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Time of Day power tariff: Why you may have to pay higher electricity bills

The latest amendment to tariff rules by the Ministry of Power is expected to impact the electricity bills of consumers in India. Here's how the bills will change

New electricity tariff rules

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BS Web Team New Delhi

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The Centre last week introduced two changes to the prevailing power tariff system by amending the Electricity (Rights of Consumers) Rules, 2020. These changes are likely to have an impact on the electricity bills of customers across the country. Moreover, the new provisions will also simplify rules around smart meters.

How will your electricity bills change with the new rules?

The Ministry of Power on June 23 announced the introduction of the Time of Day (ToD) tariff. Under this, the users will not be charged for electricity consumption at the same rate at all times of the day. The prices will vary according to the time of day.

During the solar hours, which are eight hours in the day specified by the State Electricity Regulatory Commission in every state, the tariff charged will be 10 to 20 per cent lower than normal.

During peak hours, however, the tariff will be 10 to 20 per cent higher. For normal hours, the tariff will remain the same.

In a statement, power minister RK Singh said, "Since solar power is cheaper, the tariff during the solar hours will be less, so the consumer benefits."

"During non-solar hours thermal and hydropower as well as gas-based capacity is used – their costs are higher than that of solar power – this will be reflected in ToD tariff," he added.

He also said that the ToD mechanism would ensure better grid integration of renewable energy sources helping in a faster transition. 

Also Read: Consumers can save upto 20% in electricity bills with new power tariff rule

The move is expected to help India work towards its target of achieving 65 per cent of its energy capacity from non-fossil fuels by 2030 and net zero emissions by 2070.

For whom the electricity bills will change?

ToD tariff would be applicable for commercial and industrial consumers having maximum demand of 10 KW and above. It will also apply to all other consumers except those using electricity for agriculture.

When will the electricity bills change?

For commercial and industrial consumers, the new charges will be effective from April 1, 2024. For all other consumers, they will be applicable from April 1, 2025.

For people with smart meters, the Time of Day tariff will be made effective immediately after installation.

What will change for people with smart meters?

Under the new smart metering rules, the penalties for increasing consumer demand beyond the maximum sanctioned load have been reduced.

As per the amendment, after installing a smart meter, no penal charges will be imposed on a consumer based on the maximum demand recorded by the meter for the period before the installation date.

Moreover, the maximum load shall be revised only if the sanctioned load has been exceeded at least thrice in a financial year.

Also, smart meters will be read remotely at least once a day, and the data shall be shared with consumers to enable them to make "informed decisions about the consumption of electricity".

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First Published: Jun 27 2023 | 1:27 PM IST

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