The Hindu : Karnataka News : ‘Power security deposit need not be in the form of cash’

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Friday, Nov 02, 2007
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Karnataka

Karnataka

‘Power security deposit need not be in the form of cash’

Staff Correspondent

It can also be a ‘bank guarantee’, says Grahakara Parishat

KERC has waived security deposits for prepaid meters
It has reduced such deposits equal to two months bill

MYSORE: The Karnataka Electricity Regulatory Commission (KERC) has considered the submission of Mysore Grahakara Parishat that security deposit from power consumers need not be in the form of cash only. The parishat had submitted that consumers can also make security deposit in the form of a “bank guarantee” and that the need for the deposit will be eliminated if electricity supply companies supplied prepaid meters.

“The KERC has allowed deposit in the form of a ‘bank guarantee’ and waived security deposits for those opting for electricity supply through a prepayment meter,” according to the parishat.

Security deposit

Electricity supply companies were collecting a security deposit equal to three months power supply (3MMD) from power consumers before 2004. Acting on a complaint from consumers that the deposit was excessive, the KERC passed an order on May 20, 2004 saying that the companies can collect a deposit from the consumers equal to the cost of two months power supply (2MMD) only.

The companies challenged this order before the Appellate Tribunal which overturned the KERC order on January 23, 2007.

The tribunal, according to G.S. Nayak of the parishat, said, “In view of the practicalities and realities of the situation, the deposit cannot be less than the cost of 72 days’ power supply in case of monthly billing.

“The security amount covering estimated two months power supply bills is not adequate and has to be more than that which shall be determined by the commission for the future.”

Mr. Nayak has in a press release said that KERC again took up the exercise of fixing a fair and equitable quantum of security deposit.

It published a discussion paper proposing to reduce “3MMD” to “2.5 MMD” and asked for public views on the proposal.

In response, the parishat wrote to KERC and argued that the security deposit must be done away with and if it has to be retained, 2MMD was enough.

After receiving feedback from the public and holding a public hearing on the matter, KERC has now come out with the KERC (Security Deposit) Regulations, 2007 which was gazetted on October 11, 2007.

In these regulations, it has reduced the security deposit to 2MMD (for monthly billing) and 3MMD (for bimonthly billing). The commission noted that electricity security deposits were being collected at these rates in Andhra Pradesh, Tamil Nadu and Kerala.

“The reduction in security deposit has been welcomed by all electricity consumers. But the order of KERC seems to go against the orders of the Appellate Tribunal. If the electricity supply companies challenge the latest KERC order, the tribunal may strike it down,” Mr. Nayak noted.

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