Using AC, Cooler During Night Will Burn Hole In Your Pocket; Centre To Bring New Electricity Tariff Rule From April 2024

If you have been using air conditioners or air coolers to mitigate the harsh summer heat during summer nights, soon this will burn holes in your pockets as you might have to pay higher electricity consumption charges for nighttime. The Government of India has introduced two changes to the prevailing power tariff system, through an amendment to the Electricity (Rights of Consumers) Rules, 2020. The changes are: the introduction of the Time of Day (ToD) Tariff, and the rationalization of smart metering provisions.

What Is the Time of Day (ToD) Tariff?

The Time of Day tariff brings different pricing for electricity usage during the day and the night. "Rather than being charged for electricity at the same rate at all times of the day, the price you pay for electricity will vary according to the time of day. Under the ToD Tariff system, the Tariff during solar hours (duration of eight hours in a day as specified by the State Electricity Regulatory Commission) of the day shall be 10%-20% less than the normal tariff, while the tariff during peak hours will be 10 to 20 per cent higher," said the power ministry. 

This means, while you may be able to save some bucks during the daytime, you will have to shell out more during the night. Many people use air conditioners during the night and this increases the electricity demand during that period. Therefore, the government has come up with the ToD Tariff system. However, the new ToD tariff may not affect those households who use Air Conditioners or Coolers equally during the day and night as their consumption charges will get balanced out.

When Will the Time of Day (ToD) Tariff Come Into Effect?

ToD tariff would be applicable for Commercial and Industrial consumers having Maximum demand of 10 KW and above, from 1st April 2024. However, for domestic consumers except agricultural consumers, it will come into effect from 1st April 2025. "Time of Day tariff shall be made effective immediately after installation of smart meters, for the consumers with smart meters," said the ministry.

However, the government is projecting it as a win-win situation. “With awareness and effective utilization of the ToD tariff mechanism, consumers can reduce their electricity bills. Since solar power is cheaper, the tariff during solar hours will be less, so the consumer benefits. During non-solar hours thermal and hydropower as well as gas-based capacity is used – their costs are higher than that of solar power – this will be reflected in the Time of Day Tariff. Now consumers can plan their consumption to reduce their power costs – planning more activities during solar hours when power costs are less,” said Union Power and New & Renewable Energy Minister R. K. Singh.

Smart Meters To Replace Old Meters

The ToD tariff will be implemented only after your old meter is replaced with the new smart meter. "Government has also simplified the rules for smart metering. To avoid inconvenience/harassment of the consumers, the existing penalties for an increase in consumer demand beyond the maximum sanctioned load/demand have been reduced. As per the amendment in the metering provision, post-installation of a smart meter, no penal charges will be imposed on a consumer based on the maximum demand recorded by the smart meter for the period before the installation date," said the power ministry. 

The smart meters shall be read remotely at least once a day and the data shall be shared with Consumers to enable them to make informed decisions about the consumption of electricity. This means a consumer will get details of electricity usage during the day and the night so they can reduce or increase their energy consumption accordingly.