Karnataka will not install smart meters under Centre’s Revamped Distribution Sector Scheme

Officials had said that with loss of revenue standing at 10% and power theft not rampant in urban areas, it will be feasible to install smart meters only when new applications are submitted rather than replacing digital meters (which have recently been installed) in Bescom limits.

The Energy Department has decided to pull out of the Union government’s Revamped Distribution Sector Scheme (RDSS) under which prepaid smart meters were supposed to be installed in Karnataka. Instead, the Department will install smart meters by itself, outside of the scheme.

“The State has taken a decision not to avail the RDSS scheme. The process is going on for the installation of smart meters outside of the scheme,” said Gaurav Gupta, Additional Chief Secretary, Energy Department.

Karnataka is one of the very few States in the country that have not availed RDSS for the installation of smart meters. According to the data provided by the Ministry of Power recently in Rajya Sabha, 19.79 crore consumer smart meters have been sanctioned for different States under RDSS. The officials remain tight-lipped about why the State will not install smart meters under RDSS.

Sources in the Bangalore Electricity Supply Company (Bescom) had earlier revealed that while the project was awaiting a nod from the State Cabinet since 2021, even if the approval was received, the pending arrears of the escoms to the tune of over ₹6,500 crore, might prove to be a roadblock.

While the Energy Department has been speaking about the installation of smart meters for years now, there has not been much progress on this front. Experts in the power sector say that the reason for the delayed installation of smart meters, as well as not making use of the RDSS for the same, is multi-dimensional.

“The main obstacle for installation of smart meters, which are essentially prepaid, is the security deposit worth ₹8,845 crore paid by the customers for meters to the five escoms. Once prepaid meters are installed, consumers will demand the deposit money back. They are currently holding the deposit money by paying consumers a meagre interest of 6.5%. The other reason is that there will be no scope for meter manipulation if smart meters are installed,” said M.G. Prabhakar, former advisory member of Karnataka Electricity Regulatory Commission (KERC).

In August 2024, the KERC had also directed escoms to spend money on the upgrading of infrastructure rather than spending on smart meters if RDSS is not an option.