The Central Government has introduced major changes in the power tariff system via an amendment to the Electricity (Rights of Consumers) Rules, 2020. The changes will see an introduction of Time of Day (ToD) tariff and smart meters.

With the introduction of ToD tariff, consumers will now be charged differently throughout the day based on the time. During peak hours, the tariff will be 10-20% higher than usual and during solar hours or eight hours of a day, the tariff is going to be 10-20% lower than usual as stated by the State Electricity Regulatory Commission.

These new rates will be applicable to industrial and commercial meters with a maximum demand of 10KW and above, it will start from 1 April 2024, and for other consumers except for agricultural consumers, the same will begin from 1 April 2025. The implementation of ToD will begin once smart meters get installed.

Union Minister RK Singh said that this new plan is a win-win for all consumers and the power systems. He said, “The TOD tariffs comprising separate tariffs for peak hours, Solar hours and normal hours, send price signals to consumers to manage their load according to the tariff. With awareness and effective utilization of ToD tariff mechanism, consumers can reduce their electricity bills."

He also added that consumers will now be able to plan their consumption to reduce power costs. He also assured that this mechanism will promote better grid integration of renewable energy sources.

According to the ministry, the Time of Day (TOD) tariff is a crucial Demand Side Management (DSM) tool that is used to encourage consumers to shift some of their loads from peak to off-peak hours, improving the system load factor by lowering demand on the system during peak hours.

In addition to the ToD Tariff, the government has made smart metering regulations easier to follow for consumers' convenience. To prevent annoyance and harassment, penalties for exceeding the maximum sanctioned load or demand have been lowered. According to the metering provision's change, a consumer will not be penalized for exceeding the maximum demand recorded by the smart meter during the time leading up to the installation date.

The process for revising load has also been streamlined so that the maximum demand can only be increased if the sanctioned load has been exceeded at least three times in a fiscal year, according to the ministry. The smart meters will also be read remotely once a day and all data will be shared to the consumers so that they can make informed decisions about their power consumption.