To understand Additional Security Deposit (ASD), let’s first look at how postpaid electricity billing works.
The Billing Pattern
Electricity bills are generated after one month’s consumption. Once the bill is issued:
- Consumers get 14 days to make the payment.
- If not paid, the supply may be disconnected after 7 more days.
In effect, the department always carries a credit risk equivalent to about 45 days of electricity consumption (30 days consumed + 15 days billing and payment period). Hence, utilities collect a Security Deposit from consumers to cover this risk — it’s essentially an advance payment meant to safeguard the cost of up to 45 days of electricity usage.
Security Deposit at the Time of New Connection
When a consumer applies for a new electricity connection, there’s no record of their actual consumption pattern. Therefore, they are required to pay a minimum security deposit, determined by the Uttar Pradesh Electricity Regulatory Commission (UPERC), based on:
- Type of connection (domestic, commercial, industrial, etc.), and
- Contracted load.
Note: Refer to the UPERC’s Minimum Security Deposit Chart for exact values
What is Additional Security Deposit (ASD)?
Every year, the department reviews the average consumption of each consumer at the beginning of the financial year.
If it is found that the existing security deposit (paid earlier) is less than the required amount (based on actual 45-day consumption), the consumer is asked to pay the balance.
Why are ASD Notices Sent Every Year?
The Additional Security Deposit notices are sent annually because both power consumption and tariffs generally increase every year due to:
- Use of more electrical appliances
- Annual tariff revisions (rate hikes) by UPERC
These factors cause the average billing amount to rise, and therefore, the required security deposit must be adjusted to maintain adequate coverage.
Note:
- Prepaid consumers are exempt from any security deposit requirement, as they pay in advance for their energy usage.
- Earlier, the security deposit was calculated based on 60 days of consumption. UPERC has since revised it to 45 days, effective from 8 July 2019.
