A recent incident involving the Maharashtra State Electricity Distribution Company Limited (MSEDCL) has raised significant concerns among consumers regarding the imposition of additional security deposits for new electricity connections in the city.
Typically, MSEDCL collects an annual security deposit in April from existing power users, which is based on their average electricity consumption. Consumers are also entitled to earn interest on this deposit. However, a particular case involving Arun Singh, Director of an automobile training institute in Vaishali Nagar, has sparked questions about the transparency of this process.
Arun Singh applied for a new commercial power connection to facilitate his business expansion. After routine inspections, MSEDCL issued a payment demand of ₹10,970, which included a security deposit of ₹10,850, calculated based on the anticipated monthly electricity bill. Singh complied with this payment, but shortly thereafter, he received an additional notice demanding an extra ₹3,000 as a further security deposit—before the connection was even activated.
This unexpected request led Singh to challenge the fairness and legality of the charge, noting that such deposits are usually assessed only after a year of usage, based on actual consumption. When questioned, MSEDCL officials confirmed the additional deposit, citing a provision that allows for the collection of security deposits from new consumers as a precautionary measure. They argued that anticipated future usage warranted the advance payment.
However, sources within the power utility indicated that this might be part of MSEDCL’s broader strategy to enhance revenue collection. Critics have labeled the move as “unethical” and financially burdensome for new businesses, which are already heavily investing in infrastructure and expansion.
Consumer rights advocates are now calling for greater transparency and consistency in MSEDCL’s billing policies, especially for new commercial applicants, urging regulatory bodies to review these practices thoroughly. Stay tuned to know more about it and others only with us while you can share your thoughts by commenting below.
