Mohammad Mustafa Panwari, a resident of Bihar’s Jagdishpur was shocked to see his electricity bill of Rs. 34,57,334 – courtesy to the new smart meter he had disconnected several months back, but it continued to roll, spewing a bill of Rs. 9,527 per day for several months. This ‘smart’ meter, part of Narendra Modi government’s Smart Meter National Programme (SMNP) couldn’t even gauge if it was connected or not! It took several weeks of effort by Mustafa, with support from CPIML MP Sudama Prasad and party members before the bill was corrected to Rs. 1,718.
The story of Mustafa Panwari is just one among millions of toiling masses and poor across India who are facing the wrath of an unwarranted technological system that only benefits the private electricity companies and not the people. These meters, sold by the government as a ‘revolutionary step’ towards accurate billing and electricity theft prevention, is nothing but to help the private companies amass wealth.
In Uttar Pradesh’s Prayagraj, smart meters installed in seven divisions have reportedly caused bills to increase by three to four times for many households. A Public Interest Litigation (PIL) filed in the Allahabad High Court in 2021 has highlighted these discrepancies. For instance, consumers who previously received monthly bills between Rs. 500 and Rs. 700 now report charges as high as Rs. 3,000 to Rs. 5,000. The petition accuses the power distribution officials of ignoring complaints and failing to investigate irregular readings, leaving consumers frustrated and financially burdened
Under the pretext of modernisation of the electricity grid, multi-crore contracts were issued to private companies to provide smart meters and upgrade the system. One such company was Adani Group, a company marred by bribery and fraud charges. In 2023, it bagged two contracts worth Rs 13,888 crore by the Maharashtra State Electricity Distribution Company Limited (MSEDCL) to install smart meters in Mumbai. The Adani Energy Solutions Ltd (AESL), which controls 30% of the smart meter market share, has faced severe backlash in Maharashtra. Despite promises of greater billing precision, many consumers have claimed that their bills have nearly doubled without any significant change in their electricity consumption.
Many state governments have adopted stringent measures to ensure compliance with smart meter installations, including forcibly disconnecting households using older meters. Several households also face issues with prepaid smart meters, where electricity is cut off immediately after the balance depletes. This system is especially brutal for those with irregular incomes who cannot predict when they will run out of funds to top up their accounts.
The implementation of smart meters has led to frequent complaints of inflated bills across the country. Unlike traditional meters, where households could gauge their consumption manually, smart meters calculate consumption digitally and often inaccurately, leading to sudden spikes in monthly bills.
The Electricity (Rights of Consumers) Rules, 2020, which implemented the provisions of prepaid smart meters, also introduced Time of the Day (TOD) tariffs or dynamic pricing. There will be different pricing for high peak (after solar hours) and non-peak hours. The peak hours will witness a rate 10-20% higher. This absurd pricing scheme will hit the poor hardest. TOD tariffs could become a financial burden, as they would have no choice but to pay the higher rates, even though they are among the least able to afford them.
Smart Meters Face Backlash in Several Countries
While the World Bank and international financial institutions are pushing for smart grids across the developing countries, several developed countries have found this system failing and not cost effective.
Britain, Germany, and Canada have experienced substantial backlashes against the high costs and inefficiencies of smart meters. In fact, the stories of foreign nations can serve as cautionary tales, warning India against repeating the same costly mistakes.
In the UK, the government's ambitious plan to roll out smart meters in every home by 2020 has been nothing short of disastrous. Originally estimated to cost £11 billion, the initiative has far exceeded budgets and raised serious concerns about its effectiveness. By 2021, a National Audit Office report revealed that the cost savings promised by the program had failed to materialise. Instead of reducing consumer bills, many households found their electricity charges increased due to smart meter malfunctions and hidden fees related to installation and usage.
Despite an investment of billions, many users still complain of receiving higher bills, particularly due to the dynamic pricing models that smart meters enable. A staggering one-quarter of UK households have either refused to install the meters or opted to have them removed. The UK government, facing mounting pressure, announced plans to scale back the program and re-evaluate its long-term viability.
In Germany, the rollout of smart meters has been far more cautious. Germany’s Energy Agency has only allowed the installation of smart meters in high-energy-consuming households and industrial sectors. A 2020 study concluded that smart meters would only be economically viable if installation costs were significantly reduced and if the benefits for low-consumption households were clearly demonstrated. The findings starkly contrast with India’s rushed implementation of these meters, which have already sparked widespread discontent among lower-income consumers.
Germany's decision to restrict smart meter usage highlights the importance of cost-benefit analysis and consumer protection before rolling out large-scale energy reforms. A report by the German Federal Ministry for Economic Affairs stated that costs for households with low energy consumption outweighed the benefits, which is precisely the issue India faces today.
In Ontario, Canada, the introduction of smart meters has resulted in widespread consumer dissatisfaction. The Ontario Smart Meter Program, launched in 2009, promised to reduce electricity costs by providing more accurate billing. However, it has instead led to increased costs due to time-of-use pricing (dynamic pricing) and technical glitches. Many users complained of receiving sky-high bills despite minimal usage, and the resulting public backlash forced the Ontario Energy Board to investigate the program.
A 2019 report by the Toronto Star revealed that while smart meters did provide real-time data for utilities, they failed to deliver the promised savings to consumers. The Ontario Energy Minister admitted that the program had resulted in a cost to taxpayers that had not been justified by any corresponding benefit.
A ‘Smart’ Push Towards Privatisation
What makes this smart meter situation even more alarming is the role of private electricity companies in India’s power sector. These smart meters are part of the ‘One Nation, One Grid, One frequency, One Price” framework of the Modi government for adoption of a market based economic dispatch in the centralised day-ahead market (future power market). In 2021, Ministry of Power issued a notification introducing the Market-Based Economic Dispatch (MBED) framework, which aims to undermine state-level autonomy in power management, forces state-owned Distribution Companies (DISCOMs) into a centrally controlled system, and creates opportunities for large private players to dominate the market, potentially exploiting it for profit.
The MBED framework is seen as the precursor to a broader agenda aimed at complete privatisation of India’s public power sector. Under World Bank guidance, the Ministry of Power initiated a mandatory smart metering project, which was abruptly enforced alongside the withdrawal of existing financial support schemes for DISCOMs from the central government.
As part of these plans, the National Smart Metering and Revamped Distribution Sector Scheme (RDSS) launched with an ambitious budget of Rs. 3,03,758 crore. While Rs. 97,631 crore is supported by the central government, Rs. 2,06,127 crore will eventually fall on state DISCOMs and consumers, imposing significant financial strain. The RRDS proposes the discontinuation of all cross-subsidies on electricity. If any subsidies are to be provided, the state government must do so via the Direct Benefit Transfer (DBT) system. This means that every consumer will have to first pay the full price for electricity, and any subsidy they are entitled to will be reimbursed later. We have seen how the DBT system has failed miserably in previous instances, such as the gas cylinder subsidy, where many beneficiaries were either excluded or faced delays, leading to inefficiencies and immense suffering for the poor.
Apart from smart meters, the RDSS also covers the upgradation of the electricity distribution sector. The overall aim behind these frameworks and schemes is to open the gates of electricity distribution, which is currently managed by state-owned companies, to private corporations. This way private players are reaping profits in the name of a "modernised and efficient system," using the consumers’ money.
The picture painted by the Modi regime to push for privatisation is that state DISCOMS are facing financial burden. However, a significant part of this financial strain stems from non-beneficial, often unfavourable, contracts with electricity generators. This purchase cost forms 70-80% of the expenditure for state DICOMs. These contracts, which were often signed at high rates, have contributed to the unsustainable financial situation of many state-owned DISCOMs. Furthermore, the move in India to privatise electricity generation has resulted in the states having to enter into regressive power purchase agreements (PPAs) with private companies leading to steep increase in the average cost of electricity generation. The whole scheme of smart meters has nothing to do with technology or modernisation—it is a political scam to help corporate cronies.
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Protest Against Prepaid Electricity Meters
As part of its "Oust BJP, Save Uttarakhand" campaign, CPIML Uttarakhand staged a protest outside the Sub-Divisional Officer’s (SDO) office of the Electricity Department in Lalkuan on November 6, 2024. The protesters opposed the installation of prepaid electricity meters, the rising electricity bills, and the ongoing moves towards privatisation of the Uttarakhand Power Corporation Limited (UPCL). They called on the state government to abandon the prepaid meter scheme and halt any privatisation attempts of UPCL. The protest program began with a tribute to the victims of the recent tragic accident in Marchula, Almora, along with wishes for the swift recovery of the injured.
Senior CPIML leader Comrade Bahadur Singh Jangi said the BJP-led state government is attempting to privatise UPCL by introducing prepaid meters, which he argued would increase hardships for the public, who already face high electricity tariffs. He noted that repeated tariff hikes had already strained household budgets, and the new prepaid meter scheme would only worsen the situation.
District Secretary Kailash Pandey highlighted that the prepaid meter policy could lead to significant price hikes and ultimately push the power sector towards privatisation, handing control to private conglomerates such as Adani. While people are suffering under skyrocketing prices and increasing unemployment, the Modi and BJP governments across the country are bothered about how to increase profit for Adani and other big corporates, who are close to the ruling regime.
Kailash Pandey said that the scheme would not only exploit consumers with higher bills but would also endanger the jobs of existing Electricity Department employees, with mass layoffs expected, particularly among contract workers, exacerbating the state’s growing unemployment crisis. Following the protest, a memorandum listing the party's demands was submitted to the Chief Minister through the SDO. Three key demands were as follows:
- The state should abandon the installation of prepaid electricity meters and maintain the traditional post-paid system.
- Any attempts to privatise or outsource UPCL should be immediately halted.
- Immediate steps should be taken to address the persistent low-voltage issues, and substantial increases in electricity bills should be prevented.
Earlier on October 25, 2024, CPIML initiated a month-long statewide campaign in Uttarakhand with the slogan, "Oust BJP - Save Uttarakhand." The campaign began with mass contact and leaflet distribution in Nainital district, led by senior CPIML leader Bahadur Singh Jangi.
The campaign against the Pushkar Singh Dhami-led government highlighted that the BJP regime has failed to improve Uttarakhand despite holding power for the majority of the state’s existence. The BJP government has turned Uttarakhand into an experimental ground for resource exploitation and communal division. The BJP’s “loot, lies, and divisive politics” endanger Uttarakhand’s future, which needs to be safeguarded by taking inspiration from historical Uttarakhand leaders like Chandra Singh Garhwali and Nagendra Saklani.
The campaign also drew attention to the crisis posed by stray cattle, which has disrupted farming and led to frequent road accidents. The government is exploiting cow protection laws for political gain. The "Remove BJP - Save Uttarakhand” also condemned the increasing violence against women in the state. Further, the campaign noted Chief Minister Dhami’s rhetoric around “Love Jihad,” “Land Jihad,” and “Spit Jihad” as shameful and unconstitutional and these moves by BJP are to intensify communal divisions rather than addressing real issues.
