The rate of electricity to be charged is called tariff.
Objectives of Tariff :
Like other commodities, electrical energy is also sold at such a rate that it not only returns the cost but also earns reasonable profit. Therefore, a tariff should include the following terms:
- Recovery of cost of producing electrical energy at the power station.
- Recovery of cost on the capital investment in transmission and distribution systems.
- Recovery of cost of operation and maintenance of supply of electrical energy e.g., metering equipment, billing etc.
- A suitable profit on the capital investment.
Types of Tariff
The different types of tariff are as follows,
- Simple tariff
- Flat rate tariff
- Block rate tariff
- Three-part tariff
- Two-part tariff
- Maximum demand tariff
- Power factor tariff.
1. Simple Tariff
In this type of tariff, the rate per unit of energy consumed is fixed and every consumer will be charged the same. The simple tariff is also called as uniform tariff and is the simplest form of tariff. The simple tariff remains constant and does not vary with the increase or decrease in number of units consumed by a consumer.
2. Flat Rate Tariff
In this type of tariff different types of consumers are charged at different rates. The rate for each type of consumer is arrived at by taking its load factor, diversity factors into account. The bill will be total units consumed × rate/unit.
Advantage :
- It is easy to understand by different types of consumers and calculations at suppliers end are simple.
Disadvantages :
- If the consumer has got two types of loads i.e., (i) fan and lighting load (ii) power load, then two meters are installed at his premises i.e., for different types of power supply, separate meters
are required. - It is very difficult to derive at the load factor and diversity factor to be used in deciding the traffic.
3. Block Rate Tariff
Here, cost of units consumed will change as the consumer crosses particular number of units its. If the number of units generated increases, then the cost of generation per unit, automatically decreases. For example, for first 50 unit there may be one ratio, 51 to 200 there may be other rate. From 201 to 400 there may be some another rate. Such type of tariff is commonly used now a days for domestic and small industrial consumers.
Advantage :
If the consumer has large demand of number of units, then he has to pay less amount only. Due to that reason, the consumers show more interest for consuming more electrical energy.
Disadvantage :
It lacks a measure of the consumers demand.
The overall annual cost of electrical energy generated by a power station can be expressed in two forms, three-part tariff forms and two-part tariff form.
4. Three-part Tariff
In this method, the overall annual cost of electrical energy generated is divided into three parts i.e., Fixed cost, Semi-fixed cost and Running cost.
Total annual cost of energy =Fixed cost + Semi-fixed cost + Running cost
= Constant + Proportional to maximum demand+ Proportional to kWh generated
= (a+ b kW + c kWh)
Where,
a – Annual fixed cost independent of maximum demand and energy.
b – Constant which when multiplied by maximum kW demand on the station gives the annual semi- fixed cost.
c – A constant which when multiplied by kwh output per annum gives the annual cost
It may be seen that by adding fixed charge or consumer ‘s charge to two-part tariff, becomes three-part tariff.
5. Two-part Tariff
The total charge under this kind of tariff is divided into two parts i.e., a fixed charge based on the maximum demand and variable charge (running charge) per unit of energy consumed. The expression for the annual cost of energy then becomes,
Total annual cost of energy = (A kW + B kWh)
Where,
A – A constant which when multiplied by maximum kW demand on the station gives the annual cost of the first part.
B – A constant which when multiplied by the annual kWh generated gives the annual running cost.
The fixed charges are dependent upon the maximum demand of the consumer, while the running charges are dependent upon the number of units consumed by the consumer. It is easy to understand and this type of tariff applies to consumers industrial consumers.
6. Maximum Demand Tariff
Maximum demand tariff is almost similar to the two-part tariff. The only difference is that, in a maximum demand tariff, the maximum demand is measured by an indicator known as maximum demand indicator.
The drawbacks of two-part tariff are eliminated in maximum demand tariff. This type of tariff is applicable for bulk supplier and for large industrial consumers, who have control over their maximum demand
7.Power Factor Tariff
when the power factor of the consumer’s load are taken into consideration, then that tariff is known as power factor In A.C. system, the efficiency of a plant and equipment not only depends on kW, but also on the power factor. The power factor plays a major role in A. C systems. So, to increase the utility of the plant to a maximum extent, the plant must be operated at most economical power factor.
The three main classes are,
- kVA Maximum Demand Tariff: The maximum demand of the consumer is measured in kVA, not in kW. The maximum kVA demand is charged in addition to the charge corresponding to the energy.
- kWh and kVARh Tariff: In this type of tariff both kWh and kVARh of a consumer are charged separately.
- Sliding Scale Method: Under this kind of tariff, average power factor say 0.8 lagging is assumed as a reference. If the p.f of a consumer falls by even 1 % then an extra amount will be charged for it. On the other hand, if the p.f of any consumer rises by even 1%, a discount will be given to him.
Requirements of Tariff Method
- Tariff should be simple.
- It should give lesser rates for more consumption.
- It must be same for large population.
- It should consider both the maximum demand charges and the energy charges.
- It must encourage the consumers with high load factors.
- It should motivate consumers for using power during off-peak hours.
- It should charge more for lighting than power connection.
- The penalty should be provided for low power factor.
Q1. Why is tariff for power load less than the lighting load?
Ans. Although tariff should include the total cost of producing and supplying electrical energy plus the profit, it cannot be the same for all types of consumers. This is because the cost of producing electrical energy depends to a considerable extent upon the magnitude of electrical energy consumed by the user and his load conditions. Therefore, in all fairness, due consideration has to be given to different types of consumers (e.g., industrial, domestic and commercial) while fixing the tariff. This makes the problem of suitable rate making highly complicated. The power load improves the load factor of a system to greater extent rather than a lighting load. Hence, the reason, why the tariff for power load is less than the lighting load.