Delhi, 23rd June 2023: The Indian government has taken a significant step towards enhancing the power tariff system and promoting efficient energy utilization by introducing new amendments to the Electricity (Rights of Consumers) Rules, 2020. These amendments focus on the implementation of Time of Day (ToD) Tariff and the simplification of smart metering rules, aiming to benefit both consumers and the power system.
The newly introduced Time of Day (ToD) Tariff system is designed to charge consumers varying rates for electricity based on the time of day. During the designated solar hours, which consist of eight hours determined by the State Electricity Regulatory Commission, the tariff will be 10%-20% lower than the normal rate. In contrast, during peak hours, the tariff will be 10%-20% higher. Initially, this ToD tariff system will be applicable to commercial and industrial consumers with a maximum demand of 10 KW and above, starting from 1st April 2024. It will later extend to all other consumers, excluding agricultural consumers, from 1st April 2025. The implementation of the Time of Day tariff will commence soon after the installation of smart meters for consumers using such meters.
Shri R. K. Singh, the Union Power and New & Renewable Energy Minister, emphasized that the ToD tariff system offers a win-win situation for both consumers and the power system. By aligning their electricity usage with the tariff structure, consumers can effectively reduce their electricity bills. During the solar hours when solar power is cheaper, consumers will benefit from the lower tariff, providing them with an incentive to plan their electricity consumption accordingly. Conversely, during non-solar hours when thermal, hydro, and gas-based power sources are predominantly used, which are relatively more expensive, the tariff will reflect the higher costs involved.
Furthermore, R. K. Singh stated that the implementation of the ToD tariff system will contribute to better grid integration of renewable energy sources and facilitate a faster energy transition in India. This mechanism will help manage fluctuations in renewable energy generation, encourage increased demand during periods of high renewable energy availability, and enable the integration of a larger quantity of renewable power into the grid.
Most State Electricity Regulatory Commissions (SERCs) in India have already implemented ToD tariffs for large commercial and industrial consumers. With the installation of smart meters, ToD metering will be extended to domestic consumers in accordance with the Tariff Policy mandate.
In addition to the ToD tariff, the government has simplified the rules for smart metering to provide a more consumer-friendly experience. Penalties for exceeding the maximum sanctioned load or demand have been reduced to ensure consumers are not inconvenienced or harassed. Smart meters will now read data remotely at least once a day, which will be shared with consumers, enabling them to make informed decisions about their electricity consumption. Load revision procedures have also been rationalized, allowing upward revisions of the maximum demand only if the sanctioned load has been exceeded at least three times in a financial year.
The Electricity (Rights of Consumers) Rules, 2020, were initially introduced by the government on December 31, 2020, with the goal of ensuring reliable services, quality electricity, and timely provision of new connections and refunds to consumers. The recent amendments to these rules underline the government’s commitment to empower power consumers, ensure round-the-clock electricity supply at affordable costs, and foster an investment-friendly environment in the power sector.
For more detailed information, please refer to the official notifications:
