consider switching over to Smart meters in prepaid mode/simple
prepaid meters over a period of next three years, say by March 2021. They were requested
to submit a roadmap for the same MoP at the earliest.
GoI Direction Dtd: 2019-08-02
Requested the States to submit their roadmaps for smart prepaid metering of all consumers
as well as on the progress of Smart metering projects already undertaken/in process. Further
reiterated that States/Discoms must switchover to smart meters in the prepaid mode and
implementation may be completed within three years
b. Smart Meters: Requesting Road Map for shifting over to smart prepaid meters within
the next three years
GoI Direction Dtd: 2020-08-07

8
 Accordingly, the major reasons for high AT&C losses include non-billing, wrong billing,
thefts, non-collection of the billed energy etc. and all these reasons have an underlying
factor, i.e a human interface. Prepaid metering will allow Utilities to address these issues
by replacing human interface by technology. It will also enable consumers to use electricity
as per their own requirements and budgets. In areas where prepaid metering has been
introduced the AT&C losses have gone down sharply. In Manipur, the losses have come
down from 47 percent to 15 percent. Hence in the interest of Utilities, it was advised to
shift to prepaid smart metering at the earliest. As per the letter, Prepaid smart metering
would have some added advantages such as remote tariff updates, real time energy audits
and TOD tariff. The essential requirement is to shift to prepaid to do away with manual
interface and reduce transaction costs. It is requested that the shift to the prepaid system
may be taken up and progressed phase wise. Hence it is requested that this Ministry may
be kept apprised of the action taken.

c. Implementing Smart Prepayment Meter

GoI direction dated 26/02/2021
Accordingly, all the States must have taken steps and prepared a road map for shifting over
to smart pre-payment meters/pre-payment meters. As per the letter, some of the states have
already started implementation of pre-payment meters at the consumer levels. Based on the
feedback from the States who have implemented the prepayment meters, the following
benefits are envisaged: -
i. The working capital requirement will reduce.
ii. DISCOMs will be able to purchase comparatively cheaper electricity from power
exchange which due to financial constraint they are not able to purchase.
iii. The burden of late payment surcharge which is as high as 18% at present will also
become zero. The late payment surcharge is quite substantial in some of the states:
iv. DISCOMs will be able to improve the infrastructure and provide 24x7 reliable power
to all its consumers.
v. DISCOMs will be able to pay in advance to GENCOS, Transmission companies,
trading companies thereby taking a rebate of around 1.5% to 2% on the power purchase
cost;
vi. Once generating companies and transmission companies get payment in time or in
advance, their working capital requirement will also reduce and to this extent, the tariff
will also come down.
vii. Cost saving as there would not be any requirement of serving a physical bill: - This will
do away with irregular billing, particularly, in the rural area where the meters are not
read periodically, and bills are served either quarterly or half-yearly or even sometimes
annually. This has led to cumulative dues which the rural consumers find it difficult to
timely pay to the DISCOMs and the amount is compounded with late payment
surcharge. With pre-payment meters, consumers can pay as per the convenience and in
smaller denominations as per his payment capacity

As per Section 55 of Electricity Act, CEA Metering regulations and The Electricity (right of
the consumer) rule 2020, the Discoms are required to implement the shifting over to smart pre-

9
 payment meters. According to GoI letter, no specific approval is required from State
Commission in this regard.

Hence, the States are once again requested to timely prepare the scheme of switching over to
smart pre-payment meters/pre-payment meters in a time bound manner to avail funds from the
Government of India under the above Scheme. States are requested to submit their plans to this
Ministry within 2 months from the date of issue of this letter.

Further, the letter says, following stipulations may be indicated in the scheme to be proposed
by the States: --

No connection shall be given without a meter and such meter shall be the smart prepayment
meter or prepayment meter.

Any faulty meter shall be replaced only by smart prepayment meter or prepayment meter. The
existing post-paid meters should be replaced within 3 years.

d. Timeline Notification by Central Government for Implementing AMI & Smart Metering
system.

GoI Notification by MoP dated 17/08/2021

The notification is in pursuance to the provisions made in clause 4(1) (b) of the Central
Electricity Authority (Installation and Operation of Meters) (Amendment) Regulations, 2019
framed under sub-section (1) of section 55 read with clause(c) of sub-section (2) of section 177
of the Electricity Act, 2003. Accordingly, the Central Government notifies the following
timelines for the replacement of existing meters with smart meters with prepayment feature.

1. All consumers (other than agricultural consumers) in areas with communication network,
shall be supplied electricity with Smart Meters working in prepayment mode, conforming to
relevant IS, within the timelines specified below:

(i) All Union Territories, electrical divisions having more than 50% consumers in urban areas
with AT&C losses more than 15% in financial year 2019-20, other electrical divisions with
AT&C losses more than 25% in financial year 2019-20, all Government offices at Block level
and above, and all industrial and commercial consumers, shall be metered with smart meters
with prepayment mode by December 2023:

Provided that the State Regulatory Commission may, by notification, extend the said period of
implementation, giving reasons to do so, only twice but not more than six months at a time, for
a class or classes of consumers or for such areas as may be specified in that notification.
(ii) All other areas shall be metered with smart meters with prepayment mode by March 2025:

Provided that in areas which do not have communication network, installation of prepayment
meters, conforming to relevant IS, may be allowed by the respective State Electricity
Regulatory Commission:

(iii) All consumer connections having current carrying capacity beyond that specified in
relevant IS, may be provided with meters with smart meters having AMR facility.

10
2. All feeders and distribution transformers (DTs) shall be provided with meters having AMR
facility or covered under AMI, as per the timelines specified below:

(i) All feeders shall be metered by December 2022.

(ii) All DTs in electrical divisions having more than 50% consumers in urban areas with AT&C
losses more than 15% in financial year 2019-20, and in all other electrical divisions with AT&C
losses more than 25% in financial year 2019-20, shall be metered by December, 2023.

(iii) All DTs in areas other than those mentioned in (ii) above, shall be metered by March 2025.

(iv) DTs and HVDS transformers having capacity less than 25 kVA may be excluded from the
above timelines.

3. This notification shall be effective from the date of publishing in the Gazette of India.

Role & Responsibility of KSERC in ensuring the implementation of AMI & Smart Meter
Project in Kerala.

As per Section 86 (Functions of the State Commission), KSERC is duty bound to facilitate
activities in the state electricity sector that brings efficiency and economy in the operation of
the electricity network in the state. They are supposed to ensure appropriate control over the
licensee in functions that ensure delivering their responsibilities. They are supposed to specify
or enforce standards with respect to quality, continuity and reliability of service by licensees.

As per Section 86(4) of Electricity Act 2003: “In discharge of its functions, the State
Commission shall be guided by the National Electricity Policy, National Electricity Plan and
tariff policy published under section 3”

National Electricity Plan & Smart Metering

And we have National Electricity Plan prepared and issued by CEA for every 5-year period
and the current plan is for 2022-27, the same period for which KSEBL has prepared and filed
the capital investment plan. As per the plan document, the plan is as per the stipulation of
sub-section (4) of Section 3 of the Act, in accordance with the National Electricity Policy,
covering review for the period 2017-22 in detail and detailed plan for the period 2022-27 and
perspective plan for the period 2027-32. The KSEBL capital investment plan is supposed to be
prepared in tune with this National Electricity Plan to ensure coordinated development and
operation of national grid with optimal efficiency and economy in tune with the trends in the
sector and to ensure delivery of quality electricity to the consumers with reliability and safety
at affordable rate.

On going through previous plans and the current plan for the period 2022-27, it is noted that
AMI & Smart metering has given top priority and timely implementation of AMI and smart
metering project is essential for the sustainable operation and development of energy sector
and the national grid.

11
The National Electricity Plan is meant for capital investment and execution of projects for a
specific period and meant for the coordinated development of the national grid based on the
power sector requirements. Same cannot be allowed to be delayed as per the whims and fancies
of misplaced thoughts and lack of competency of some individuals in key position appointed
based on vested interests. But it is observed that KSEBL has not incorporated enough programs
in tune with the National Electricity Plan in their capital investment plan filed before KSERC
for the period 2022-27. Lack of such programs to ensure timely implementation GoI sponsored
projects, particularly for the implementation of AMI & Smart Metering shall adversely affect
the consumers and sustainability of the electricity sector in the state. Again, it is noted that
KSERC has failed to take serious note of the shortcoming in the documents submitted by
KSEBL which shall affect the availability and access of electricity to the consumers in the state.

Tariff Policy, 2016 & Smart Metering

As per para 8.3.5 Tariff policy “Metering of supply to agricultural/rural consumers can be
achieved in a consumer-friendly way and in effective manner by management of local
distribution in rural areas through commercial arrangement with franchisees with involvement
of panchayat institutions, user associations, cooperative societies etc. Use of smart meters may
be encouraged as a cost-effective option for metering in cases of “limited use consumers” who
are eligible for subsidized electricity.”

As per para 8.4.3. of Tariff Policy, “Appropriate Commission may provide incentives to
encourage metering and billing based on metered tariffs, particularly for consumer categories
that are presently unmetered to a large extent. The metered tariffs and the incentives should be
given wide publicity. Smart meters have the advantages of remote metering and billing,
implementation of peak and off-peak tariff and demand side management through demand
response. These would become essential in future for load-generation balancing due to
increasing penetration of intermittent type of generation like wind and solar power.”

“Appropriate Commission shall, therefore, mandate smart meters for:

(a) Consumers with monthly consumption of 500 units and more at the earliest but not later
than 31.12.2017.

(b) Consumers with monthly consumption above 200 units by 31.12.2019.

Further, two-way smart meters shall be provided to all prosumers, who also sell back electricity
to the grid as and when they require.
In order to enable energy audit in the distribution system, all distribution companies shall
ensure smart meters in their electricity system throughout the chain from transformers at 132kV
level right down to distribution transformer level at 11kV and further down to each consumer.

Further, in order to reduce theft of power, the distribution companies should have enabling
feature like distribution SCADA with distribution management system and energy audit
functions. SERCs shall mandate these to be in place within two years.”

12
Conclusion
If KSEB & KSERC are not directed and guided by these provisions in the relevant regulations,
National Electricity Policy, National Electricity Plan, Tariff Policy, and the directives from the
Central Government, their competency integrity and their intentions in managing the sector is
doubtful.

KSEBL as an electricity utility is supposed to comply with appropriate regulations under

electricity act, energy conservation act and the directives from Government of India. They must
be guided by policy documents and national electricity plan and devise appropriate programs
in consultation with GoK to ensure the timely implementation National Electricity Plan as
envisaged.

Based on the media reports and the remarks and comments heard from the Honourable KSERC
during the public hearing on 19/11/2022, It is observed that instead of being guided by these
mandatory provisions, KSERC has misguided by themselves and taken directly opposite views
against some provisions in National Electricity Plan and Tariff Policy. They are not bothered
about the creation of an environment in the state that violates the provisions in electricity act
by noncompliance in CEA Metering regulations and violates of EC Act, 2001 by non-
compliance of the regulation issued by BEE for Energy Accounting and Audit for distribution
companies. On reading some media reports and evaluating some comments heard during the
public hearing on 19/11/2024, it is observed that they have misguided the public through their
skewed vision or lack depth over the AMI & Smart Meter Project..

As per Section 86(4) of Electricity Act 2003: In discharge of its functions, the State
Commission shall be guided by the National Electricity Policy, National Electricity Plan and
tariff policy published under section 3. It is observed that KSERC is not guided the provision
under Section 86(4) of the Electricity Act which mandate action in tune with National
Electricity Policy, National Electricity Plan and Tariff policy, but guided by their skewed vision
out of incompetency (?) and lack of understanding in power sector requirements (?).

In the end the stake holders including the consumers and the people in Kerala are going to
suffer extensively due to lack of availability and access of electricity with quality, reliability
and safety at affordable price.

13