New Power Tariff Rule: Consumers can save upto 20% in electricity bills | HERE is how
The Government of India has introduced two changes to the prevailing power tariff system, through an amendment to the Electricity (Rights of Consumers) Rules, 2020.
New Power Tariff Rule: Electricity consumers across the country can save up to 20 per cent in power bills by planning usage during solar hours or daytime as the government is set to implement a 'time of the day' tariff. The Government of India has introduced two changes to the prevailing power tariff system, through an amendment to the Electricity (Rights of Consumers) Rules, 2020. The changes are- the introduction of the Time of Day (ToD) Tariff and the rationalization of smart metering provisions.
Time of Day (ToD) Tariff
The 'time of the day' (ToD) tariff provides for varying rates during different times of the day and it will allow consumers to avoid electricity usage for washing clothes, cooking and other purposes during peak hours when power rates are higher. "Rather than 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, Tariff during solar hours (duration of eight hours in a day as specified by the State Electricity Regulatory Commission) of the day shall be 10%-20% less than the normal tariff, while the tariff during peak hours will be 10 to 20 per cent higher," the Ministry of Power said in a statement.
ToD tariff would be applicable for Commercial and Industrial consumers having Maximum demand of 10 KW and above, from April 1, 2024. For all other consumers except agricultural consumers, the new rule will be applicable from April 1, 2025.
For those with smart meters, ToD tariff will be effective immediately after the installation of such meters. "Government of India has introduced two changes to the prevailing power tariff system, through an amendment to the Electricity (Rights of Consumers) Rules, 2020. The changes are: introduction of Time of Day (ToD) tariff, and rationalization of smart metering provisions," a power ministry statement said on Friday.
Win-win for consumers as well as providers
According to Union Power and New & Renewable Energy Minister R K Singh, ToD tariff is a win-win for consumers as well as the electricity providers. "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," Singh said in the statement.
He explained that since solar power is cheaper, the tariff during the solar hours will be less. “During non-solar hours thermal and hydropower as well as gas-based capacity is used. Their costs are higher than that of solar power and this will be reflected in the Time of Day Tariff,” said Singh.
The Union Minister said that the ToD mechanism will also ensure better grid integration of Renewable Energy sources thereby facilitating faster energy transition for India. “The ToD tariff will improve the management of renewable generation fluctuations, incentivize demand increase during the periods of high RE generation hours and thereby increase grid integration of larger quantity of renewable power,” Singh said.
Most of the State Electricity Regulatory Commissions (SERCs) have already implemented ToD tariffs, for large Commercial and Industrial (C&I) category of consumers in the country. With the installation of smart meters, the ToD metering at the domestic consumer level will be introduced as per Tariff Policy mandate.
Rules regarding amendment
Regarding the rules regarding amendments made in the smart metering provision, the ministry stated that the government has also simplified the rules for smart metering. “To avoid inconvenience/harassment of the consumers, the existing penalties for an increase in consumer's demand beyond the maximum sanctioned load/demand have been reduced,” it said.
As per the amendment in the metering provision, post-installation of a smart meter, no penal charges will be imposed on a consumer based on the maximum demand recorded by the smart meter for the period before the installation date.
Besides, the load revision procedure has also been rationalized in a way that maximum demand shall be revised upwards only if the sanctioned load has been exceeded at least three times in a financial year.
Moreover, smart meters shall be read remotely at least once in a day and the data shall be shared with Consumers in order to enable them to take informed decisions about the consumption of electricity, the ministry statement said.
The Electricity (Rights of Consumers) Rules, 2020 were notified by the government on December 31, 2020, based on the conviction that power systems exist to serve consumers and that consumers have rights to get reliable services and quality electricity.
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.