Types of Tariff

Types of Tariff, Electrical Dost

Following are the types of tariff:

1) Simple tariff
2) Step rate tariff
3) Block rate tariff
4) Power factor tariff
5) Two-part tariff
6) Three-part tariff
7) Flat rate tariff
8) Time of each day (Tos) (Spot parking)

1) Simple tariff (Uniform rate tariff)

Most simple form during which the cost of energy is charged on the idea of units consumed by the buyer.
The cost per unit (kWh) springs by the subsequent relation :

The consumer is suffered by this tariff:
(i) The cost per unit (kWh) delivered is higher.
(ii) Domestic, bulk, industrial, commercial consumers aren’t discriminated they need different load factors, different power factor or diversity factors. All are treated the same.
So this tariff isn’t generally exercised.

2) Step rate tariff :

It is a group of flat-rate tariffs. during this decreasing unit charges for a higher range of consumption.

Types of Tariff, Electrical Dost
Fig . of tariff

Rs. 5/unit up to but 50 unit (i.e. kWh) consumption
Rs. 4.5/unit for 50 to 200 kWh consumption
Rs. 4/unit exceeding 200 kWh consumption.
In this tariff the tendency of the buyer to cross and enter into the subsequent slab.
This drawback is overcome in block rate tariff.

3) Block rate tariff

The first block of energy 1s charged at a higher rate and succeeding blocks of energy are charged at progressively reduced rates, for instance, the primary 30 units could also be charged at the speed of 4.0 paise/unit. subsequent 50 units could also be charged at the speed of three .50 per unit
The consumption exceeding 100 units could also be charged at the speed of three .0 per unit
The advantage of such a tariff is hat the buyer gets an incentive tor consuming more electricity. This increases the ratio of the system and hence the generation cost is reduced. the disadvantage is that it lacks a measure of the consumer’s demand. This tariff is the hottest nowadays among domestic, commercial and little industrial consumers.

4) Power factor tariff

Since, the efficiency of plant and equipment depends upon the facility factor, therefore, so as to extend the utility of plant and equipment to the utmost, the plant must be operated at the foremost economical power factor. that’s why sometimes consumers are
penalized for poor power factor by applying the subsequent sorts of power factor tariffs:

(a) kVA Maximum Demand Tariff: this sort of tariff springs by modifying sort of two-part tariff. during this case, the maximum demand is measured in kVA rather than in kW. this sort of tariff encourages the consumers to work their machines and other equipment at improved power factor because low power factor will cause more demand charges.

(b) kWh and kVARh Tariff: kWh and kVARh are measured and charged separately Since, kVARh decreases with the rise in power factor, therefore, the buyer is inspired to enhance the facility factor of his installation so as to decrease the fees on account of kVARh recorded.

5) Two-part tariff

The total charge to be made to the buyer is split into two components namely fixed cost and running charge. Since fixed cost is independent of energy consumed and proportional to the utmost demand, therefore, the fixed cost is formed at a particular amount per kW of maximum demand, which may be assessed on the idea of connected load or on the entire combined kW capacity of all the consuming devices owned by a specific consumer. Running charge is formed at a particular amount per kWh for the entire energy consumed. this sort of tariff 1s expressed by the expression. Total energy charges, e=a X kW+b X kwh where a is that they charge per kW of maximum demand assessed and R b is that they charge per kWh of energy consumed.
This tariff is usually applicable to medium industrial consumers. during this tariff charge made on Maximum demand recovers the fixed charges like interest and depreciation on the cost of capital of building and equipment, taxes and insurance charges and operating expense which is independent of energy supplied by it and varies with the variation of maximum demand.

The charge made on total energy consumption recOvers the operating expense, which varies with variation in energy supplied. the disadvantage is that the consumer is to pay his fixed cost regardless of the consumption. for instance, if during any month any industry remains closed,
the owner is going to be required to pay the fixed charges unnecessarily.

6) Three-part tariff

In this sort of tariff, the entire charges are split into three parts
Fixed charges: which recovers expenses in giving supply.
Sime-fixed charges: These are lavid on the idea of maximum demand in kW or
kVA which recovers plants initial cost plus operating expense
Variable charges: These charges are lavid on the idea of units consumed. This recovers the changing rates of fuel.

Following relation shows the entire charge relation
Total charges = Ra +b.kW + ckWh
a: Constant charge
b: unit charge per kW of metered maximum demand during the billing period
C: unit charge for energy in Ru/kWh of consumption.

This tariff is usually applicable to bulk supplies.

7) Flat rate tariff

In this sort of tariff, differing types of consumers are ‘charged at different rates i.e. the flat rate for light and fan loads is slightly above that for power load. The rate for every category of consumers is framed by taking into consideration its load factor and variety factor. The method is typically hottest with the general public since it can easily be understood by the consumers and therefore the calculations at the supplier’s end are simple. If the energy consumed during the billing period is x units and therefore the flat rate.

8) TOD (i.e. Time of Day Tariff)

This tariff is also called as Time of Day metering or Time of Usage (TOU) or Seasonal Time of Day (STOD). The scheme of this tariff is such that the consumer has to pay less in the non-peak load period of the day and to pay a higher rate during the peak-load period. For such a tariff scheme the metering involves dividing the day, month and year into tariff slots.

This tariff is beneficial to the consumer as well as to the electricity supply
company. This is because it controls the usage on the part of the consumer resulting in automatic load control on the part of the company.
It is the consumer’s responsibility to control his own usage or pay more on peak load. Naturally, the consumer avoids the usage during peak load period and the load is thus controlled. This helps the electricity company to plan transmission-distribution infrastructure. The peak load is generally in the day time of 1 pm to 6 pm or up to 9 pm. In summer days, the peak-load period is generally 6 to 12 noon in winter, evening 5 to 8 pm. This tariff splits the rate into two segments:
i) In peak
ii) Off-peak load and charges are decided by the company and revising the
rates as and when the company decides.

The rates of tariff vary from place to place, region to region. Generally, large consumers adopt this tariff.
It helps to flatten the load curve of the system.

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