TPCODL Clarifies: Additional Security Deposit is a Statutory Compliance as per Electricity Act, 2003 and OERC, Not Related to Smart Meters

Bhubaneswar: TP Central Odisha Distribution Limited (TPCODL) aims to clarify the recent demand notices regarding the Additional Security Deposit (ASD) issued to certain consumers. This exercise is a mandatory annual statutory compliance governed by the Odisha Electricity Regulatory Commission (OERC) Distribution (Conditions of Supply) Code, 2019. It is entirely unrelated to the installation or operation of Smart Meters.

Statutory Framework and Legal Basis

The collection of the Security Deposit is mandated under Section 47 of the Electricity Act, 2003, which empowers distribution licensees to require reasonable security from consumers for the electricity supplied. Drawing power from provisions of this provision, the OERC framed Regulations 52, 53, 54, and 55 of the OERC Distribution (Conditions of Supply) Code, 2019, which strictly govern this process.

Why is the Demand Note Issued?

As per Regulation 53, the adequacy of the Security Deposit is reviewed annually. This review is based on the consumer’s average consumption during the previous financial year (FY 2024-25).

• For Additional Deposit: If a consumer’s electricity usage has increased, the existing security deposit (calculated for 2 months of billing) falls short. The consumer is required to pay the difference as an Additional Security Deposit (ASD).
• For Refunds: Conversely, consumers whose electricity consumption dropped during FY 24-25 and resulted in a surplus security deposit (exceeding 10% of the required amount) are entitled to a refund of the excess amount via an adjustment to their electricity bills.

Financial Benefits and Safety of Deposits

TPCODL wishes to assure consumers regarding the safety and utilisation of these deposits:

• Interest Payment: Consumers are paid interest on their Security Deposit at the rate of 6.50% per annum, which is comparable to interest rates offered by banks on Fixed Deposits. This interest is adjusted in the consumer’s electricity bill annually.
• Protected Funds: As per OERC directions, the Security Deposit collected is not utilised for TPCODL’s business operations. Instead, it is kept safe in scheduled banks as Fixed Deposits. Interest earned on such Fixed Deposits are passed on to the consumers in ARR.
• Purpose: This deposit acts as a safeguard against payment defaults. If a consumer defaults on bill payments, leading to disconnection, the dues can be adjusted against this Security Deposit.

Penalty for Non-Payment

As per Regulation 55, consumers are required to pay the ASD within the stipulated time. Failure to do so will attract a surcharge of 15% per annum on the unpaid amount. Consumers are requested to pay the ASD promptly to avoid this surcharge.

Clarification on Smart Meters

TPCODL categorically states that this demand for an Additional Security Deposit is a routine, regulatory activity carried out annually based on consumption patterns and prevailing tariff. It has no connection whatsoever to the installation of Smart Meters, their rent, or their functioning.

TPCODL remains committed to transparency and adherence to all regulatory guidelines established by the OERC.