Staying in Touch with Consumers - I -...

Administrative Staff College of India, Hyderabad

Staying in Touch with

Consumers - I

Rajkiran V Bilolikar

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Administrative Staff College of India

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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

[email protected]

Source: ERM

mailto:[email protected]

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