Electric Tarrif

8/2/2019 Electric Tarrif

1/13

A TECHNICAL REPORT ON

ELECTRIC TARIFF(SUBMITTED TO DEPARTMENT OF ELECTRICAL AND ELECTRONIC ENGENEERING IN THE PARTIAL

FULFILLMENT OF ACADAMIC REQUIREMENT OF AWARD OF THE DEGREE OF)

BACHELOR OF TECHNOLOGY

IN

ELECTRICAL & ELECTRONICS ENGINEERING

BY

G.ASHWINI (08911A0216)

VIDYA JYOTHI INSTITUTE OF TECHNOLOGY

(Affiliated to JNTU)

AZIZNAGAR, C.B.POST, MOINABAD, HYDERABAD 500075


2/13

INTRODUCTION

The electrical energy produced by a power station is delivered to a large number of

customers. The customers can be persuaded to use to electrical energy if it is sold at reasonable

rates. The tariff i.e., the rate at which electrical energy is sold naturally becomes attention

inviting for electric supply company. The supply company has to ensure that the tariff is suchthat it not only recovers the total cost of producing electrical energy but also earns profit on the

capital investment. However, the profit must be marginal particularly for a country like India

where supply companies come under public sector and are always subjected to criticism. In this

paper, we shall deal with various types of tariff with special references to their advantages and

disadvantages.

TARIFF

The rate at which electrical energy is supplied to a consumer is known as tariff.

Although tariff should include the total cost of producing and supplying electrical energy

plus the profit, yet it cannot be the same for all types of consumers. It is because the cost of

producing electrical energy depends to a considerable extent upon the magnitude of electrical

energy consumed by the user and his load conditions. Therefore, in all fairness, due

consideration has to be given to different types of consumers (e.g., industrial, domestic and

commercial) while fixing the tariff. This makes the problem of suitable rate making highly

complicated.

OBJECTIVES OF TARIFF

Like other commodities, electrical energy is also sold at such a rate so that it not onlyreturns the cost but also earns reasonable profit. Therefore, a tariff should include the following

items:

1. Recovery of cost of producing electrical energy at the power station.2. Recovery of cost on the capital investment in transmission and distribution systems.3. Recovery of cost of operation of operation and maintenance of supply of electrical

energy e.g., metering equipment, billing etc.

4. A suitable profit on the capital investment.

DESIRABLE CHARACTERISTICS OF A TARIFF

A tariff must have the following desirable characteristics:

1. Proper return: the tariff should be such that it ensures the proper return from eachconsumer. In other words, the total receipts from the consumers must be equal to the cost of


3/13

producing and supplying electrical energy plus reasonable profit. This will enable the electric

supply company to ensure continuous and reliable service to the consumers.

2. Fairness: The tariff must be fair so that different types of consumers are satisfied with therate of charge of electric energy. Thus a big consumer should be charged at lower rate than a

small consumer. It is because increased energy consumption spreads the fixed charges over a

greater number of units, thus reducing the overall cost of producing electrical energy.

Similarly, a consumer whose load conditions do not deviate much from the ideal(i.e., non

variable) should be charged at a lower rate than the one whose load conditions change

appreciably from the ideal.

3. Simplicity: the tariff should be simple so that an ordinary consumer can easily understand it.A complicated tariff may cause an opposition from the public which is generally

distrustful of supply companies.

4. Reasonable profit: the profit element in the tariff should be reasonable. An electric supplycompany is a public utility company and generally enjoys the benefits of monopoly.

Therefore, the investment is relatively safe due to non-competition in market. This calls for

the profit to be restricted to 8% or so per annum.

5. Attractive: the tariff should be attractive so that a large number of consumers are encouragedto use electrical energy. Efforts should be made fix the tariff in such a way so that consumers

can pay easily.

TYPES OF TARIFF

There are several types of tariff. However, the following are the commonly used

types of tariff:

1. Simple tariff:When there is a fixed rate per unit of energy consumed, it is called a simple tariff

or uniform rate tariff.

In this type of tariff, the price charged per unit is constant i.e., it does not vary

with increase or decrease in number of units consumed.

The consumption of electrical energy at the consumers terminals is recorded by means

of an energy meter. This is the simplest of all tariffs and is readily understood by the

consumers.

Disadvantages

(i) There is no discrimination between different types of consumer since everyconsumer has to pay equitably for the fixed charges.

(ii) The cost for unit delivered is high.


4/13

(iii) It does not encourage the use of electricity.2. Flat rate tariff:

when different types of consumers are charged at different uniform per unit rates, it is

called a flat rate tariff.

In this type of tariff, the consumers are grouped into different classes and each class ofconsumers is charged at a different uniform rate. For instance, the flat rate per kWh for lighting

load may be 60 paise, where it may be slightly less (say 55 paise per kWh) for power load. The

different classes of consumers are made taking into account their diversity and load factors. The

advantage of such a tariff is that it is more fair to different types of consumers and is quite simple

in calculations.

Disadvantages:

(i) Since the flat rate tariff varies according to the way the supply is used, separatemeters are required for lighting load, power load etc. This makes the applicationof such a tariff expensive and complicated.

(ii) A particular class of consumers is charged at the same rate irrespective of themagnitude of energy consumed. However a big consumer should be charged at a

lower rate as in his case the fixed charges per unit are reduced.

3. Blockrate tariff

When a given block of energy is charged at a specific rate and the succeeding blocks of

energy are charged at progressively reduced rates, it is called a block rate tariff.

In block rate tariff, the energy consumption is divided into blocks and price per unit is fixedin each block. The price per unit in the first block is the highest and it is progressively

reduced for the succeeding blocks of energy. For example, the first 30 units may be charged

at the rate of 60paise per unit: the next 25 units at the rate of 50 paise per unit and the

remaining additional units may be charged at the rate of 30 paise per unit.

The advantage of such a tariff is that the consumer gets an incentive to consume more

electrical energy. This increases the load factor of the system and hence the cost of

generation is reduced. However, its principal defect is that it lacks a measure of the

consumers demand. This type of tariff is being used for majority of residential and small

commercial consumers.

4. Two-part tariffWhen the rate of electrical energy is charged on the basis of maximum demand of

the consumer and the units consumed, it is called a two part tariff.

In a tariff, the total charges to be made from the consumer are split into two components viz.,

fixed charges and running charges. The fixed charges depend upon the maximum demand of the


5/13

consumer while the running charges depend upon the number of units consumed by the

customer. Thus, the customer is charged at a certain amount per kW of maximum demand plus a

certain amount per kWh of energy consumed i.e.,

Total charges = Rs (b x kW+ c x kWh)

b = charges per kW of maximum demand

c = charges per kWh of energy consumed

This type of tariff is mostly applicable to industrial consumers who have

appreciable maximum demand.

Advantages:

(i) It is easily understood by the consumers.(ii) It recovers the fixed charges which depend upon the maximum demand of the

consumer but are independent of the units consumed

Disadvantages:(i) The consumer has to pay the fixed charges irrespective of the fact whether hehas consumed or not consumed the electrical energy.

(ii) There is always error in assessing the maximum demand of the consumer.5. Maximum demand tariff

It is similar to two part tariff with only difference that the maximum demand is

actually measured by installing maximum demand meter in the premises of the consumer.

This removes the objection of two part tariff where the maximum demand is assessed

merely on the basis of the rate able value. This type of tariff is mostly applied to big

consumers. However, it is not suitable for a small consumer (e.g., residential consumer)

as a separate maximum demand meter is required.6. Power factor tariff

The tariff in which power factor of the consumers load is taken into

consideration is known as power factor tariff.

In a.c. system, power factor plays an important role. A low power factor

increases the rating of station equipment and line losses. Therefore, a customer having

low power factor must be penalized. The following are the important types of power

factor tariff

(i) kVA maximum demand tariff: It is a modified form of two part tariff. In this

case, the fixed charges are made on the basis of maximum demand in kVA and not in

kW. As kVA is inversely proportional to power factor, therefore, a consumer having low

power factor has to contribute more towards the fixed charges. This type of tariff has the

advantage that it encourages the consumers to operate their appliances and machinery at

improved power factor.

(ii)Sliding scale tariff: This is also known as average power factor tariff. In this

case an average power factor, say 0.8 lagging is taken as reference. If the power factor of

the consumer falls below this factor, suitable additional charges are made. On the other


6/13

hand, the power factor is above the reference, a discount is allowed to the consumer

(iii)kW and kVAR tariff: In this type, both active power(kW) and reactive power

(kVAR) supplied are charged separately. A consumer having low power factor will draw

more reactive power and hence shall have to pay more charges.

7. Three part tariffWhen the total charge to be made from the consumer is split into three parts viz.,

fixed charge, semi fixed charge and running charge, it is known as three part tariff.

i.e.,

Total charge = Rs (a+bxkW+cxkWh)

a = fixed charge made during each billing period. It includes interest and

depreciation on the cost of secondary distribution and labor cost o f collecting

revenues.

b = charge per kW of maximum demand,

c = charge per kWh of energy consumed.It may be seen that by adding fixed charge are consumers charge (i.e., a) to two part

tariff, it becomes three part tariff. The principal objection of this type of tariff is that the

charges are split into three components. This type of tariff is generally applied to big

consumers.

Analog energy meter Digital nano energy meter

The amount is collected from a consumer based on energy meter reading. Previously there was

lot of errors in readings of analog energy meters. At present the usage of digital energy meters

are eco friendly and accurate.


7/13

(Standard Rates & Charges) Up

1. DOMESTICSUPPLY (Load less than 5 KW):

(a) Type of consumers:

Power supply to single private houses or residential flats for lights, fans, domestic pumpingsets, household appliances like TV, Radio, refrigerator and other appliances used for

domestic purposes at Single point at Single Phase, Low Tension for connected load up to 2KW and 2/3 phase medium voltage for connected load above 2 KW but less than 5 KW.

(b) Nature of Supply :Low Tension A.C., 400/230 volts, 2/3 phase, 50 Cycles/sec. (Hz).

(C) Rate (Tariff)

KWH (Unit) per month Rate per kwh (Unit)

(i) First 100 Units Rs. 2.60 p.(ii) Next 100 Units Rs. 2.90 p.

(iii) Above 200 Units Rs. 3.20p.

(d) Monthly Minimum Charge under normal condition when the Meter is working:(i) Rs 124.80 per month per consumer for connected load slab 0 Watt to 500 Watts.-48 units

(ii) Rs. 189.80 per month per consumer for connected load slab 0 Watt to 2000 Watts.- 73units

(iii) Rs. 405.00 per month per consumer for connected slab 0 watt to 5000 Watts.- 150 units

(e) Important conditions of supply:

Where supply to the consumer has been given without a meter for any reason the consumer

shall pay the following slab wise flat rate per month as given below:(i) Rs. 208/- per month per consumer for connected load slab 0 watt to 500 Watts - 80 units(ii) Rs. 318/- per month per consumer for connected load slab 0 Watt to 2000 Watts - 120

units(iii) Rs. 678/- per month per consumer for connected load slab 0 Watt to 5000 Watts - 240

units

2.COMMERCIAL AND NON-DOMESTICSUPPLY (Load up to 10kw):

(a) Type of consumer:

Supply of energy for lights, fans, heating and power appliances etc. in commercial

establishment such as shops, show rooms, business houses, hotels, restaurants, banks, petrolpumps service station.

(b)Nature of supply :

Low Tension A.C. 400/ 230 Volts 2/3, Phase / Single Phase, 50 Cycles/ Sec. (Hz).(c) Rate (Tariff) :

All consumption Rs.3.00 p per KWH (Unit).(d)Monthly minimum Charges under normal condition when the meter is working:

(i) Rs.154.80/- per month per consumer for connected load slab 0 Watt to 500 Watts. 52units.


8/13

(ii) Rs.388.80/- per month per consumer for connected load slab 0Watt to 1000 Watts.130units.

(iii) Rs.855.00/-per month per consumer for connected load slab 0Watt to 10000Watts. 285units.

(e)Important conditions of supply:

(i) Where supply to the consumer has been given without a meter for any reason the consumershall pay the following slab wise flat rate as given below:-

(a) Rs. 258- per month per consumer for connected load slab 0 Watt to 500 Watts. 86 units.

(b) Rs. 648/-per month per consumer for connected load slab0 Watt to 400 Watts. 216 units.

(c) Rs.1425/-per month per consumer for connected load slab 0 Watt to 1000 Watts.475units.

(ii) If the connected load of the consumer under this category is above 10 KW the consumer

shall be classified under Bulk supply .

3.INDUSTRIESSUPPLY:

3.1COTTAGE & SMALL INDUSTRIES.(Load up to 10 KW):

(a) Type ofconsumer:

Power supply to Industries, such as small scale industries like Workshop, for fabrication ofsteel/iron structures ,body building of motor vehicles, welding, lathe machines, etc, rural

industrial load , agricultural load e.g. rice / wheat thrashers including pumps (other than forirrigation ),etc. with connected load up to 6 KW supplied at Single point at 230 Volts .Single

Phase and with connected load upto10 KW supplied at Single Point at 400 Volts 3 phase.

(b) Nature of supply:

Low Tension A.C.400/230 Volts,2/3 phase, Single Phase, 50 Cycles/Sec. (Hz).

(c) Rate (Tariff) :

All consumption :Rs. 2.85p.per KWH (Unit)

(d) Monthly minimum charges under normal condition when the meter is working :-Rs.148.20p. per KW of the contract demand per month. 52 units/ KW.

(e) Important conditions of supply :-

(i) Where supply to the consumer shall pay the flat rate of Rs.250.80p. per KW per month ofthe contract demand.(88 Unit/KW)

(ii) The consumer shall install L.T. shunt capacitor of appropriate ratings to maintain PowerFactor of its load at not less than 85%.

3.2 MEDIUM INDUSTRIES :(Load above 10 KW & less then 50KW)

(a)Type ofconsumer :All types of industrial loads like saw mills, rice mills, other industrial workshops, etc. having

contract demand of above 10KW and less then 50KW supplied at Single Point at 400volt3phase.


9/13

(b)Nature of supply:

Low Tension A.C.400 volts.3 Phase,50 Cycles Sec.(HZ) or 11 KV high tension supply:

(c)Rate (Tariff):

All consumption: Rs 3.00p. per KWH (Unit)

(d)Monthly MinimumCharges under normal condition when the meter is working.

Rs. 204.00p per KW of the contract demand per month.68units/KW

(e)Important conditions of supply:-

(i) Where supply to the consumer has been given without a meter for any reason the

consumer shall pay the flat rate of Rs.342.00p(114 Units/KW) per KW per month of thecontract demand.

(ii) The consumer shall install L.T. shunt capacitor of appropriate rating to maintain PowerFactor of its load at not less than 85%.

(iii) A concession @ 7.5 % on the energy consumption will be allowed since the powersupply is taken at 11.KV,3 Phase. This concession cannot be applied so as to bring the

charges below the monthly minimum charges/ flat rate.

3.3 LARGEINDUSTRIES(Load of 50 KW and above ):

(a)Type ofconsumer:-

All types of industrial loads having contract demand of 50KW and above supplied at Single

Point at 33KV or 11KV or 400volts, 3 Phase .

(b)Nature of supply:-High Tension A .C.,33KV or 11KVor 400 Volts, 3 phase 50 Cycles/Sec. (Hz).

(c)Rate (Tariff):

Demand Charges @ Rs.74 /-per KW of 60 %of the contract demand per month. PLUSEnergy Charges@ Rs.3 .50p.perKWH (Unit).

(d)Monthly MinimumCharges under normal condition when the meter is working:Demand Charges @Rs.74/-KW of 60%of the contract demand per month. PLUSEnergycharges @ Rs. 238.00p per KW of the contract demand per month.


(i) Where supply to consumer has been given a meter for any reason the consumer shall paythe flat rate of Rs 399.00 per KW of the contract demand per month as energy charges plus

the demand charges.

5.PUBLIC WATERWORKSAND SEWAGE PUMPING:-

5.1SMALL INSTALLATIONS(Load less than 100 KW):-

(a)Type ofconsumer :-Small installations with contract demand less than 100 KW supplied at Single Point at 11 KV

or 400 Volts.3 Phase or at 230 Volts. Single phase for public water supply and sewagepumping installations owned and operated by the State Government, Local bodies and other

parties.


10/13

(b)Nature of supply:-

Low tension A.C.,400/230 volts, 3 phase/single phase,50 cycles/sec (Hz)or11 Kv Hightension.

(c)Rate (Tariff):

All consumption: Rs.3.50p per KWH (Unit).

(d)Monthly MinimumCharges under normal condition when the meter is working:Rs.339.50p per KW of contract Demand per month 97 units /KW


(i) Where supply to the consumer has been given without a meter for any reason theconsumer shall pay the flat rate of Rs.567.00p(162 Units/KW) per KW of the contract

demand per month.(ii) The consumer shall install L.T. shunt capacitor of appropriate rating to maintain power

factor of its load at not less than 85%.(iii) A concession @7.5% on the energy consumption will be allowed since the power supply

is taken at 11KW. This concession can not be applied so as to bring the charges bellow themonthly minimum charges/flat rate .

5.2 LARGEINSTALLATIONS (Load of 100 KW and above):

(a)Type ofconsumer:Large installations with contract demand of 100 KW and above supplied at Single point at 11

KW, 33KV or 400 Volt 3 phase for the public water supply and sewage pumpinginstallations owned and operated by the State Government Local bodies and other parties.

(b)Nature of supply :

High tension A.C.11KV, 33KV or 400Volt,3 Phase, 50 Cycles/ Sec. (Hz).

(c) Rate (Tariff):

Demand Charges @Rs.74/-per KW of 60% of the contract demand per month. P L USEnergy charges@ Rs.3.50 per KWH (Unit)

(d) Monthly Minimumcharges under normal condition when the meter is working :Demand charges Rs. 74/- per KW of 60 % of the contract demand per month. PLUS

Minimum charges @ Rs.339.50p(97 Units/KW) per KW of the contract demand per month.

(e) Important conditions of supply :( i ) Where supply to the consumer has been given without a meter for any reason the

consumer shall pay the flat rate of Rs.567.00p162 units/KW per KW contract demand permonth plus the demand charges.

(ii ) The consumer shall install L.T. shunt capacitor of appropriate rating to maintain Power

Factor of its load at not less than 85%.( iii ) A concession @7.5%on the energy consumption will be allowed since the powersupply is taken at 11KVor 33Kv Phase. This concession cannot be applied so as to bring the

charges below the monthly minimum charges/flat rate.(iv ) If the consumer draws more than the contract demand the tariff of the excess demand

will be double the normal rate.


11/13

6.BULK SUPPLY (Load above 10KW ):-

(a)Type ofconsumer:General or mixed loads of MES and Military establishments, Hospitals, Departmental

colonies, Raj Bhawan ,Railway Stations, Public Transport-yards ,air-conditioned cinemas,

Office Buildings, Large construction projects and such other similar consumers, residentialcolonies for industries/factories, etc. where further distribution is to be done by the consumeritself, having contract demand of mixed load above 10 KW.

(b)Nature ofSupply:

High Tension A.C.,11KVor 33KVor Low Tension,400/230 volts,3 Phase/Single Phase,50Cycles/Sec.(Hz) at Single point .

(c) Rate (Tariff):

Demand Charges @ Rs.74/-per KW of 60%of the contract demand per month. PLUSEnergy

Charges @ Rs 3.50p per KWH (Unit).

(d)Monthly MinimumCharges under normal condition when the meter is working:

Demand Charges @ Rs.74/- per KWof 60%of the contract demand month. PLUSMinimumcharges @ Rs273.00p( 78 units/Kw) per K.W of contract demand per month.


(i) Where supply to the consumer has been given without a meter for any reason theconsumer shall pay the flat rate of Rs.458.50p (131 units/KW) per KW of the contract

demand per month as energy charges plus the demand charge.(ii) A concession @ 7.5% on the energy consumption will be allowed since the power

supply is taken at 11 KV or 33KV. This concession cannot be applied so as to bring thecharges below the monthly minimum charges/flat rate.

(iii) If the consumer draws more than the contract demand, the tariff of the excess demandwill be double the normal rate.

7. PUBLIC LIGHTINGSUPPLY:-

(a)Type ofconsumer:-Street lights owned by Municipalities, Bazar Boards, Panchayats and other Institutions, Local

Bodies, Clubs, etc, on public roads, streets and thoroughfares including parks, Markets,Vehicle stands, bridges and for traffic signaling.

(b)Nature ofSupply:-

Low Tension A.C.,400/230 Volts,1/2/3 phase, 50 Cycles/Sec. (Hz), at Single Point.

(c)Rate ( Tariff) :-All types of lamp : Rs. 3.50 per KWH (Unit).

(d)Monthly MinimumCharges under normal condition when the meter is working:-

(i) SON lamp : Rs. 322.00p per lamp of 250 Watts. Maximum per month.(92 Units/ Sonlamp)

(ii) Other lamp : Rs. 126.00p per lamp per 100 Watts. Maximum per month.(36 Units/ otherlamp)


(i) Where supply to the consumer has been given without energy meter for any reason the


12/13

consumer shall pay the minimum charges.

(ii) Where the cost of installation of fittings is borne or paid by the consumer or private localbody or club, the responsibility for maintenance including renewal and replacements of any

kind rests with the consumer.(iii) Where the cost of fittings is borne or paid by the consumer other than private local

bodies and clubs, the consumer shall have to pay the annual maintenance charges @ 3% ofthe installations, cost of the Electricity Department every year provided that the Department

entrusted with the maintenance of such fittings.

8.TEMPORARY SUPPLY:-

(a)Type ofConsumer :-

(i) All consumers for marriage, religious festivals or personal/ private festivals, etc,. butincluding any temporary/touring cinema or any establishment setting entertainment shows.

For light, fan, water pump, etc,. and for supply to all categories of consumers other thanirrigation and agriculture.

(ii) For supply of energy to Irrigation and Agricultural purposes.(b)Nature of supply :

Low Tension A.C. 400/230 volts., 3 Phase/Single Phase, 50 Cycles / Sec. (Hz) at SinglePoint supply.

(c) Monthly energy charges under normal condition when the meter is working :

For (a) (i) :-

(i) Domestic/ Non -domestic Rs. 400/-per KW or part thereof per month or part thereof.

(ii) Industrial /Water Works Rs. 400/-per KW or part thereof per month or part thereof.

For (a) (ii) :-

Irrigation and Agriculture. Rs. 100/- per KW or part thereof per month or part thereof

(d) Important Condition ofSupply :

(i) Service charges for temporary supply shall be Rs. 100/- per connection in the case of LowTension A.C.,230 volts, Single Phase and Rs. 200/- per connection in the case of Low

Tension A.C., 400 volts.,3 Phase.(ii) Service charges plus the monthly energy charges for the period of temporary supply shall

be paid in advance.(iii) The cost of materials required for temporary supply of energy shall be borne by the

consumer.

9. Operation &Maintenance Charge (for Load ofall types under deposit scheme):-

(a) Type ofConsumer :

(i) Domestic Supply,

(ii) Commercial and Non- Domestic supply,(iii) Industrial Supply,

(iv) Irrigation & Agricultural supply,(v) Public Water Works& Sewage Pumping supply.

(vi) Bulk Supply; supplied at 33 KV/11 KV / 400V / 230 V.


13/13

An electricity bill of a consumer showing his energy profile.

References:

1. Principles of power systems by V.K.Mehta2. Power system engineering by Dhanpat rai & co3. www.wikipedia.com

Documents

Electric Tarrif