The central government has introduced two changes - introduction of `Time of Day’ (ToD) tariff, and rationalisation of smart metering provisions in the prevailing power tariff system - through an amendment to the Electricity (Rights of Consumers) Rules, 2020.
Under the `Time of Day’ tariff system the price the consumer pays for electricity will vary according to the time of day, rather than being charged at the same rate at all times of the 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. ToD tariff would be applicable for commercial and industrial consumers having maximum demand of 10 KW and above, from 1 April 2024 and for all other consumers except agricultural consumers, latest from 1 April 2025. Time of Day tariff would be made effective immediately after installation of smart meters for the consumers.
ToD would be a win-win for consumers as well as the power system, union minister of power and new and renewable energy, R K Singh, said.
“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. 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 minister pointed out.
He said 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, incentivise demand increase during the periods of high RE generation hours and thereby increase grid integration of larger quantity of renewable power,” Singh said.
Most 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 recognised globally across electricity industries, as an important demand side management (DSM) measure which is used as a means of incentivising 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.
Government has also simplified the rules for smart metering. To avoid inconvenience to 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 rationalised 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 31 December 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 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.