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: introduction of Time of Day (ToD) Tariff, and rationalization of smart metering provisions.
Introduction of Time of Day (ToD) Tariff
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 percent higher. ToD tariff would be applicable for Commercial and Industrial consumers having Maximum demand of 10 KW and above, from 1st April, 2024 and for all other consumers except agricultural consumers, latest from 1st April, 2025. Time of Day tariff shall be made effective immediately after installation of smart meters, for the consumers with smart meters.
Union Power and New & Renewable Energy Minister Shri R. K. Singh said 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 utilization of 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. 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.”
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,” Shri R. K. 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 installation of smart meters, the ToD metering at domestic consumer level will be introduced as per Tariff Policy mandate.
Time of Day (TOD) tariff, is recognized globally across electricity industries, as an important Demand Side Management (DSM) measure which is used as a means of incentivizing consumers to shift a portion of their loads from peak times to off-peak times, thereby improving the system load factor by reducing the demand on the system during peak period. Various statutory provisions already exist to enable and promote implementation of ToD tariff (i.e. Tariff Policy, 2016, Electricity Act, 2003 and National Electricity Policy, 2005).
Rules regarding amendment made in smart metering provision
Government has also simplified the rules for smart metering. To avoid inconvenience / harassment of the consumers, the existing penalties for increase in consumer’s demand beyond the maximum sanctioned load / demand have been reduced. As per the amendment in metering provision, post installation of a smart meter, no penal charges will be imposed on a consumer based on maximum demand recorded by the smart meter for the period before installation date. Load revision procedure has also been rationalized in a way that maximum demand shall be revised upwards only if 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 decision about consumption of electricity.
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.
The notifications of the Rules in December 2020 and amendments since then can be found below.
