June 23, 2023: The government has introduced two changes to the prevailing power tariff system, through an amendment to the Electricity (Rights of Consumers) Rules, 2020. Through the changes, the Centre has introduced time of day (ToD) tariff and rationalisation of smart metering provisions.
What is time of day (ToD) tariff?
In place of being charged for electricity at the same rate at all times of the day, the price you pay for electricity will vary according to the time of day. Under the ToD tariff system, rates during solar hours (duration of eight hours in a day as specified by the State Electricity Regulatory Commission) of the day will be 10%-20% less than the normal tariff. The tariff during peak hours will be 10 to 20% higher.
From April 1, 2024, the ToD tariff would be applicable for commercial and industrial consumers with demand of 10 kilowatt (kw) and more, from April 1, 2024.For all other consumers, except agricultural consumers, the new rates will come into effect latest from April 1, 2025.
Power and new & renewable energy minister RK Singh said that the ToD is a win-win for consumers as well as the power system. “The ToD tariffs comprising separate tariffs for peak hours, solar hours and normal hours, send price signals to consumers to manage their load according to the tariff. With awareness and effective utilisation of ToD tariff mechanism, consumers can reduce their electricity bills. Now, consumers can plan their consumption in order to reduce their power costs, planning more activities during solar hours when power costs are less,” said the minister.
Most SERCs have already implemented ToD tariffs for large commercial and industrial) category of consumers. ToD tariff is recognised globally across electricity industries as an important demand-side management measure which is used as a means of incentivising consumers to shift a portion of their loads from peak times to off-peak times. Various statutory provisions already exist to enable and promote implementation of ToD tariff.
What is smart metering provision?
Through the simplified rules for smart metering, the existing penalties for increase in consumer’s demand beyond the upper sanctioned load/demand are reduced. Under the amendment, after the installation of a smart meter, no penal charges will be imposed on a consumer, based on the upper limit demand recorded by the smart meter for the period before installation date.
The load revision procedure has also been rationalised in such a way that the maximum demand will be revised upwards only if sanctioned load has been exceeded at least three times in a financial year. Also, smart meters will be read remotely at least once a day and the data will be shared with consumers to enable them to take informed decisions about consumption.
What are Electricity Rules, 2020?
The Electricity (Rights of Consumers) Rules, 2020, were notified by the government on December 31, 2020. The rules seek to ensure that new electricity connections, refunds and other services are given in time-bound manner and that willful disregard to consumer rights results in levying of penalties on service providers and payment of compensation to consumers.
“The current amendment to the rules is a continuation of the measures taken by the government to empower power consumers, to ensure 24X7 reliable electricity supply at affordable cost and to maintain a conducive ecosystem for investment in the power sector,” the ministry said in a statement.
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