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New electricity tariff rules to make bills cheaper during solar hours

Tariffs during solar hours of the day will be 10-20% lower than the normal tariff, said the Ministry of Power

New electricity tariff rules

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BS Web Team New Delhi

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The Centre on Friday passed an amendment to the Electricity (Rights of Consumers) Rules, 2020, to make two significant changes to the current power system. These changes are related to the implementation of the Time of Day (ToD) Tariff system and the rationalisation of smart metering provisions.

In the Time of Day (ToD) Tariff system, rather than being charged the same rate for electricity at all times of the day, the price you pay for electricity will vary according to the time of day.

Tariffs during solar hours (the eight hours specified by the State Electricity Regulatory Commission) of the day will be 10 to 20 per cent lower than the normal tariff, while tariffs during peak hours will be 10 to 20 per cent higher.

ToD tariffs would be applicable to commercial and industrial consumers with a maximum demand of 10 KW or higher beginning April 1, 2024, and to all other consumers except agricultural consumers beginning April 1, 2025, said the Ministry of Power in a press release.

Time of Day tariff shall be made effective immediately after the installation of smart meters, it added.

'ToD is win-win for consumers, power system'

Union Power and New and Renewable Energy Minister R K Singh stated 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 the ToD tariff mechanism, consumers can reduce their electricity bills. Since solar power is cheaper, the tariff during the solar hours will be less, so the consumer benefits," the minister said.

"During non solar hours thermal and hydro power as well as gas based capacity is used – their costs are higher than that of solar power – this will be reflected in Time of Day Tariff. Now consumers can plan their consumption in order to reduce their power costs – planning more activities during solar hours when power costs are less," he added.

How will ToD be beneficial?

The ToD mechanism is expected to improve grid integration of renewable energy sources, allowing India to achieve a faster energy transition.

"The ToD tariff will improve the management of renewable generation fluctuations, incentivise demand increase during periods of high RE generation hours, and thus increase grid integration of a larger quantity of renewable power," RK Singh said.

The majority of State Electricity Regulatory Commissions (SERCs) in the country have already implemented ToD tariffs for large commercial and industrial (C&I) consumers. ToD metering at the domestic consumer level will be implemented with the installation of smart metres in accordance with the Tariff Policy mandate.

What is the ToD tariff?

The Time of Day (TOD) tariff is recognised globally across the electricity industries as an important Demand Side Management (DSM) measure that is used to incentivise consumers to shift a portion of their loads from peak to off-peak times, thereby improving the system load factor by reducing demand on the system during peak periods.

Rules for smart metering

The rules for smart metering have also been simplified by the Centre. To avoid inconvenience to the consumer, the existing penalties for increase in consumer’s demand beyond the maximum sanctioned load or demand have been reduced.

According to the amendment in metering provision, no penal charges will be imposed on a consumer following the installation of a smart metre based on the maximum demand recorded by the smart metre for the period preceding the installation date, said the ministry

The load revision procedure has also been rationalised so that maximum demand is only revised upwards if the sanctioned load is exceeded at least three times in a fiscal year, it said.

Furthermore, smart metres must be remotely read at least once per day, and the data must be shared with consumers in order for them to make informed decisions about their electricity consumption, the ministry added.

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First Published: Jun 23 2023 | 2:39 PM IST

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