Madhya Pradesh Electricity Regulatory Commission
5th Floor, Metro Plaza, Arera Colony, Bittan Market, Bhopal 462 016





Directions to MPSEB

8.1              The hallmark of regulatory set-up is the least involvement of the regulator in the operations of the regulated entities. This would call for adequate amount of sincerity and discipline on part of the Petitioner. The Commission is disappointed to observe that due to inadequate response from the Petitioner, it has to issue directions relating to operations of the Petitioner. Even letters from the Commission remain unattended or have not been replied. This is not a very encouraging scenario. If such an attitude continues, then the Commission apart from imposing fines and penalties, would be constrained to prescribe a system where the concerned Board official would be directed to appear before the Commission in person and submit the information required. The Petitioner should bring in a positive improvement and evolve systems demonstrating self-regulation on its part.

8.2.1        The Commission while discussing various issues in earlier Chapters, has given certain directions to be complied with by the Board. All these are summarized below:

8.2.2    In its Order dated 26th September, 2001, the Commission directed (in clause 2.7 of the Order) that MPSEB should file its annual revenue requirement for the succeeding financial year before October 31,2001 and the proposal for fixation of tariff upto 30th November, 2001.  The Petitioner has filed the combined petition for ARR and tariff proposal very late.  It is directed that for the year 2003-04 the ARR be filed by 31 December 2002 and tariff proposal by 31 January 2003. MPSEB must ensure rigid observance of time schedule for subsequent years.

(Clause 1.2)

8.2.3    Specific oil consumption for smaller units nos. 1 and 2 of Amarkantak Thermal Power Station has been 14.067 ml/unit, which is abnormally high. The Board is directed to investigate into the causes of this high level of consumption for the year 2001-02 and take remedial steps.


8.2.4        Schedule of annual maintenance/overhauling of generating units
The Board has submitted a comprehensive schedule for the year 2002-03 for maintenance/overhaul of the generators in their tariff petition. The Commission directs that such schedule has to be submitted atleast three months before the start of the financial year that is by 31st December every year.

(Clause 3.8)

8.2.5      Installation of weightometers in the powerhouses. 

All the remaining weightomers be got installed and the Board may ensure proper functioning of the weightometers.

(Clause 3.9) 

8.2.6    Action to reduce transit and stacking losses

The Commission has directed to make available the data for the whole year for the coal dispatch and coal receipt to the Commission regularly.

 (Clause 3.10) 

8.2.7    Rates of power absorbed / purchased from captive power plants 

The Commission directs that the Board should seek the approval of the Commission before making an agreement with any captive power generator including rate of purchase.

(Clause 3.11) 

8.2.8    Procurement of power from any source 

The Commission directs that procurement of power by Board/successor utilities, from any source by entering into agreement for the same shall be with prior approval of the Commission.

(Clause 3.12) 

8.2.9     Replacement of defective LT meters

            The Commission directs the Board to submit the comprehensive plan for replacement of LT stopped/defective meters to bring the total percentage down to 3% and cities to 1.5% by March 2003.

 (Clause 3.14.3) 

8.2.10     Demand Side Management (DSM) Cell

The Commission has taken a serious note  on overlooking  the work of energy audit and DSM .  The study carried out by the Board to reduce the T&D loss does not cover the entire scope of energy audit and Demand  Side Management..  Although the Board has taken up the Demand Side Management and energy audit of agriculture and street light categories, the Board is directed to take up the work of energy audit and Demand Side Management in any industrial pocket on experimental basis and also on Board’s own power stations and Administrative offices.  Board to constitute a DSM Cell immediately. Quarterly report be submitted to the Commission for the above work.

(Clause 3.14.4) 

8.2.11      Monitoring of consumption by HT and LT industries

The Commission directs the Board to monitor the consumption of all HT consumers by installation of check meters for atleast 3 months in a year and submit the findings quarterly to the Commission.

(Clause 3.15.4) 

8.2.12      Checking of Meter reading of LT consumers

The Commission directs that the Superintendent Engineer of the Board should prepare a schedule of sample checking of meter readings by the senior officers. Results shall be reported by the Secretary of the Board on a quarterly basis to the Commission.

(Clause 3.15.7) 

8.2.13  Area of meter readers be changed every alternate cycle
The Board in its petition has indicated that after transferring the meter readers to other places and engaging new meter readers on contract basis, the complaints in regard to erratic meter readings have minimized. Details of reduction in complaints and increase in total recorded sale of energy should be reported to Commission.  Now it is also necessary that every alternate meter reading should be done by a different team/person than the one who did the reading on the previous occasion to obviate the possibility of unhealthy nexus.

(Clause 3.15.8) 

8.2.14    Collection Efficiency 

The Board must report to the Commission every quarter the names of Circles where the collection efficiency is below 90%. The Board has estimated that its collection efficiency would increase to 93% during 2002-03 from 92% during 2001-02. The Commission fixes the target for collection efficiency to be 96% during 2002-03 for current billing demand and the Board must also collect  atleast 15% out of arrears as at the start of 2002-03.

  (Clause 3.20) 

8.2.15   Programme for installation of LT capacitors for agriculture pump connections

The Commission has directed the Board to submit an action plan for installation and capacitors at 33 KV, 11 KV and distribution transformers by 31st March 2003. No new agriculture pump connection be given without installation of capacitors.

(Clause 3.22) 

8.2.16  During the course of the public hearing, many consumers objected to the derogatory remarks made by the petitioner on page 18 of the petition and demanded the Commission to record suitable comments in its Tariff Order for MPSEB. The Commission directs the Board to be careful in use of language in future so that the feelings of public are not hurt.

(Clause 5.2.7) 

8.2.17  In order to improve upon the performance of energy generation units during 2002-2003 and in subsequent years, it is directed that:

(i)     Board shall adhere to the scheduled annual overhauling / maintenance programmes of the various units and ensure its implementation. Capital overhauling of the units shall also be carried out periodically in accordance with the norms stipulated by the manufacturers.

(ii)    Board shall make all out efforts in taking up the refurbishment/ renovation / modernization work of the various units religiously so as to improve upon their working life and performance.

(iii)  Board shall make adequate funds available in order to make the running maintenance of the generating units.

(iv)  In order to keep the operating parameters in check and also to take care of due and proper maintenance of various generating units and their auxiliaries, it would be prudent to impart training and refresher courses to the concerned employees from time to time on the operation and maintenance of various units.

(v)   Board shall take up the matter with the Government of India and Coal India Ltd. for supply of adequate quantity of coal to its various thermal power stations. Matter regarding quality of coal wherever it is not upto the desired value shall also be taken up with the Coal India for improvement. Entering into Fuel Supply Agreement with coal companies will be a right step in this direction.

(vi)  Further Energy Audit of the power stations is bound to improve upon the performance parameters. As such a time bound programme shall be taken up by the Board in this direction.

(vii) The Board should also evolve an appropriate incentive scheme to motivate the employees for achieving highest possible generation. Similarly punitive measures may also be envisaged in the event the actual performance is lower than the desired minimum. 

(viii)           The Board is directed to file a report on action taken on the above points every six months by 30 April and 31 October every year.


8.2.18  The Board is directed to ensure that coal consumption for each power station is commensurate with the Station Heat Rate determined by the Commission as above. The Board is also directed to expedite the installation of weightometers  at Amarkantak T.P.S.


8.2.19  The Commission directs that assets register be maintained properly and the same should be completed within six months of this order and a quarterly progress report be filed with the Commission. Any failure to undertake this task will invite penalty on the Petitioner Board and the Commission will expect responsibility to be fixed on the concerned officers.

(Clause 6.8.3)

8.2.20  The Board has proposed an insurance expenditure of Rs. 518.86 lacs for 2002-03 on Board's money. The Commission directs the Board to submit details such as insurance amount, instances of loss during last 5 years, reasons, amount lost, amount claimed, amount received and details of expenditure made from the fund created for this purpose for 2002-03.

(Clause 6.8.7)

8.2.21  The Petitioner has projected an expenditure of Rs. 159.92 crores for 2002-03 for R&M works of transmission and distribution network. The Commission directs the petitioner to segregate the projected expenditure into two parts viz. those in the nature of routine maintenance and those in the nature of System Strengthening and Improvement and submit the details to the Commission. The Commission directs the Petitioner to submit a report on the impact of R&M works initiated on above parameters.


8.2.22  The Commission has observed that amount of expenditure the Board proposes to incur on development/ purchase of Computer Software during 2002-03 for areas having impact on revenue collection and performance monitoring have not been clearly brought out in the Petition. Keeping in view the current status of computerization in the Board and the need for introducing IT enabled systems for effective control and monitoring of its operations, the Board is directed to earmark adequate funds for investment in these areas.


8.3       In addition, the Commission has looked into certain aspects relating to operations of the Board. These aspects are discussed in the following paragraphs.

8.3.1    Billing and Collection             The Board shall make arrangements with banks to receive payment for energy bills and shall also make arrangements to receive payments between 9 AM to 4 PM on all working days.             The Board shall make arrangements for responding over telephone/internet to meter reading and bill related enquiries. Details about name and telephone number of the concerned employee of the Board shall be provided on the bill.             Many a times, the Petitioner revises the bill amount of its consumers. This may happen due to rectification of erroneous meter reading, incorrect tariff, etc. The Commission directs that in case the billing amount of any consumer is changed by more than Rs. 10000/- (reduction or increase), the same should be displayed on the website of the Petitioner with details such as name of the consumer, consumer no., original bill amount, revised bill amount, reasons, authorizing authority, etc. Such details should be consolidated and sent to the Commission every month and displayed on the website for a minimum period of three months.             In case of non-receipt of the bill by the consumer within 15 days of the reading or 20 days of due date of payment of preceding month’s bill, the consumer must get in touch with the concerned office of the Board for seeking duplicate bill and make the payment in time. Any non-cooperation in making the available duplicate bill should make the concerned MPSEB officer responsible. The consumers should make proper assessment of their consumption and accordingly make payment within time.  The Board must introduce the system of spot billing in large cities on the pattern already developed in some other States.             In the last Tariff Order, the Commission had directed the Board to provide meter reading card system for every low voltage consumer. This was suggested with a view to facilitate chronological recording of meter reading at one place. The system is yet to be implemented fully. The Commission has further reviewed the matter and directs the Board to introduce system of maintenance of Pass Book for each low voltage consumer. The system would ensure billing on actual meter reading basis and avoiding complaints in the nature of ‘non-receipt of bill before due date’. The system would result into increased consumer satisfaction. Besides, the Board would also be benefited by reducing incidence of errors in meter readings, faster recovery of its dues, reduction in printing and stationery cost, etc. 

The Commission recognizes the quantum of efforts and resources involved in introducing such a comprehensive system. Hence, the Board may implement this system in a phased manner starting with distribution centers of urban areas. The Board is directed to submit an action plan for introduction of this system to the Commission by 31 December 2002.     Late Payment Surcharge and Disconnection Policy            Presently if the consumers in LV category do not pay the energy bill within the due date prescribed, a surcharge of 2% of the total amount of current month’s bill (excluding arrears) is levied. If the dues remain unpaid for more than a month, surcharge of 2.5% per month of outstanding arrears is payable, in addition.  Even if the consumer pays the bill amount just one day after the due date, the surcharge for whole month @ 2% is levied on him. The Petitioner has proposed to reduce the rate of surcharge to 1.5% per month on the total amount of monthly bill (including outstanding arrears). As regards HV consumers no change is proposed on account of late payment surcharge. In case the default continues for more than 45 days after the payment due date, the Board has a policy for disconnection of the electricity supply.            During the course of public hearing, some consumers had mentioned that the present mechanism results into inconvenience and many a times the consumer has to pay disconnection and reconnection charges for defaults for smaller period or amounts. The Commission has analysed the issue in detail and feels that certain changes are required in the existing mechanism to make it sensitive to the convenience of the consumers on the one hand and protect the interest of the Petitioner on the other.  The late payment surcharge for LT consumers should be levied as under:

For delays upto 10 days

0.50% of bill amount or Rs 10 whichever is higher

For delays between 11 to 20 days

1.00% of bill amount or Rs 10 whichever is higher

For delays between 21 to 30 days

1.50% of bill amount or Rs 10 whichever is higher

For delays beyond 30 days

1.50% of bill amount or Rs. 10 whichever is higher, monthly Compounded

In certain cases the last date for payment may be a gazetted or a weekly holiday when the collection counters of the Petitioner are closed for public dealings. In such cases default would be construed only where non-payment continues beyond next working day.

  In case the default persists, the Board has a policy for disconnection of supply to the consumer. The Commission has given a thought in this regard also. The Board should disconnect the supply, after due notice, when the amount in default is more than Rs. 250 or 3 months have elapsed since the first payment due date, whichever is earlier. The Commission further directs that disconnection measures are to be applied without any discrimination. The Commission has observed that in certain categories of consumers including Govt. offices/ departments/municipal bodies, disconnections have not been carried out despite persistent defaults. We have to take a holistic view of the situation and such non-compliance has to be seen in proper perspective. Success of the reform and restructuring process set in motion in the state would also depend upon the capability of the service provider to recover the cost of power supplied. Any default would have a negative impact, in general, on the commercial viability of the organisation. Defaults in carrying out disconnection as per the policy, particularly in case of non-recovery of dues from Govt. or Govt. owned bodies or from large consumers, would make the process of making the sector self-sustainable further difficult. The Commission would take a very serious view of any non-compliance in this regard. Any exception in implementation of disconnection policy, where the default is more than Rs. 5000/- or from Govt. owned bodies, must be reviewed at the highest level of management in the Board and must be brought to the notice of Commission with reasons for non-disconnection on a quarterly basis.

In the case of defaults from organisations involved directly in critical public services, such as Govt. owned hospitals, water works, etc. the matter should first be taken up with the Secretary of the concerned Department in the State Government before initiating action for disconnection. Such relaxation would not be available in case of power supplied to administrative offices attached to such public services. 

In the case of consumers defaulting more than once in a financial year, the Board should raise demand for doubling their security deposit i.e. from existing 45 days’ consumption level to 90 days’ consumption level. However, if no default occurs during the subsequent two years period, the security deposit would be restored to the level otherwise applicable at the end of such two years’ period.

The Petitioner would display the details of such consumers, who are liable to be disconnected but have not been disconnected, on its website for public viewing till action as per the prescribed policy is taken. Details to be displayed on website may include name of the consumer, consumer number, category, amount of default, reasons for non-disconnection, who authorized non-disconnection, etc.

8.3.2  Inspection/surprise check Teams

Inspection team members shall invariably carry photo identity card and an Authorisation Card for conducting load verification. This authorisation shall be signed by an officer not less than  the rank of Executive Engineer of the Board. Any surprise check party entering the premises of domestic category consumer must have a female member who may be co-opted from the neighbourhood in the event that no male member of the house being checked is present.

8.3.3    Rural Electrification and Supply of Power

Approximately 25% of total electricity sale in the state is consumed by rural sector. Demand from rural sector is mainly for agriculture, residential, water supply and small-scale industry and commercial establishments. During the course of public hearing, various consumers complained that electricity supply to rural areas gets lower priority as compared to supply to urban areas. The Commission feels that there is a need to adopt a more focused approach for rural electrification and improving supply of quality power to rural areas. The Board should come up with an action plan to achieve these objectives in a time bound manner. One way of meeting these objectives could be creation of rural electricity co-operatives on the lines of Palli Bijlee Samitis functioning in Bangladesh. The structure was designed on the lines of Rural Electrification Administration in the United States. Since 1977, 54 PBSs have been established in Bangladesh providing service to around 2.5 million rural households. Transmission and distribution losses in the command area of these PBS are less than 20% with collection rate of over 95%. The PBSs buy electricity from Rural Electricity Board on preferential bulk tariff. Back home, Govt. of West Bengal has also established West Bengal Rural Energy Development Corporation with a view to transfer the rural distribution network of WBSEB to it. 

8.3.4     Initiatives by MPSEB to reduce T&D losses The T&D loss of 2001-02 is as computed  as 49.35%on the basis  of 11.5% load factor for agriculture consumers.  The T& D loss for 2002-03 based on 15% LF for agriculture consumers be brought down to 42%. Board has not carried out any studies to know component of technical loss, commercial loss including component of commercial  loss due to the theft/pilferage of energy.  Following action be taken up by the Board in this respect.

 i.            Carry out the studies through consultants to analyse T&D losses and find out its components.

ii.            Intensive  checking be done to stop the theft of energy in  clutsters and agriculture consumers, Juggi Jhopadies,  unauthorized  colonies, etc.  

iii.            FIRs be lodged and culprits apprehended  if theft /pilferage is found.

iv.            Close monitoring should be done of HT and LT industries to ensure that there is no theft of pilferage of energy and consumption is commensurate with actual use.  Compiled   studies be done all different categories of HT consumers.  100% meter reading particularly of HT consumers be ensured.  Supervisory officials  DE, AE, JE must be given a programme to carry out counter checking of  LT the meter readings done by Meter readers.    Area of meter readers should be changed  monthly.

v.            In addition to the technical loss specifically check out in every region  and intimated to the Commission along with the clearly report thereon.

vi.            Average Load Factor of Agriculture Consumers.

The Commission has taken a serious note  of non-compliance of the order given in the  tariff order dated 26.9.2001 for carrying out a sample studies  for every region.   The sample study of metering on  region basis cannot reflect  the factual consumption unless study is done by covering proportionate no. of consumers based on cropping pattern and number of crops in proportion to total no. of agriculture consumers in the region.

8.3.5    Bill Design 

During the public hearings several speakers have complained that the bill served by the Board is very complicated and a common man is not able to make head or tail about it.  Presently charges under 7-8 items of different nomenclature such as demand charge, minimum charges, surcharges, levies like electricity duty and cess, meter rent, FCA, capacity surcharge, welding surcharge, late payment surcharge etc. in the bill format. This makes it quite cumbersome for an average consumer to understand the manner of calculating his bill amount. Further, important details such consumption during previous year, cumulative consumption during the current year, etc. are not displayed on the bill. Displaying such details would help the consumer to keep track of his energy consumption and would act as ready reference for comparison with the consumption during the previous year.

The Commission has already taken cognisance of the above issues and hence directs the Board to design a new bill format. The format should be simple and on the basis of the meter readings indicated in the bill, the consumer should be able to calculate and check by itself the total amount due.  This would also prove to be helpful if in a particular month the consumer doesn’t get the bill in time, he could, on the basis of meter reading, calculate the amount due and deposit the same to the Board.  The new, simplified format of Electricity Bill should be implemented by 1 April 2003. 

8.3.6    The Petitioner would prepare a list of its ‘valued consumers’ who consume electricity more than a pre-determined threshold limit. In particular cycle. The details would include name of the consumer, consumer number, consumption during the last billing cycle, aggregate consumption during the last one-year, telephone number, etc.  Energy consumption of these consumers should be analysed on a regular basis by the Board and report to the Commission on a quarterly basis. The Petitioner would come up with a threshold limit (in terms consumption in units) for each category of consumers.

8.3.7     Database Management And Management Information System (MIS) The Commission has observed that without availability of a comprehensive and reliable database, effective regulation by the Commission for achievement of the objective of the efficient working of the utility cannot be achieved. The Commission has prescribed various formats to gather different type of information from the Board. Before the first tariff order of the Commission, the Board was directed to submit regular information on quarterly basis for the following:


i.    Arrears outstanding against the consumer 


The Board was required to submit quarterly report on the consumer category wise position of the arrears, the action taken by the Board on the defaulting consumer and the recovery made by the Board. The Board submitted the last report for the quarter ending March 2002 and no reports have been submitted thereafter.


ii. Checking of theft and pilferage/misuse of the energy.

The Board was asked to submit a quarterly return for the checking of the various installations of HT consumers and the LT consumers, the action taken on detection of the theft, the details of the amount billed and the recovery made and the FIR lodged by the Board. The last report submitted by the Board was for March 2002 and no reports have been submitted thereafter.


iii   Rural electrification programme of the Board. 


The Board was submitting a monthly progress report on the rural electrification in the State. For the year 2002-03, the Board has not fixed any targets, therefore, the progress of rural electrification programme does not serve any purpose. The Board may submit the monthly reports after setting the target for they year.


iv.            “A” and “T” Series forms :


In order to have the information on various commercial, financial and technical parameters required in connection with the fixation of the tariff , the Commission has finalised the “A” series forms (for ARR filing) and “T” series forms (for Tariff filing). The information in “A” series forms is required to be submitted every year by 31st October, whether the Board is asking for tariff revision or not. The information in “T” series forms is required to be submitted by 30th November. The Board has not submitted the requisite information for the ensuing year.


v.            “C” Series Forms


In its first Tariff Order the Commission has directed the Board to report on monthly, quarterly half-yearly and yearly basis for the monitoring prescribed certain forms for this purpose. For convenience the Commission prescribed 15 Nos. formats (C-01 to C-15) in addition to the “A” series and “T” series forms and the other formats such as status of arrears on different categories of the consumers and status of checking of connections (HT and LT) for theft/pilferage and misuse of energy etc. These 15 formats are:



Slab-wise consumption by Domestic consumers (Annual)



Annual Consumption (Units) of various non-domestic consumers



Checking of pump connections



Installation of meters to un-metered L.T. Connections



Increase in consumption of industries



Replacement of defective HT meters/Metering equipment



Replacement of defective LT meters



Providing meter reading cards



Security Deposit (in Lakh of Rupees)



Energy purchased from captive power plants (Monthly)



Action under DRA



Write-off of arrears



Installation of H.T. and L.T. capacitors



L.T. Voltage in Villages



List of agricultural consumers availing free supply

Although the Commission had designed and supplied these formats to the Board but the Board has shown reluctance to submit the aforementioned information for the reasons best known to them. On numerous occasions, the Board was asked to develop the management information system comprising the details of all the consumers, which could be available on line to the Commission. The Board has indicated that they have developed a revenue management system and this system is under pilot implementation in Jabalpur and Bhopal city circles. However, the Board has never made available the details of this revenue management system to the Commission. The Commission feels that the Board has taken inordinately long time for compliance. The non-submission of the information by the Board gives rise to a doubt that there is a deliberate attempt to conceal the poor performance. The Commission desires that the Board should compile the information for analysis and for production of the meaningful reports and submit the same to the Commission regularly. The Commission also feels that the lack of the training to the Board’s staff to maintain the data base could be a reason for non-compliance of the directives, therefore, Commission directs that the Board should arrange appropriate training to concerned staff. For this purpose the Board can indicate adequate expenditure in the ARR to be filed in future.

There are numerous complaints received in the Commission about the poor quality and reliability of the power and at present no system is available, which can facilitate the Commission to monitor these parameters. An MIS is being developed to make available the information in respect of generation, availability and purchase of power, coal stock, outages at power stations, the scheduled and un-scheduled load shedding, energy inputs and energy sent to EHV substations, the outages of EHV transmission lines, the voltage profile at 132 KV substations, the breakdowns at 33 KV and 11 KV substation/feeders for more than three hours and the revenue collection, all on daily basis and the performance report of power stations, the energy transaction during the month and the demand raised and collection realized during the month on a monthly basis to the Commission. Apart from this MIS, the Commission also desires that the information in respect of single light point consumer, agriculture consumer, street light connection of local bodies, the details of LT domestic consumers, details of 33 KV substations and the details of the employees (working as well as retired) availing concessional electricity be submitted to the Commission. This comprehensive data (as on 30th September 2002) is required for rural as well as urban areas. The detailed formats for submission of the daily and monthly information shall be issued separately by the Commission. The daily returns shall be required to be furnished through E-Mail and the monthly, half yearly, yearly and one time information shall be submitted on CD/Floppy discs (depending upon the size of the data). This information shall be prepared on Microsoft Excel.

8.3.8  Three Phase supply to agriculture consumers

            Large cultivators having fields along river-beds submitted during public hearings that keeping in view the requirement of water and long distance of the water supply lines, duration of energy supplied to them should be increased. The Commission has considered their views and have introduced a new tariff structure for such agriculture who may require power for longer duration and are willing to pay additional amount for the extra hours of supply.  This arrangement shall be made by the Board only on receipt of written consent of atleast 80% agriculture consumers on a particular feeder agreeing to pay higher charges as above subject to the condition that there are no arrears against the consumers on that feeder.

8.3.9        The Commission had earlier directed to come up with all types of miscellaneous charges for scrutiny of the Commission. This has not been complied with by the Board. However, a Schedule of existing Miscellaneous Charges has been submitted to the Commission by the Board on 27 November 2002. The MPSEB is hereby directed to come up to the Commission with detailed proposal for revision of miscellaneous and other charges, and full justification, within a month.


8.3.     Review Mechanism

The Commission desires to institute a review mechanism through regular monthly meetings commencing from 1st February 2003 wherein the status of compliance of the directives of the Commission shall be reviewed jointly with the utilities. The Commission’s objective is to play the role of a facilitator and contribute   to turnaround efforts of the utilities.