Central Government Amends Electricity (Rights of Consumers) Rules, 2020 by Introducing Time of Day (ToD) Tariff and Simplification of Smart Metering Rules
New Delhi, june 23
Power Tariff to be 20% less during Solar Hours, 10%-20% Higher during Peak Hours; Consumers to Benefit from Effective Utilization of ToD Provision
In a recent development, the Government of India has introduced two significant changes to the existing power tariff system by amending the Electricity (Rights of Consumers) Rules, 2020. The amendments include the introduction of Time of Day (ToD) Tariff and the rationalization of smart metering provisions.
Under the ToD Tariff system, the price consumers pay for electricity will vary based on the time of day. Specifically, during the designated solar hours (eight hours specified by the State Electricity Regulatory Commission), the tariff will be 10%-20% less than the normal tariff, whereas during peak hours, the tariff will be 10%-20% higher. The ToD tariff will be applicable to commercial and industrial consumers with a maximum demand of 10 KW and above, starting from April 1, 2024. For all other consumers, excluding agricultural consumers, the ToD tariff will be implemented from April 1, 2025. Once smart meters are installed, the Time of Day tariff will become effective immediately for consumers utilizing such meters.
Union Power and New & Renewable Energy Minister Shri R. K. Singh highlighted that the ToD system is advantageous for both consumers and the power system. He explained that the separate tariffs for peak hours, solar hours, and normal hours send price signals to consumers, enabling them to manage their electricity consumption according to the tariff. By raising awareness and effectively utilizing the ToD tariff mechanism, consumers can reduce their electricity bills. Since solar power is cheaper, the tariff during solar hours is lower, providing direct benefits to consumers. During non-solar hours, when thermal power, hydro power, and gas-based capacity are utilized (which have higher costs than solar power), the tariff will reflect this difference. As a result, consumers can plan their power consumption to reduce costs by engaging in more activities during solar hours.
Additionally, the ToD mechanism will facilitate better integration of renewable energy sources into the grid, enabling a faster transition to clean energy in India. Shri R. K. Singh emphasized that the ToD tariff will enhance the management of renewable energy generation fluctuations and incentivize increased demand during high renewable energy generation periods. This, in turn, will lead to a greater integration of renewable power into the grid.
Most State Electricity Regulatory Commissions (SERCs) have already implemented ToD tariffs for large commercial and industrial consumers in the country. The introduction of smart meters will now extend the ToD metering to domestic consumers as mandated by the Tariff Policy.
Furthermore, the government has simplified the rules for smart metering to ensure consumer convenience and avoid harassment. The penalties previously imposed for exceeding the maximum sanctioned load or demand have been reduced. As per the amended metering provisions, no penal charges will be imposed on consumers based on the maximum demand recorded by the smart meter before the installation date. The procedure for load revision has also been rationalized, allowing an upward revision of the maximum demand only if the sanctioned load has been exceeded at least three times in a financial year. Smart meters will be remotely read at least once a day, and the data will be shared with consumers to enable them to make informed decisions about their electricity consumption.
The Electricity (Rights of Consumers) Rules, 2020, were initially notified by the government on December 31, 2020, with the aim of ensuring reliable and quality electricity services for consumers. These rules ensure timely provision of new electricity connections, refunds
