INTRODUCTION Tariff Objective Factors

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1 TARIFF

2 INTRODUCTION Tariff is the schedule or rates framed for supply of electrical energy to various consumers. Objective is to distribute the equitably the cost of generation amongst various consumers so as to recover cost of capital invested, cost of operation & maintenance, cost metering & billing and sufficient return on the total capital investment. Factors considered in framing Tariff are Proper return is secured to meet objectives of electric supply. Consumers encouraged to make extended use of electricity. Simple and understandable. Consumer penalized for poor power factor. Consumers encouraged to use power during off peak hours.

3 INTRODUCTION Govt. Policy welfare policy of govt. does not allow charging higher rates from domestic consumers electricity basic necessity. Agriculture loads cannot be charged at higher rates - govt. concern for agriculture production.

4 FLAT DEMAND TARIFF Earliest form of tariff. Total demand and energy consumption are fixed. If demand Rs. a per load & x nos load per customer then Energy charge = Rs. a x. Here cost metering equip. collection of meter reading and accounting cost eliminated overall decrease in cost. Does not consider the duration a load is connected. It encourages consumers to keep their load connected even when not required. Hence used for street lighting, signal system, sign lightningenergy can be predicted

5 SIMPLE TARIFF Cost of energy is charged on basis of units charged. Unit cost = Annual fixed cost + annual oper. Cost total nos. unit supplied per annum Simple to understand and apply. No discrimination between customers having different load factor, diversity factor and pf. Cost per kwh higher. Modifications : Discount for consumers of more electricity. Special tariff for domestic cons. Low load factor and at peak hours. Discount for consumption at off peak hours.

6 FLAT RATE TARIFF Different types of consumers charged at different flat rates light fan loads are charged at slightly higher rate than power loads. If energy consumed in billing period is x units and rate for category is Rs a then usages charge is Rs. (xa). Considering the load factor and diversity factor the flat rate for each type is determined. Disadvantage: separate meter reqd. for each load. Difficult to derive load factor and diversity factor for various types of loads. Same rate for total energy consumed irrespective of magnitude of energy consumed increased generation.

7 STEP RATE TARIFF It is a group of flat rate tariffs of decreasing unit charges for higher consumption. Rs 5/unit if consump don t exceed 50units. Rs 4/unit if consp. exceed 50units but less 100 units. Takes into account the fact of lower generation cost for higher energy consumption Improvement of load factor. Disadvantage : tendency of consumers to cross over to next block to claim lower rate.

8 BLOCK RATE TARIFF A given block of unit charged at higher rate & succeeding blocks charged at progressively reduced rates. Consumer gets incentive for consuming more increase in load factorlower generation cost. DISADVANTAGE :It lacks in incorporating the DISADVANTAGE :It lacks in incorporating the consumers demand in the tariff.

9 MODIFIED BLOCK RATE It is a block rate with progressively higher rates for subsequent blocks.

10 TWO PART TARIFF Total charge has two components fixed charge and running charge. Fixed charge proportional to maximum demand total combined kw rating of the premises, independent of energy consumed. Running charge made at certain amount per kwh (units) for total energy consumed. Total charge = Rs (a x kw + b x kwh) where Rs a per kw of max. demand Rs b per kwh of energy consumed. Applicable for medium industrial consumers. Adv. Fixed charges of generation recovered separately and operating cost recovered separately charging is more transparent & effective. Disadv. Consumer pays fixed charges even if he does not consume electricity for a period.

11 MAXIMUM DEMAND TARIFF This is also a two part tariff but here the maximum demand is actually measured by a max. demand indicator or meter. Drawback of two part tariff removed. This is applied to all bulk and large industrial consumer. Advantage: induces the customer to keep the maximum demand low.

12 POWER FACTOR TARIFF The efficiency of plant and other equipments depends on the power factor. Hence following tariffs are used to maximize pf. kva MAXIMUM DEMAND TARIFF It is also a two part tariff. But instead of max. kw demand max. kva demand is measured. This tariff encourages consumers to operate at lower kva demand hence at higher pf.

13 POWER FACTOR TARIFF kwh and kvarh Tariff It is again a two part tariff in which kwh and kvarh are measured and charged separately. It induces the customer to reduce the kvarh hence the pf is improved.

14 POWER FACTOR TARIFF SLIDING SCALE or AVG. PF TARIFF An avg. pf is considered say 0.8 is considered as reference. For every, say 0.01, fall in avg. pf below the reference a surcharge is applied. For every, say 0.01, rise in avg. pf above the reference a discount is provided. Not a popular tariff.

15 THREE PART TARIFF The total charge is made up of three parts: Fixed charges based on cost of connection, office and service expenses like accounting metering etc. Semi-fixed charges based on kw or kva demand recovers capacity cost of plant. Variable charges based on the nos of units of energy consumed recovers the operating cost like cost of fuel. Total charges = Rs ( a + b kw + c kwh) Where a = const charge for billing period. b=charge in Rs. Per kw metered max. demand. c= charge in Rs. Per unit of electricity consumed.

16 OFF PEAK TARIFF Discount are provided for consumption during off peak hours. Units may be priced at discounted rate this energy can be supplied without incurring any additional costs. This can be combined with some of the previously This can be combined with some of the previously discussed tariff.

17 INTRODUCTION

18 INTRODUCTION

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