Staying in Touch with Consumers - I

1. Staying in Touch with Consumers - I Rajkiran V Bilolikar

2. Agenda • Regulatory Structure in India for Consumer Protection • Support to electricity regulators for consumer protection by EA 2003 • Consumer Grievance Mechanism • Challenges for ERCs

3. 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

4. Ladder of consumer participation in the regulatory process • Three steps can be identified in consumer engagement • Information • Consultation • Partnership • 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

5. 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

6. 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

7. 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

8. 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

9. 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.

10. EA 2003 – Role of Regulator

11. 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

12. 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

13. Key Elements of consumer protection in India

14. 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

15. 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

16. 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

17. 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

18. 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

19. 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

20. Constitution and Operationalization of Forum • Number, Location and Sittings • Appointment and Removal of Members • Remunerations and Other expenses • Reporting Requirements

21. 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

22. 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

23. 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

24. 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

25. 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

26. Consumer Advocacy • Web Posting of Important Documents • Availability of Proposals at multiple places • Provision of public hearing at remote areas • Oral Presentations by consumers

27. What are the gaps? • Weak participation in public hearing • In adequate written comments on the proposal • Lack of consumer representation on State Advisory Committees • Poor Independence of Grievance Redressal Forums • No Mechanism to monitor implementation of SoP • Lack of awareness

28. 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

29. Way Forward

30. Way Forward

31. Thank YouRajkiran V. Bilolikar,Assistant Professor, Energy Area,Administrative Staff College of India, Bella Vista, Raj Bhavan Road, Hyderabad - 500082T: +91 40 6653 4390F: +91 40 6653 4356M: +91 9704087888rajkiran@asci.org.in Source: ERM