Additional Security Deposit Adjustment / Demand is a statutory and regulatory process, mandated by OERC strictly in adherence with the Electricity Act, 2003: TP Odisha Discoms

By Kalinga Voice Last updated Dec 19, 2025

1. Security Deposit is mandated by Hon’ble OERC as per The Electricity Act, 2003
2. Security Deposit is taken before release of any new connection and reviewed annually:
a. Adjustment of Security Deposit in case of reduction in tariff and / or decrease in actual consumption in the previous Financial Year.
b. Additional Security Deposit in case of increase in tariff and / or increase in actual consumption in the previous Financial Year.
3. ASD is a long-standing regulatory practice implemented by all states nationwide.
4. Security Deposits are ring-fenced, bank-secured, interest-earning and fully refundable.
5. In 2024-25 Interest on Security Deposit to the tune of Rs 217.29 Crore, at 6.50% Interest rate, have been credited in Consumer Bills

Bhubaneswar, December 18, 2025: TP Odisha Distribution Companies have stated that the levy of Additional Security Deposit (ASD) on electricity bill is a statutory requirement mandated under the Electricity Act, 2003 and abides by the Odisha Electricity Regulatory Commission (OERC) regulations.

Security Deposit (SD) adjustment and Additional Security Deposit (ASD) is linked to consumer’s consumption patterns and applicable tariff charges in the state.

Consumers whose consumption has reduced during the last financial year are eligible for adjustment of excess Security Deposit in their electricity bills. Conversely, consumers whose electricity consumption has increased are required to deposit Additional Security to ensure that the security coverage remains sufficient in line with regulations.

Consumers continue to earn interest on their Security Deposits every year, with the interest amount credited to their electricity bills annually, in line with regulatory provisions. All amounts collected towards Security Deposit and Additional Security Deposit are securely maintained as Fixed Deposits with scheduled banks to ensure that consumer funds remain fully protected. These deposits are not used for any other purpose by the DISCOMs.

Security Deposits, along with applicable interest, are fully refundable when a consumer surrenders or opts out of the electricity connection. In addition, Discoms offer consumers the option of prepaid electricity connections, which do not require any Security Deposit or Additional Security Deposit, providing greater flexibility and eliminating the need for such deposits altogether.

In 2024-25 Interest on Security Deposit to the tune of Rs 217.29 Crore @6.50% interest rate have been credited in Consumer Bills across the state.

The framework governing Security Deposit and Additional Security Deposit is neither new nor discretionary. These provisions have been in place for several decades and were followed even during the period of erstwhile utilities such as CESU, NESCO, SOUTHCO and WESCO. The applicable regulations in Odisha are fully aligned with the Electricity Act, 2003 and practices followed by electricity distribution utilities across other States. It is an integral part of the regulatory system designed to maintain financial discipline, protect the interests of consumers and ensure the overall stability of the electricity distribution sector.

Consumers who receive a notification for Additional Security Deposit are required to make the payment within the stipulated timeframe. As per statutory provisions, a surcharge of 15% per annum is applicable on any unpaid amount beyond the due date.

Speaking on the matter, Mr. Gajanan Kale, Chief – Odisha Distribution Business, Tata Power said, “Serving nearly 1 crore consumers, with a growing customer base, Tata Power’s distribution business follows robust regulatory mechanisms to ensure a reliable power supply 24×7, 365 days, in line with state and central guidelines. The annual Security Deposit review is a statutory exercise mandated by the regulator, designed to protect consumer interests while ensuring business continuity. The Security Deposit earns 6.50% annual interest, which is adjusted in electricity bills during the first quarter, and any excess amount arising from lower consumption is also adjusted. These deposits are maintained as Fixed Deposits and are not used for operational purposes.”