tariff

tariff

The rate at which electrical energy is supplied to a consumer

Therefore tariff naturally becomes attention inviting for electric supply company

The supply company has to ensure that the tariff is such that it not only recovers the total production cost of electricity but also earns profit on the capital investment.

The tariff cannot be the same for all consumers as the cost of producing e’ power depends considerably on the e’ energy consumed by the user & his load conditions.

Therefore due consideration has to be given to different types of consumers

(i.e. .)industrial, domestic and commercial)

While fixing tariff.

Objectives of tariffRecovery of cost of productionRecovery on the capital investment

on ppRecovery on the capital investment

on TXN & DXN s/mRecovery of cost of operation and

maintenance of equipments like enery meter ,billing equipments etc.

Earn a suitable profit on capital investment

Desirable characteristics of a tariff

Proper return – this will ensure continuous & reliable service to the consumers

fairness – tariff must be fair so that different types of consumers are satisfied with the rate

Simplicity – must be simple so that an ordinary consumer can easily understand it.

Reasonable profit – profit element should be reasonable

Attractive – it should be attractive so that large number of consumers are encouraged to use e’ energy

Types of tariffSimple tariffFlat rate tariffBlock rate tariffTwo part tariffMax. demand tariffPower factor - 1)kVA max. demand

tariff 2)sliding scale tariff 3)kW and kVAR tariff

Simple tariffHere there is a fixed rate per unit of

energy consumed.i.e. price charged per unit is constant.

The rate will not vary with decrease or increase of no of units consumed

The consumption is recorded by Energy meter

This is the simplest of all tariffs and is readily understood by the consumers

disadvantagesThere is no discrimination between

different types of consumers The cost per unit delivered ius highIt does not encourage the use of

electricity

2. Flat rate tariff

Here different types of consumers are charged at different uniform per unit rates.

The consumers are grouped into different classes and each class is charged at different uniform rates.

For example the flat rate /kWhr for lighting load may be 60paise, whereas it may be 55paise/kWhr for power loads

Advantages

Simple in calculationsMore fair to different types of

consumers

disadvantagesSeparate meters are required for

lighting loads, power loads etc. this makes the tariff expensive and complicated.

A particular class of consumers are always charged at the same rate irrespective of the magnitude of energy used.

Block rate tariffWhen a given block of energy is

charged at a specified rate and the succeeding blocks of energy are charged at progressively reduced rates , it is called block rate tariff

Here the energy consumption is divided into blocks and the price per unit is fixed in each block.

The price p.u. of the 1st block is the highest and it is progressively reduced for the succeeding blocks of energy.

(e.g.)for 1st 30units may be charged @60paise p.u. and next 25 units @55 paise p.u. remaining additional block @30 P.U.

Advantages

THE CONSUMER GETS INCENTIVE TO CONSUME MORE E’ ENERGY

disadvantagesIT LACKS A MEASURE OF

CONSUMERS ACTUAL DEMAND

Two part tariffWhen the rate of electricity is

charged on the basis of max. demand of the consumer &the unit consumed ,it is called 2 part tariff.

Here the total charge is split into 2 components 1)fixed charges 2) running charges

Total chargesFixed charge Depends on max.

demand It is assessed from the

total connected load It is in kW

Running charge Depends on the no of

units consumed It is in kWhr

Total charge

Rs (b * kW + c * kWhr)Where b - charge/kW of max.

demandC – charge/ kWhr of energy

consumed

Advantages

Easily understood It recovers fixed charge which

depends on max. demand, but are independent of units consumed

disadvantagesThe consumer has to pay fixed

charges irrespective of the fact whether he has consumed energy or not.

There is always error in assessing the max. demand of the consumer .

Max. demand tariffIt is similar to 2 part tariff with the

only difference that max. demand is actually measured by installing max. demand meter in the premises of the consumer .

This removes the objection of 2 part tariff where max. demand is assessed on the basis of total connected load.

This tariff is mostly applied to big consumers. However it is not suitable fo small consumers as a separate max. demand meter is required

Power factor tariffHere the power factor of the

consumer is taken into account.P. f. plays an important role in ac

systems A low p f results in so many

disadvantages like v drop, loss etcTherefore a consumer having low p f

should be penalized.

Types of power factor tariffskVA max. demand tariffIt is a modified form of 2 part TariffHere fixed charge is in kVA not kW as

kVA is inversly proportional to pf(pf = kW/kVA).

Therefore a consumer having lpf has to contribute more towards fixed charges

This tariff encourages the consumer to operate their equipments at improved pf.

Sliding scale p.f. tariffAlso called average pf tariff.Here average pf , say 0.8 lagging is

taken as referenceIf pf of the consumer falls below this pf

suitabe charges are made.If pf is above this reference a discount

is allowed

kW and kVAR TariffHere both active and reactive power

supplied are charged separately.A consumer having lpf will draw more

reactive power and hence shall have to pay more.

Thank

you