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Administrative Staff College of India, Hyderabad
Staying in Touch with
Consumers - I
Rajkiran V Bilolikar
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Agenda
Regulatory Structure in India for Consumer Protection
Support to electricity regulators for consumer protection by
EA 2003
Consumer Grievance Mechanism
Challenges for ERCs
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Consumer Protection and Regulators
Consumer protection is a primary mandate for infrastructure
regulators.
To fulfil this mandate, regulators must ensure effective consumer
participation in the regulatory process.
Depending on how effectively regulators fulfil their mandate
vis-à-vis consumers, the regulatory process benefits from a
higher degree of consumer involvement
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Ladder of consumer participation in the
regulatory process
Three steps can be identified in consumer engagement
1. Information
2. Consultation
3. Partnership
4. Empowerment
Information is the first step toward legitimate consumer involvement in
the regulatory process.
At this step, emphasis is placed on one-way flows of
communication (from regulators to consumers) with no channel
provided for feedback.
Hence, when consumer participation is limited to information,
consumers have little opportunity to influence the outcome of the
decision-making process
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Consultation
Regulators rely on consultation with consumers and other interest
groups as a valuable source of non-binding advice to inform the
regulatory process.
Consultations can either be conducted on an ad hoc basis on
specific consumer issues or throughout the regulatory
process.
However, if not combined with other modes of consumer
involvement, consultation may not be sufficient to ensure effective
consumer participation, as it offers no assurance that consumer
input will be taken into account in the decision-making process
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Partnership
The third step of the ladder, partnership, involves some degree of
“redistribution” of decision making power as consumers are granted
the right to negotiate with the regulator and the other stakeholders
the outcome of the regulatory process.
Given the diffuse interests of the consumer constituency,
effective partnership with consumers hinges on the
appointment of consumer spokespersons fully accountable to
the consumer constituency
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Empowerment
At this Step of consumer engagement, consumers are empowered
to manage their own infrastructure.
Consumer empowerment works best when infrastructure networks
are small and can be within the control of a single community—for
example, small town water supply systems are often ideal
candidates for local community management.
However, consumer empowerment is generally unfeasible in the
case of large-scale infrastructure, due to the complexity of
managing diffuse consumers groups with conflicting interests
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Role of Electricity Act 2003
The Electricity Act 2003 provides for consumers to play a pro-active
role in protecting their interests in the sector and it provides for
Regulators the platform to support consumers’ role
Section 23 – which inter-alia refers to issue of directions to
licensees for promoting competition
Section 42(6) provides for appointment of an Ombudsman by
the State Commission
Section 57(2) which makes a licensee liable to pay
compensation, for non-compliance with the Standards Of
Performance, to the person affected as may be determined by
the Regulatory Commission
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Role of Electricity Act 2003
Section 64(3) which refers to the procedure for making tariff
order after considering all suggestions and objections received
from the public.
Section 61 regarding the factors which are to be kept in view in
tariff determination. Sub-section(c) thereof refers to
encouragement of competition, efficiency, economical use of
resources, good performance and optimum investments.
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EA 2003 – Role of Regulator
Consumer Participation
Consumer interest
Protection
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Consumer Participation
Under the provisions of the Electricity Act 2003, several ERCs
had issued various notifications
Conduct of Business Regulation
It clearly mentions that all proceedings of the
Commission should be open to the public
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Consumer Interest Protection
Under the provisions of the Electricity Act 2003, several ERCs
had issued various notifications
Standards of Performance
The objective of this document is to facilitate protection of
consumer interest through service standards
Electricity Supply Code
Various procedures adopted by the licensee for billing,
connection, disconnection and restoration of electricity supply
Complaint Redressal Mechanism
The main objective is to ensure more customer satisfaction
and improve service delivery
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Key Elements of consumer protection
in India
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Electricity Act 2003
Section 42 of the Act Provides
Establishment of CGRF by Distribution Licensee
It provides the channel of appeal in the form of ombudsman
It empowers SERC to specify guidelines for
Establishment of CGRF
Appoint the ombudsman
Specify the process of grievance redressal
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Electricity Act 2003
(5) Every distribution licensee shall, within six months from the appointed date or date of grant of licence, whichever is earlier, establish a forum for redressal of grievances of the consumers in accordance with the guidelines as may be specified by the State Commission
(6) Any consumer, who is aggrieved by non-redressal of his grievances under sub-section (5), may make a representation for the redressal of his grievance to an authority to be known as Ombudsman to be appointed or designated by the State Commission
(7) The Ombudsman shall settle the grievance of the consumer within such time and in such manner as may be specified by the State Commission
(8) The provisions of sub-sections (5), (6) and (7) shall be without prejudice to right which the consumer may have apart from the rights conferred upon him by those sub-sections
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The Electricity Rules 2005 (amended)
(1) The distribution licensee shall establish a Forum for Redressal of Grievances of Consumers under sub-section (5) of section 42 which shall consist of officers of the licensee
The Appropriate Commission shall nominate one independent member who is familiar with the consumer affairs.
Provided that the manner of appointment and the qualification and experience of the persons to be appointed as member of the Forum and the procedure of dealing with the grievances of the consumers by the Forum and other similar matters would be as per the guidelines specified by the State Commission.
(2) The Ombudsman to be appointed or designated by the State Commission under sub-section (6) of section 42 of the Act shall be such person as the State Commission may decide from time to time
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The Electricity Rules 2005 (amended)
(3) The Ombudsman shall consider the representations of the consumers consistent with the provisions of the Act, the Rules and Regulations made hereunder or general orders or directions given by the Appropriate Government or the Appropriate Commission in this regard before settling their grievances
(4) (a) The Ombudsman shall prepare a report on a six monthly basis giving details of the nature of the grievances of the consumer dealt by the Ombudsman, the response of the licensees in the redressal of the grievances and the opinion of the Ombudsman on the licensee’s compliance of the standards of
(b) The report under sub-clause (a) above shall be forwarded to the State Commission and the State Government within 45 days after the end of the relevant period of six months
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The National Electricity Policy
Para 5.13 Protection of consumers’ interests and quality
standards
5.13.3.. It is advised that all State Commissions should formulate
the guidelines regarding setting up of grievance redressal forum by
the licensees as also the regulations regarding the ombudsman
and also appoint/designate the ombudsman within six months
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ERC Regulations
The regulations primarily provide
Guidelines for constitution and operationalization of CGRF/
Ombudsman
Grievance submission process to be followed by consumer
Grievance handling and redressal process
Reporting requirements
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Constitution and Operationalization of
Forum
Number, Location and Sittings
Appointment and Removal of Members
Remunerations and Other expenses
Reporting Requirements
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Constitution and Operationalization of
Ombudsman
Qualification, terms of appointment and removal of ombudsman
Office of the Ombudsman
Reporting Requirements
Facts of the representation
Responses of parties in brief
Opinion of Ombudsman on compliance of standards of
performance by the licensee
Key Directions issued to licensee and/ or consumer in the
order
Compliance of order by licensee and/ or consumer
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Grievance Handling and Redressal
Grievance Handling
Handling of grievances by Forum/ Ombudsman
Process for submission of grievance by consumer, along
with the format for submission
Limitations/ pre-conditions on submission of grievance
Process of Grievance Redressal
Investigation Process
Issue of Order
Provision for escalation
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Process at Forum Level
Presence of Grievance Handling Mechanisms preceding the
forum
Classification/ prioritisation of grievances
Process for submission of grievances
Limitations / pre-conditions for submission of grievances
Process of Grievance Redressal
Issue of Order
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Process at Ombudsman Level
Pre-conditions/ Limitations for entertaining Complainant’s
representation
Format for submission of representation
Procedure before Ombudsman
Promotion of settlement by conciliation
Hearing of representations
Issue of Order
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Consumer Advocacy
1. A Consumer Advocacy Cells are instituted by the Commission to provide the required legal advice, support, and assistance to Complainants for representing their case before the Ombudsman
2. Such a Cell shall be funded by the Commission
3. The Cell may also perform additional functions as specified below:
a) Half-yearly review of grievances, representations and reports submitted by the Forum and the Ombudsman in order to advise the Commission on improvements to be made in the Regulations
b) Analysis of reports submitted by the licensee with regards to levels of performance achieved on performance standards specified under Section 57 (Consumer Protection: Standards of performance of licensee) of the Act.
c) Facilitate capacity building of consumer groups and ensure their effective representation for enhancing the efficacy of regulatory processes
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Consumer Advocacy
4. Web Posting of Important Documents
5. Availability of Proposals at multiple places
6. Provision of public hearing at remote areas
7. Oral Presentations by consumers
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What are the gaps?
1. Weak participation in public hearing
2. In adequate written comments on the proposal
3. Lack of consumer representation on State Advisory
Committees
4. Poor Independence of Grievance Redressal Forums
5. No Mechanism to monitor implementation of SoP
6. Lack of awareness
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Role of ERCs
Adoption and implementation of a Communication Strategy
Translation of documents and webpage into the vernacular
language
Creation of a Consumer Welfare Fund
Capacity building seminars to encourage participation
Creation of support for the Office of Consumer Advocate
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Way Forward
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Way Forward
Development
of Indicators;
Road Map for
Social Accountability
& Consumer
Involvement
Execution of survey &
analysis of results;
Data Collection for commencement of survey;
Development of Survey Approach & Methodology
Identification of gaps and improvement areas;
Review of existing policies, regulations and order;
Review of current status of consumer participation in States
Administrative Staff College of India, Hyderabad
Thank You
Rajkiran V. Bilolikar,
Assistant Professor, Energy Area,
Administrative Staff College of India,
Bella Vista, Raj Bhavan Road,
Hyderabad - 500082
T: +91 40 6653 4390
F: +91 40 6653 4356
M: +91 9704087888
Source: ERM