The Effect of Smart Metering on Revenue Collection: Evidence from an Experiment in Haryana

We conduct an impact analysis of smart meter feature activation in urban households in the state of Haryana in India.

Using a cluster randomized control trial covering over 25,000 urban consumers we test the impact of switching consumers from having their bills generated based on manual meter readings, to automated online billing using data transmitted by smart meters. We find that the movement to online billing slightly reduces revenue collection because it leads to a 8 percent reduction in bills.

We also sought to test the impact of introducing a rule-based remote disconnection regime for consumers with high arrears. The rule-based disconnection regime was announced but was not adhered to in the field and was quickly discontinued by the utility.

Finally, although smart meters make alternative payment contracts such as pre-paid metering feasible, the utility chose not to introduce these changes alongside new metering. Thus the rollout of smart meters in our setting did not lead to improvements in revenue collection, more effective enforcement, or reduced losses.

Although this study is informative only about short-run outcomes, we conclude that unless smart meters are actively used to reform enforcement and payment practices, capital investments into the technology alone may not deliver either utility or consumer benefits

Robin Burgess, Michael Greenstone, Nicholas Ryan, Anant Sudarshan