Date: May 20, 2023
In response to recent news articles regarding the “Draft Regulations on Metering and Billing” and “Tariff Plan Verification,” the regulatory authority TRAI have issued a clarificatory note emphasizing the importance of accuracy in the metering and billing system. The note also highlights the need for a light touch regulatory approach to ensure fair practices within the industry.
The proposed draft regulations aim to address concerns related to the accuracy of metering devices and the transparency of billing systems. The regulators recognize that metering inaccuracies and billing discrepancies can have a significant impact on consumers’ trust and confidence in utility services. Therefore, the development of robust regulations is seen as crucial in maintaining the integrity of the energy market.
The clarificatory note emphasizes that the draft regulations are designed to strike a balance between ensuring consumer protection and promoting innovation in the energy sector. While accuracy and reliability are paramount, it is also essential to foster an environment that encourages technological advancements and supports the growth of sustainable energy solutions.
The regulatory authorities acknowledge the diverse range of stakeholders, including consumers, utility companies, and technology providers, who have a vested interest in the accuracy of metering and billing systems. To address this, the TRAI note proposes a collaborative approach involving all parties to develop effective regulations that meet the evolving needs of the industry.
Moreover, the note highlights the importance of implementing a light touch regulatory framework. The aim is to strike a balance between oversight and allowing market forces to drive competition and innovation. TRAI recognize that heavy-handed regulations can stifle innovation and impede the development of new technologies that can improve metering accuracy and billing transparency.
TRAI clarificatory note outlines a few key principles that will guide the development of the final regulations. These principles include:
- The proposed Regulations, in fact, reduce the burden of service providers in terms of number of audits being conducted in a year. Instead of auditing each LSA in each quarter, audit is proposed on yearly basis which means each LSA is to be audited only once in a year (reduction of 75 per cent efforts).
- Emphasis has been given to the audit of centralised system rather than reaching to each LSA and duplicating audit of each plan. Now, LSA audit will be subjected to only those plans which are not subjected to the centralised audit.
- Provisions have been made for self-correction of errors by the service providers. If the corrective actions are taken in time by service providers, then no financial disincentives will be imposed. A self-certificate in this regard will meet the audit requirement.
- The audit methodology currently in practice does not represent all segments of pre-paid customers, which contribute almost 95 per cent of the total customer base. Plans selection process has been rationalised to get a proper representation of all types of plans. However, in this case also, total quantum of samples will be similar to earlier quantum.
- Though TRAI acknowledges that most of the plans offered are on unlimited basis, however each plan has got fair usage policy (FUP) limit which determines the quality and quantity of usage of service by the consumers. To have a continued confidence of consumers towards service provider and the regulator, it is essential to continue the audit process.
- Efforts have been made to encourage service providers to refund overcharged amount, if any detected during the audit, to the customers promptly. Accordingly, the impact of financial disincentives has also been rationalised.
- Confidence built up on system accuracy through audit process shall further reduce burden of LSA audit on the Service Providers.
The TRAI clarificatory note on issue related to ‘Tariff plan verification’:
- Examination of tariff offers filed by telecom companies are being done by Authority in a routine manner to ensure compliance of same with extant regulatory provisions.
- Examination of Tariff is in vogue for last many years since inception of TTO in the year 1999.
- There is no special drive being undertaken by TRAI to probe all the past tariff plans filed by telecom companies except those specific plans under examination.
- Any tariff may be subjected to fresh examination as per statutory mandate of the Authority on receipt of complaint of non-compliance to regulatory principles, including allegation of predatory nature of tariff by any stakeholder including TSP(s).
- On receipt of specific complaints of alleged predation by few TSPs, the matter is under examination and appropriate action as per regulatory provisions will be taken.
The clarificatory note concludes by highlighting the regulators’ commitment to providing a conducive regulatory environment that fosters innovation, protects consumer interests, and ensures accurate metering and billing practices. It emphasizes the importance of collaboration and ongoing dialogue with industry stakeholders to develop regulations that strike the right balance between oversight and flexibility.
As the energy sector continues to evolve, the regulatory authorities are dedicated to adapting regulations to keep pace with technological advancements while maintaining a light touch approach that supports industry growth and consumer trust.
