TPCODL clarifies Additional Security Deposit is a statutory requirement not linked to smart meters

THEBUSINESSBYTES BUREAU

BHUBANESWAR, DECEMBER 8, 2025

TP Central Odisha Distribution Limited (TPCODL) has issued a detailed clarification following consumer queries and concerns over recent demand notices regarding the Additional Security Deposit (ASD). The utility emphasised that the ASD is strictly a statutory requirement mandated under the Electricity Act, 2003, and the Odisha Electricity Regulatory Commission (OERC) Distribution (Conditions of Supply) Code, 2019. It stressed that the exercise has no connection whatsoever with the installation, functioning, or rental of smart meters.

TPCODL explained that the requirement for consumers to maintain an adequate Security Deposit stems from Section 47 of the Electricity Act, 2003, which authorises distribution licensees to seek reasonable security from consumers for the electricity supplied. Building on this legal framework, OERC introduced Regulations 52 to 55 of the Distribution Code, 2019, laying down the detailed process of depositing, reviewing, and refunding Security Deposits.

The utility clarified that issuing ASD notices is an annual statutory exercise. Each year, as prescribed under Regulation 53, the adequacy of a consumer’s Security Deposit is reviewed based on electricity usage during the previous financial year. For FY 2024–25, consumers whose power consumption increased will be required to pay an Additional Security Deposit, since their existing deposit — calculated for two months of billing — has fallen short of the updated requirement. Conversely, consumers who used less electricity in FY 2024–25 and now hold a surplus deposit are eligible for refunds. Any excess amount above 10 per cent of the required value will be returned through adjustments in their electricity bills.

Assuring consumers about the safety and proper utilisation of their deposits, TPCODL stated that Security Deposits are kept in scheduled banks as Fixed Deposits, as directed by the OERC. These funds are not used for business operations. Consumers also receive annual interest at a rate of 6.50 per cent, which the utility points out is comparable to prevailing bank fixed deposit rates. The interest accrued is automatically reflected in consumers’ electricity bills each year. The Security Deposit ultimately acts as a protective financial buffer — should a consumer default on bill payments leading to disconnection, outstanding dues can be adjusted against the deposit.

TPCODL also drew attention to Regulation 55, which makes timely payment of the ASD mandatory. Consumers who fail to pay within the stipulated period will face a surcharge of 15 per cent per annum on the unpaid amount. The utility urged consumers to avoid unnecessary penalties by clearing their dues promptly.

Reiterating its stand, TPCODL categorically dismissed any link between the ASD and smart meters. It noted that the annual revision of Security Deposits is a long-standing regulatory requirement tied solely to consumption patterns and tariff guidelines — not to the cost, installation, or operation of smart meters.

The company reaffirmed its commitment to transparent operations and strict compliance with all OERC regulations, adding that the clarification aims to dispel misconceptions and help consumers better understand the statutory nature of the ASD process.