The Government of India has recently introduced two noteworthy changes to the current power tariff system by amending the Electricity (Rights of Consumers) Rules, 2020. These changes have been introduced with the goal of improving electricity consumption efficiency and enhancing the overall power system. The main changes encompass the implementation of the Time of Day (ToD) Tariff and the streamlining of smart metering provisions.
Time of Day (ToD) Tariff
The Time of Day (ToD) Tariff is a dynamic pricing mechanism that replaces the traditional flat-rate pricing for electricity. Under this system, the price of electricity varies based on the time of day. During specified solar hours, typically eight hours determined by the State Electricity Regulatory Commission, the tariff will be 10% to 20% lower than the normal tariff. Conversely, the tariff during peak hours will be 10% to 20% higher. Initially, the Time of Day (ToD) tariff will be implemented for Commercial and Industrial consumers with a maximum demand of 10 KW and above, starting from April 1, 2024. Following that, from April 1, 2025, the ToD tariff will be expanded to include all other consumers, except agricultural consumers. The ToD tariff will be activated immediately after the installation of smart meters for consumers.
R. K. Singh, Union Power and New & Renewable Energy Minister emphasized that the ToD tariff is beneficial for both consumers and the power system. By aligning prices with the time of day, consumers are encouraged to manage their electricity consumption more efficiently. During solar hours, when solar power is more abundant and cost-effective, the tariff will be lower, resulting in reduced electricity bills for consumers. In contrast, during non-solar hours, when the reliance is on thermal, hydro, and gas-based power, which are relatively costlier, the tariff will reflect this increased cost. This pricing mechanism allows consumers to plan their electricity consumption strategically, thereby reducing their overall power costs.
Moreover, the introduction of the ToD tariff system promotes better grid integration of renewable energy sources. By incentivizing higher demand during periods of high renewable energy generation, the ToD tariff facilitates the integration of a larger quantity of renewable power into the grid. This move aligns with India’s commitment to transitioning to cleaner and more sustainable energy sources.
Rationalization of Smart Metering Provisions
The government has also streamlined the rules regarding smart metering, which plays a crucial role in enabling the implementation of ToD tariffs. The amendments aim to minimize inconveniences and harassment faced by consumers while ensuring accurate metering and effective load management. Notable changes include:
- Reduction of Penalties: Penalties for exceeding the maximum sanctioned load or demand have been reduced to alleviate consumer inconvenience.
- Elimination of Penal Charges: Post installation of a smart meter, consumers will no longer incur penal charges based on the maximum demand recorded by the smart meter before its installation.
- Rationalized Load Revision: The procedure for revising the maximum demand has been rationalized. A revision in maximum demand will only occur if the sanctioned load has been exceeded at least three times within a financial year.
- Remote Meter Reading: Smart meters will be read remotely at least once a day, and the data will be shared with consumers. This empowers consumers to make informed decisions about their electricity consumption based on real-time information.
The Electricity (Rights of Consumers) Rules, 2020, which were notified by the government on December 31, 2020, underscore the significance of consumer rights in the power sector. These rules aim to ensure the timely provision of new electricity connections, refunds, and other services while penalizing service providers for any willful disregard of consumer rights. Additionally, the rules emphasize the importance of reliable and quality electricity supply and promote a conducive environment for investment in the power sector.
The recent amendment to the Electricity (Rights of Consumers) Rules reflects the government’s commitment to empowering power consumers, providing them with 24×7 reliable electricity at affordable costs, and creating a favorable ecosystem for power sector investments.
