Electricity Regulatory Commission proposes ‘automatic compensation mechanism’ for power distribution licencees such as KSEB

The Kerala State Electricity Regulatory Commission (KSERC) has proposed that distribution licencees such as the Kerala State Electricity Board (KSEB) should put in place an ‘automatic compensation mechanism’ as part of their Standards of Performance for the payment of compensation to consumers.

The recommendation regarding the ‘automatic compensation mechanism’ forms part of the amendments proposed to the KSERC (Standards of Performance of Distribution Licensees) Regulations which were introduced in 2015. The standards prescribe the minimum performance level specified for services provided by the licencee to a consumer and the compensation to be paid in the event of a breach.

In six months

The mechanism should be in place within six months from the date of the notification of the regulations, the draft KSERC (Standards of Performance of Distribution Licensees) (First Amendment) Regulations, 2026, said.

Initially, the automatic mechanism will be applicable to a number of performance parameters. The licencee is required to ensure a “progressive and gradual increase in the number of parameters” over time. “The consumer shall be automatically compensated, without the need for any claim to be made, upon automatic identification of a default in the performance of the Distribution Licensee in respect of the specified parameters,” says the draft. The commission is planning to hold a public hearing (online mode) on the draft on February 25.

Time limit

Among other things, the draft has proposed a revision of the compensation rates and time limits for addressing complaints. For instance, the draft proposes that the compensation payable to consumers for failure to restore supply in the case of normal fuse-off calls within the prescribed time limit from ₹25 to ₹100.

For restoration of supply in normal fuse-off calls, the draft proposes that the time limit be set at four hours in urban areas and six hours in rural areas from the time of registration of the complaint. In ‘difficult’ areas, the supply should be restored within eight hours, as per the draft. In the case of breakdowns of overhead lines or overhead cables, the time limit for restoration of supply has been set at six hours, eight hours and 12 hours respectively in urban, rural and difficult areas from the time of occurrence of the breakdown.