'Gruha Jyothi' Effect - Consumers need to exceed usage limit to get interest on deposits

Bengaluru: State electricity supply companies (ESCOMs) have issued an informal direction to customers receiving zero bills under the ‘Gruha Jyothi’ scheme: to earn interest on their deposits, they need to consume more electricity than the stipulated amount and thereby exit the zero-bill category.

Under the ‘Gruha Jyothi’ scheme, the state government provides free electricity up to 200 units per month to every registered household. There are 1.65 crore consumers registered under this scheme, out of which approximately 85 lakh receive zero bills by staying within the average consumption limit set by the government.

However, these consumers have not yet received the interest on their deposit for the first quarter of the year. To claim this interest, they now need to exceed the stipulated consumption limit.

ESCOMs only have the RR number (Revenue Registration number) of their consumers, and no other supplementary documents like bank account details. This raises the question of how to pay the interest on the deposits. ESCOMs have reportedly concluded that those currently receiving zero bills will either use additional electricity at some point or need interest on their deposit, prompting them to exceed the limit. The interest will then be adjusted in their bill, sources said.

There is also no information on the total amount of deposits held by consumers receiving zero bills. Consumers are worried about receiving a bill of Rs. 300-400 for the extra electricity used to claim an interest of Rs. 100-200 annually. Those who exceed the 200-unit limit or the average limit will receive a bill for the additional usage, and the interest on their deposit will be adjusted in this bill, posing no problem for this category of consumers.

The interest on deposits amounts to Rs. 656 crore. ESCOMs need to distribute Rs. 656.61 crores to consumers, with BESCOM owing the highest amount of Rs. 385.81 crores, MESCOM Rs. 59.24 crores, CESC Rs. 67.57 crores, and HESCOM Rs. 52.35 crores.

There are also allegations that the Karnataka Electricity Regulatory Commission (KERC) has shown bias while determining the interest rate on consumer deposits. While setting rates in other cases, KERC has used the MCLR (Marginal Cost of Lending Rate), but for consumer deposits, they have applied the RBI rate, which is lower. Banks borrow money from the RBI at this rate but do not lend to consumers at the same rate. Consumers are demanding that KERC take action to ensure the payment of interest on their deposits.

“Consumers will receive the interest amount as an adjustment in their bill once they exceed the zero-bill category by using additional electricity. Until then, the amount will remain credited to their RR number,” Mahantesh Bilagi, Managing Director, BESCOM

– Translated from a Kannada article by Vijay Kumar Chandaragi