The centre modifies electricity rates; prices will vary depending on the time of day

By amending the existing laws and adopting a “Time of Day”-based power pricing mechanism, the federal government has changed the current power tariff structure.

After the power (Rights of Consumers) Rules, 2020 are amended, you won’t be paid the same amount for power at all hours of the day; instead, the price you pay will change based on the time of day.

In the planned Time of Day-based system, the rate will be 10–20% lower during the sun hours, which are the first eight hours of the day, and 10–20% higher during “peak hours.”

From April 1, 2024, this proposed rate would be in effect for commercial and industrial customers with a maximum demand of 10 KW or more, and from April 1, 2025, for all other customers with the exception of agricultural customers.

“Time of Day tariff shall be made effective immediately after installation of smart metres, for the consumers with smart metres,” the Union Ministry of Power said in a statement on Friday.

The time-based pricing scheme, according to Union Power Minister RK Singh, benefits both customers and the power sector.
“The TOD tariffs give pricing signals to customers to regulate their load in accordance with the Tariff. These tariffs include distinct prices for peak hours, Solar hours, and regular hours. “Consumers can lower their electricity bills by being aware of and using the ToD tariff mechanism effectively,” Singh added.

The time-based pricing system is acknowledged by the whole electrical industry as a way to move some of their power demands from peak periods to off-peak hours, enhancing the total load factor.

The government has also made the regulations for smart metres simpler. The previous fines for exceeding the maximum sanctioned load or demand imposed on customers have been scaled down to prevent causing them any hardship.

The power ministry released a statement that said, “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.”