Additional Security Deposit (ASD) notice from your ESCOM: why it comes and what you can do

What the deposit is for

Electricity is billed after you use it. The ESCOM holds a security deposit so that if a consumer leaves without paying, it is covered. You paid the first deposit when the connection was given. Each year the ESCOM checks whether that deposit still matches your current bills. If your bills have gone up, it asks for the difference: the Additional Security Deposit.

Two things to keep in mind. First, the money is still yours: it earns interest every year and comes back when the connection is closed. Second, the deposit follows the bill, not the house. A small house with two ACs and an electric geyser can need a bigger deposit than a large house that uses little power. That is also why the ASD often arrives in the same year a family buys its first AC, or a shop adds a cold storage unit.

What KERC's regulations say

The rules are in the KERC (Security Deposit) Regulations, 2007 and their amendments, with interest under KERC's interest-on-security-deposit regulations. The key points from the regulation text:

• Annual review. The ESCOM reviews every consumer's deposit in the first quarter of each financial year (April to June), based on the average consumption of the previous year.
• Level required. The deposit should equal the average bill for two months if you are billed monthly (three months for bi-monthly billing), calculated on the previous year's consumption. KERC writes this as "2 MMD".
• When ASD can be asked. Only if the deposit you hold falls short of that level.
• Refund. If the deposit held is more than 120% of that level, the ESCOM must refund the amount above 120%. If it delays the refund, the regulation provides penal interest of 1% per month to the consumer.
• Notice. Where ASD is demanded, the ESCOM must give at least 30 days' notice with the details.
• Interest. The ESCOM pays interest on your deposit at the RBI Bank Rate as on 1 April of the year. Interest for a year is credited to your account in the first quarter of the next year and adjusted against your bills.

A worked example

Assume monthly billing. The figures are only for illustration.

House A added an AC and a geyser. House B's family moved out for half the year. Many people only know the first column exists. The second is just as much part of the regulation.

Why the notice came to you

• Your consumption went up: a new AC, geyser, pump, more family members, a home office.
• The tariff went up. The same units cost more, so the two-month bill is higher.
• Load enhancement. Higher sanctioned load means higher fixed charges. See load enhancement.
• Your deposit was very old. Deposits paid years ago at old tariffs are small.
• A one-off high year due to a leak, a faulty meter or a construction phase. If the cause was a billing error, get the bill corrected first, then ask for the ASD to be recalculated.

A practical point: BESCOM has said in the past that it raises ASD only when the shortfall is above a minimum. Citizen Matters reported ₹200 for domestic and ₹1,000 for commercial connections. Check whether that still applies.

Paying it, instalments and disconnection

• How to pay. ASD usually appears on the bill and is paid with it, online or at the counter. BESCOM's online payment also offers an ASD option against the account ID.
• Instalments. The KERC regulation text we could find does not set out an instalment right for domestic ASD. Some other states' regulations do allow it. If the amount is large, give a written request to the AEE of your subdivision. Don't assume it will be granted.
• If you don't pay. As reported by Deccan Herald in 2024, BESCOM said KERC guidelines allow disconnection when bills or ASD are not paid within the set time. Don't ignore it.
• If you think it is wrong. Ask in writing for the calculation: average consumption used, months taken, deposit held. Errors happen when a previous owner's deposit was not carried over at name transfer, or when an estimated-bill period inflated the average. If the reply is not satisfactory, use the CGRF and Ombudsman route.

Checking an ASD demand yourself

You do not need the ESCOM's software to see whether an ASD is roughly right. Old bills are enough.

1. Collect last financial year's bills, April to March. The ESCOM app's bill history has them if the paper copies are lost.
2. Add up the bill amounts for the year, leaving out arrears, interest, any earlier ASD and other one-off lines. Divide by 12 for the monthly average. For example, ₹14,400 for the year gives ₹1,200 a month.
3. Double it for monthly billing. Here the required deposit is about ₹2,400.
4. Find the deposit held on the bill or in the app. If it is ₹1,500, the shortfall of about ₹900 is the ASD you should expect.

The ESCOM works from your consumption at the current tariff, so its figure can differ a little from yours. A large difference usually has one of these causes:

• Estimated months that billed more units than you used. Get those bills corrected first; our meter guide shows how to check readings.
• A one-off spike from a leak, a faulty geyser or construction work. Our appliance units guide helps you show what your normal use is.
• Deposit shown as zero or too low after a name transfer or a meter change.
• Gruha Jyothi months, where the subsidy may or may not have been counted. Ask how the average was worked out. The scheme rules are in our Gruha Jyothi guide.

If the ASD is right, pay it with the bill through the channels in our bill payment guide. If not, write to the subdivision with your working attached.

Getting money back

There are two kinds of refund. People often mix them up.

1. Excess refund during the connection. If the deposit held is more than 120% of the required level after the annual review, the excess should be refunded. In practice it is usually adjusted in bills. If you see no adjustment after your use clearly dropped (for example, solar installed, family moved), write to the subdivision quoting the KERC Security Deposit Regulations.
2. Final refund on closing the connection. When you permanently disconnect, the full deposit and any pending interest is refunded after final dues are set off. Keep the deposit receipts, or at least old bills that show the deposit held.

How to see what deposit you hold. The bill details page in your ESCOM app, and many printed bills, show the security deposit held against your account and any ASD demanded. If they don't, ask the subdivision for a deposit statement. Do this especially after buying a house. At name transfer the existing deposit normally stays with the connection, but agree with the seller in writing who gets the benefit, and check that the deposit figure after transfer is not shown as zero. A zero deposit means a large ASD next April.

Questions we hear at the counter: "I paid ASD last year, why again?" Because the review is yearly, and a tariff rise alone can raise the two-month figure. "My bill is zero under Gruha Jyothi, why ASD?" Ask for the calculation, as explained above. "The house was empty, can I get money back?" Yes, if the deposit is now above 120% of the required level, the excess should be refunded or adjusted. Ask in writing if it does not happen by the next review.

Installed rooftop solar and your import dropped? Your deposit should come down over time too. See our rooftop solar guide.

Questions

Sources

Rules and figures in this article were checked against these sources on 30 Sep 2026. Schemes and tariffs change, so confirm with the official office before you act.

• Indian Kanoon: KERC (Security Deposit) Regulations, 2007, Section 6
• Scribd: KERC interest on security deposit regulations
• Citizen Matters: Additional Security Deposit for BESCOM, FAQ
• Office of K J George on X: BESCOM clarification on ASD and interest
• Deccan Herald: Bescom to snap connections if dues not cleared within 30 days

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