Time-of-Day tariff: How it will affect you

What is Time-of-Day tariff?

The government on Friday amended the Electricity (Rights of Consumers) Rules 2020, to make two changes—introduction of Time-of-Day and rationalization of smart meters. ToD tariffs will be based on usage by the time of day, whereas the current system charges a flat rate. During the day time, the tariff could fall by as much as 20%, benefitting consumers, while at night, it would go up by the same amount. This will potentially help power companies to balance peak power demand while giving consumers the ability to regulate and manage their consumption and control their bills.

Will electricity bills go up due to this?

For a small working couple family, where usage is mostly at night, there will be an increase in the bill. Other households would be able to offset some of the night-time spike with their usage during the day. Typically, there is a spike in power consumption in the morning as schools & offices open up; then in the late afternoon when children return home while factories and offices are still working, and finally in the early evening. This is when air conditioners and coolers are on full blast in households during summers and heaters/geysers during winters. ToD will try to discourage consumers from using too much power at this time.

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Which are the power guzzling appliances?

Air conditioners, coolers, refrigerators, heaters and geysers are typically the big guzzlers at home. Some others that also consume significant power are washing machines, dishwashers and microwaves. Appliances that are used the most and for longer duration like fans and lights use less power. There are energy-efficient versions of almost all electrical appliances.

Is the infrastructure ready for this?

You’ll need a smart meters, which explains the other amendment. Smart meters automate the meter-reading process and enable accurate cost estimation, reducing wastage. On average, these meters send information about consumption directly to the power distribution companies every 15 minutes which is essential to calculate ToD. So far, over 6.5 million smart meters have been installed in the country. By 2026, the target is to take this up to 250 million. Till date, about 230 million have been sanctioned.

How does it benefit the power sector?

ToD and smart metering can improve billing efficiency and cut transmission and distribution losses. The increase in renewable power, which needs to be blended with coal-based power, needs differential tariff. And in the years to come, millions of EVs are expected to be plugged in during the evenings. ToD can help push some consumers to switch to late night, classified as off-peak hours, or during the day. Loss-making discoms are plagued by the inability to revise tariff, and ToD will give them some flexibility.