By DV Ramana
Consumer protection is a foundation of modern utility regulation. Electricity consumers frequently face problems relating to billing, metering, service quality, voltage fluctuations, disconnections, delays in providing new connections, and many other service-related issues. To address such needs of the consumers, the Electricity Act, 2003 mandated the establishment of Consumer Grievance Redressal Forums (CGRFs) and Electricity Ombudsman.
Accordingly, the Odisha Electricity Regulatory Commission (OERC) has published the Draft OERC (Grievance Redressal Forum and Ombudsman) Regulations, 2026. The draft introduces several welcome reforms, including multiple Ombudsman offices, online filing systems, camp courts, and improved procedural transparency. However, there are certain structural weaknesses which may hinder the objective of creating a truly independent and effective institution of Ombudsman.
The Ombudsman is expected to address disputes between consumers and distribution licensees, therefore it requires a high degree of institutional independence. Yet some provisions of the draft regulations compromise such independence. The draft regulation makes CGRF and Ombudsman dependent on the distribution licensees for office accommodation, infrastructure, vehicles, support services, and other operational requirements. Such provisions create an inherent conflict of interest. An Ombudsman whose day-to-day functioning depends on the very entities whose actions are being challenged is unlikely to inspire full confidence among consumers.
The draft regulations say the licensee shall meet the costs and expenses of the CGRF, including the establishment and staff required to assist the Forum in the discharge of the functions under these Regulations. The regulation is silent about the Ombudsman expenses. This model of dependence on the distribution licensees creates an undesirable relationship between the adjudicator and the regulated entity. The concern is the risk of regulatory or ombudsman capture. Modern regulatory theory recognizes that a regulator’s dependence on regulated entities can influence its decision-making, even in the absence of direct interference. A watchdog should not be dependent, financially or otherwise, on the entity it watches.
In that spirit, OERC should establish and administer a Consumer Grievance Redressal Corpus Fund (CGRCF) to finance the operation of CGRF and Ombudsman. Since all stakeholders benefit from a credible consumer protection system, the CGRCF should be established through contributions from the state government and all other stakeholders of the electricity sector. Such an arrangement will enhance public confidence in the impartiality of the grievance redressal mechanism.
The process of selecting the Ombudsman also has a bearing on the Ombudsman’s independence. The draft regulations continue to provide a significant role for distribution licensees in identifying and shortlisting candidates. Such an arrangement appears inconsistent with the goal of ensuring the independence of the Ombudsman.
Let the selection process be fully managed by the Odisha Electricity Regulatory Commission through an open and transparent selection process. To ensure professional rigor and credibility, the Commission may be assisted by an independent Search-cum-Selection Committee comprising of eminent academics, legal experts, public administration specialists, and professionals from the electricity sector. Universities and other academic institutions can play an important role in identifying and evaluating suitable candidates.
The effectiveness of any institution ultimately depends upon the quality of the people who serve within it. The CGRF and Ombudsman are required to resolve complex disputes involving technical, legal, financial, and regulatory issues. The position therefore demands individuals of high competence, integrity, and experience. Yet the compensation currently contemplated under the regulations appears inadequate for attracting professionals of the required caliber.
The Commission should adopt a market-driven compensation framework. Competitive remuneration should not be viewed as a cost but as an investment in institutional quality. If Odisha expects the Ombudsman to function as a credible and independent quasi-judicial institution, it must be willing to pay for professional excellence.
Modern electricity disputes often require multidisciplinary assessment. The Commission should therefore consider evolving the Ombudsman institution into a multidisciplinary body rather than a purely single-member office. A panel with legal, technical, and financial expertise would improve the quality of decision-making and strengthen public confidence in the institution.
The Draft OERC (Grievance Redressal Forum and Ombudsman) Regulations, 2026 provides an opportunity to strengthen consumer protection in Odisha’s electricity sector. In the pursuit of a robust and independent consumer redressal system, we place the following suggestions before the OERC.
First, the Ombudsman must enjoy complete financial and operational independence from distribution licensees. Second, the selection process must be fully controlled by the Commission with the assistance of an independent search mechanism rather than by the regulated entities themselves. Third, compensation must be market-based and sufficient to attract highly qualified professionals. The Commission should seize this opportunity to build an Ombudsman institution that reflects the highest standards of modern regulatory governance.
I would like to conclude with Mahatma Gandhi’s oft-quoted observation: “A customer is the most important visitor on our premises. He is not dependent on us; we are dependent on him.” The same principle applies to governance. I hope the CGRF and the Office of the Ombudsman derive their legitimacy from consumers and remain accountable to them.
The writer is a Professor at XIMB.
