Consumers in Madhya Pradesh who were promised free smart meters might soon find themselves paying for the devices through a significant hike in their electricity bills. The state's power distribution companies (discoms) have embedded a substantial cost for these meters into their revenue requirements, contradicting earlier assurances of no direct consumer charge.
The Hidden Cost of 'Free' Infrastructure
The three discoms of Madhya Pradesh have collectively factored in Rs 513.62 crore as smart meter-related expenses in their Annual Revenue Requirement (ARR) for the financial year 2026-27. This large sum is a component of the total Rs 6,044 crore revenue gap for which the discoms have approached the Madhya Pradesh Electricity Regulatory Commission (MPERC), seeking a tariff increase of 10.19%.
This revelation means the smart meters, initially promoted as a free upgrade for consumers, are now accounting for nearly 8.5% of the total revenue gap. In practical terms, close to 1 percentage point of the proposed 10.19% tariff hike could be directly attributed to recovering the costs of these meters.
Discom-Wise Breakdown and Installation Drive
The projected smart meter expenditure is split among the discoms. The Central Discom has the highest requirement at Rs 276.20 crore, followed by the East Discom at Rs 164.71 crore, and the West Discom at Rs 72.71 crore. These costs cover lease charges, upfront payments, and monthly maintenance fees for the meters.
So far, the discoms have installed approximately 29 lakh smart meters across the state. However, this is against a massive target of 1.34 crore meters. With installations expected to accelerate significantly in 2026-27, the associated costs are projected to rise sharply, potentially putting further upward pressure on tariffs in the future.
Consumer Impact: Higher Bills Amid Promised Benefits
If the MPERC approves the full tariff hike, the financial impact on households will be direct and noticeable. For a typical household consuming 400 units of electricity per month, the current bill is around Rs 3,250. The proposed hike could add nearly Rs 300 to the monthly bill, pushing it to approximately Rs 3,550. This translates to an additional annual burden of about Rs 3,600.
This proposed increase makes Madhya Pradesh's power costs notably higher than neighboring states. For the same consumption, the bill is around Rs 3,000 in Rajasthan, Rs 2,200 in Chhattisgarh, and Rs 2,100 in Gujarat.
Of the total revenue gap the discoms aim to bridge, Rs 1,373 crore is slated to be recovered from domestic consumers and a larger chunk of Rs 2,790 crore from agricultural users. The remaining amount will be spread across commercial and industrial segments.
The discoms defend the move by highlighting the benefits of smart meters. They argue that the devices provide real-time updates on electricity consumption every 15 minutes via mobile apps and online portals. This allows consumers to monitor their usage patterns, receive daily consumption updates, see applicable charges, and track their balance, potentially leading to more efficient consumption and lower bills through behavioral change.
Despite these promised advantages, the rollout has been met with protests and resistance in several parts of the state. Residents are questioning the long-term cost implications of the technology. Critics argue that devices pitched as 'free' are effectively becoming a new line item on household expenses.
The final decision rests with the MPERC, which will consider the discoms' filings, stakeholder feedback, and public hearings before issuing a tariff order. The outcome will determine whether Madhya Pradesh's consumers ultimately foot the bill for the smart meter revolution.
