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The next frontier in electricity governance

The future of electricity governance will be shaped by three distinct factors - increased pace of technological innovation, policy adaptation to innovation, and regulatory reforms. Rooftop solar, smart meters, time-of-day tariffs, energy storage, and electric vehicles are transforming the electricity sphere. This has led to consumers being no longer passive recipients of electricity but becoming  active participants, empowering them  to further improve their experience in the sector. 

For decades  now, CAG has been at the forefront of enabling consumers, particularly within the electricity sector through its pioneering initiatives such as Electricity Consumer Cells (ECCs) which functioned across 5 districts in Tamil Nadu. These efforts have helped resolve over 3000 consumer complaints on electricity issues, promoted renewable energy, conducted media workshops, and reached out to over one lakh electricity consumers. There is no doubt that the path ahead still needs the participation of organisations such as CAG - ensuring that  consumers remain central to any  transformation. Our work will seek to inform them of their rights, protect their interests, and amplify their voices in governance processes. As technology upends the world as we understand it, it becomes all the more important to ensure that the consumer is not the forgotten party, or consumer protection sacrificed at the altar of progress. 

Prosumers: The recognition of prosumers under the Electricity (Rights of Consumers) Rules, 2020 is an important step in consumer empowerment. A solar prosumer is an individual or entity that both consumes and produces electricity, typically through rooftop solar panels. Apart from this, the subsequent Amendment to the Rules further  simplified rooftop solar adoption, by waiving feasibility studies for systems up to 10 kW and setting strict timelines for approvals. This has reduced barriers for households wishing to generate their own electricity, thereby building the number of prosumers with stakes in electricity generation (not just consumption). CAG will continue to build awareness of prosumer rights by advocating for rightful compensation on surplus energy sent to the grid. Further, CAG will seek to support experiments such as microgrids, which show how decentralised energy can be managed fairly and effectively.

Smart Meters: India added around 35 million smart meters by mid - 2025 through the Revamped Distribution Sector Scheme (RDSS). Smart meters provide granular data, enable prepaid billing, and can reduce disputes. These devices eliminate manual meter readings and provide consumers with detailed information about usage and balances. Yet consumer experience varies as in some states meters deliver savings, while in others communication functions or prepaid modes are limited. CAG will work to ensure that consumers are equipped to use smart meter platforms. This will be done by promoting “digital” literacy where consumers are able to read and understand their smart meters. Further, CAG will build on our existing work of Electricity Consumer Cells to resolve consumer grievances and advocate for transparent billing.

Time-of-Day Tariffs: Time-of-Day (ToD) tariffs are being implemented in phases across consumer categories, except agriculture. ToD tariff works as follows: consumers are given cheaper rates during solar hours while being charged a higher tariff during evening when activity peaks. The purpose is two fold: a) to encourage uptake of energy battery usage and b) to push consumers to shift their electricity usage to a non-peak hour for better demand and grid management by the DISCOM. Evidence shows that consumers who shift their usage patterns are saving between 15 and 25 per cent on bills, while cities such as Delhi and Mumbai have recorded declines in peak-hour demand. CAG will seek to support consumers through this change by explaining tariff structures, helping households and small businesses adapt to the changes. Efforts will be made to advocate for equitable tariff so that it does not disadvantage smaller consumers.

Standards of Performance: The Consumer Service Rating of DISCOMs (CSRD) for 2023–24 assessed 66 distribution companies and revealed major disparities in service quality. Only four achieved A+ ratings, while 23 were graded C or lower. Karnataka’s 2025 tariff order, which mandates automatic compensation for service failures, demonstrates how regulatory innovation can drive accountability. Amendments to consumer rules have also reduced timelines for new connections and required mandatory check meters in the case of disputes.

CAG’s role in this area is three fold a) as part of the regulatory processes we will recommend measures to further improve  service standards  and b) build awareness using  people-friendly  language and mediums, while building capacity among stakeholders to make these benchmarks accessible, and to keep consumers informed of their rights  c) advocate for service performance-linked tariffs to be mandated.

Energy Storage: Very soon consumers will be allowed to own, lease, or operate Energy Storage Systems (ESS) as per the draft amendments proposed in Rule 18 (i.e. Energy Storage System) of Electricity Rules 2005 as on June 2025. This enables households and organisations to reduce their dependence on DISCOMs. Further, they will be able to shift their consumption, and even provide services to the grid. Further, research suggests that large-scale storage adoption could deliver significant savings and support renewable integration.

CAG will inform and promote consumer focused action research on storage options while seeking to promote models that ensure benefits reach households and communities. 

Electric Vehicles: The growth of electric vehicles (EVs) has brought transport within the ambit of the electricity sector. This has also spurred policy and regulatory interventions. For example, the Guidelines for Installation and Operation of Electric Vehicle Charging Infrastructure-2024 mandate fast connections, concessional tariffs during solar hours, and registration of public charging stations on a national portal. The amendments also guarantee the right to separate electricity connections for EV charging. 

CAG is working to ensure that these policies are implemented fairly, that residential consumers have access to safe and transparent charging, and that tariffs balance consumer interests with national energy goals.

In conclusion, India’s electricity sector is entering a new era in which consumers will play an important and decisive role. At the same time, the electricity sector is also going through a transformation phase with technological innovation using Artificial Intelligence (AI), blockchains etc.  CAG’s work will be to ensure that consumers remain at the centre of all changes, and are especially  not affected adversely in the process. As part of our work, we will strive to increase the number of active consumers in the electricity sector who are also  equipped with the knowledge and confidence to contribute meaningfully to its governance. 

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