New Delhi: The Government of India has made changes to the current power tariff system by amending the Electricity (Rights of Consumers) Rules, 2020. The two amendments introduced include the Time of Day (ToD) Tariff and the rationalization of smart metering provisions.
With the ToD Tariff system, the price of electricity varies based on the time of day. During solar hours, the tariff will be 10% -20% less than the normal rate, while the tariff during peak hours will be 10% – 20% higher. The ToD tariff will be applicable for Commercial and Industrial consumers having a maximum demand of 10 KW and above from April 1, 2024, and for all other consumers except agricultural consumers from April 1, 2025. Time of Day tariff shall be made effective immediately after the installation of smart meters, for consumers with smart meters.
The 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. Consumers can reduce their electricity bills by utilizing the ToD tariff mechanism effectively. The tariff during solar hours is less since solar power is cheaper, while during non-solar hours, thermal and hydropower as well as gas-based capacity are used, which is more expensive than solar power. Consumers can plan their consumption to reduce their power costs by scheduling more activities during solar hours when power costs are less.
‘The ToD mechanism will also ensure better grid integration of Renewable Energy sources, facilitating a faster energy transition for India. The ToD tariff will improve the management of renewable generation fluctuations, incentivize demand increase during periods of high RE generation hours, and thereby increase grid integration of a larger quantity of renewable power,’ Shri R. K. Singh added.
Most State Electricity Regulatory Commissions (SERCs) in India have already implemented Time of Day (ToD) tariffs for the large Commercial and Industrial (C&I) category of consumers. The installation of smart meters will introduce ToD metering at the domestic consumer level as mandated by the Tariff Policy.
ToD tariffs are recognized worldwide as an important Demand Side Management (DSM) measure that incentivizes consumers to shift a portion of their loads from peak to off-peak times, thereby improving the system load factor by reducing the demand during peak periods. Various statutory provisions already exist to enable and promote the implementation of ToD tariffs, such as the Tariff Policy, 2016, Electricity Act, 2003, and the National Electricity Policy, 2005.
Amendment made in the smart metering provision:
- The government has simplified the rules for smart metering to avoid inconvenience or harassment of consumers.
- The existing penalties for increasing the consumer’s demand beyond the maximum sanctioned load/demand have been reduced.
- After the 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.
- The load revision procedure has also been rationalized so that the maximum demand shall be revised upwards only if the sanctioned load has been exceeded at least three times in a financial year.
- Additionally, smart meters shall be read remotely at least once a day, and the data shall be shared with consumers to enable them to make informed decisions about their electricity consumption.
On December 31, 2020, the government notified The Electricity (Rights of Consumers) Rules, 2020, which aim to ensure that power systems exist to serve consumers and that consumers have the right to receive reliable services and quality electricity.
The Rules ensure that new electricity connections, refunds, and other services are provided in a time- bound manner and that service providers are penalized, and consumers are compensated for willful disregard of consumer rights. The current amendment to the Rules is a continuation of the government’s efforts to empower power consumers, ensure 24X7 reliable electricity supply at an affordable cost, and maintain a conducive ecosystem for investment in the power sector.
The notifications of the Rules in December 2020 and the amendments since then can be found below:
- The Electricity (Rights of Consumers) Rules, 2020
- The Electricity (Rights of Consumers) Amendment Rules, 2021
- The Electricity (Rights of Consumers) Amendment Rules, 2022
- The Electricity (Rights of Consumers) Amendment Rules, 2023
