The Central government has introduced two major changes in the prevailing power tariff system across the country. The new ‘Time of Day (ToD)’ Tariff system and the rationalisation of smart metering provisions could significantly change your electricity bill amounts. The Centre has amended the Electricity (Rights of Consumers) Rules, 2020, to implement these changes.

COMMERCIAL BREAK
SCROLL TO CONTINUE READING

Electricity consumers across the country will be able to save up to 20 per cent in power bills by planning their usage during day time, under the new ToD Tariff system.

The new system will allow for cuts in power tariffs of up to 20 per cent during the day time and surge pricing of up to 20 per cent during peak night hours. This move is aimed at increasing the use of renewable sources of energy such as solar power. It is worth noting that India is aiming to source 65 per cent of its energy capacity from renewables by 2030 and net zero emissions by 2070.

Additionally, the new mechanism will also facilitate better grid integration of renewable energy sources thereby ensuring faster energy transition for the country.

How can consumers benefit from the new power tariff rules?

The consumers can benefit by planning more activities during the solar hours, when the tariff is less.

Using air conditioners and coolers in the summer heat will get more expensive due to the ToD tariff system. However, consumers can also benefit from the system by avoiding electricity usage for washing clothes, cooking and other purposes during peak hours when tariffs are higher.

By doing chores like washing clothes or cooking during off-peak hours, consumers can reduce their electricity bills. The key thing is having awareness and effectively utilising the ToD tariff mechanism. Besides, consumers can also opt for using solar power at their homes.

What is Time of Day (ToD) tariff?  

The Time of Day (ToD) Tariff system provides for varying rates according to the time of day instead of the same rate throughout the day.

This system is essentially aimed at reducing demand on the grid during peak times when many Indian households tend to increase their use of air conditioners and coolers.

"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 per cent less than the normal tariff, while the tariff during peak hours will be 10 to 20 per cent higher," the Power ministry said.

The new tariff system will come into effect for commercial and industrial consumers, having demand of 10 KW and above, from April 1, 2024. 

For all other consumers except those in the agricultural sector, the new tariff system will be applicable from April 1, 2025. For those with smart meters, the new tariff system will be applicable immediately after installation of such meters.