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  1. tariff

  2. The rate at which electrical energy is supplied to a consumer • Therefore tariff naturally becomes attention inviting for electric supply company • The supply company has to ensure that the tariff is such that it not only recovers the total production cost of electricity but also earns profit on the capital investment.

  3. The tariff cannot be the same for all consumers as the cost of producing e’ power depends considerably on the e’ energy consumed by the user & his load conditions. • Therefore due consideration has to be given to different types of consumers • (i.e. .)industrial, domestic and commercial) • While fixing tariff.

  4. Objectives of tariff • Recovery of cost of production • Recovery on the capital investment on pp • Recovery on the capital investment on TXN & DXN s/m • Recovery of cost of operation and maintenance of equipments like enery meter ,billing equipments etc. • Earn a suitable profit on capital investment

  5. Desirable characteristics of a tariff • Proper return – this will ensure continuous & reliable service to the consumers • fairness – tariff must be fair so that different types of consumers are satisfied with the rate • Simplicity – must be simple so that an ordinary consumer can easily understand it.

  6. Reasonable profit – profit element should be reasonable • Attractive – it should be attractive so that large number of consumers are encouraged to use e’ energy

  7. Types of tariff • Simple tariff • Flat rate tariff • Block rate tariff • Two part tariff • Max. demand tariff • Power factor - 1)kVA max. demand tariff 2)sliding scale tariff 3)kW and kVAR tariff

  8. Simple tariff • Here there is a fixed rate per unit of energy consumed.i.e. price charged per unit is constant. • The rate will not vary with decrease or increase of no of units consumed • The consumption is recorded by Energy meter • This is the simplest of all tariffs and is readily understood by the consumers

  9. disadvantages • There is no discrimination between different types of consumers • The cost per unit delivered ius high • It does not encourage the use of electricity

  10. 2. Flat rate tariff • Here different types of consumers are charged at different uniform per unit rates. • The consumers are grouped into different classes and each class is charged at different uniform rates. • For example the flat rate /kWhr for lighting load may be 60paise, whereas it may be 55paise/kWhr for power loads

  11. Advantages • Simple in calculations • More fair to different types of consumers

  12. disadvantages • Separate meters are required for lighting loads, power loads etc. this makes the tariff expensive and complicated. • A particular class of consumers are always charged at the same rate irrespective of the magnitude of energy used.

  13. Block rate tariff • When a given block of energy is charged at a specified rate and the succeeding blocks of energy are charged at progressively reduced rates , it is called block rate tariff • Here the energy consumption is divided into blocks and the price per unit is fixed in each block.

  14. The price p.u. of the 1st block is the highest and it is progressively reduced for the succeeding blocks of energy. • (e.g.)for 1st 30units may be charged @60paise p.u. and next 25 units @55 paise p.u. remaining additional block @30 P.U.



  17. Two part tariff • When the rate of electricity is charged on the basis of max. demand of the consumer &the unit consumed ,it is called 2 part tariff. • Here the total charge is split into 2 components 1)fixed charges 2) running charges

  18. Total charges Fixed charge Running charge Depends on the no of units consumed It is in kWhr • Depends on max. demand • It is assessed from the total connected load • It is in kW

  19. Total charge Rs (b * kW + c * kWhr) Where b - charge/kW of max. demand C – charge/ kWhr of energy consumed

  20. Advantages • Easily understood • It recovers fixed charge which depends on max. demand, but are independent of units consumed

  21. disadvantages • The consumer has to pay fixed charges irrespective of the fact whether he has consumed energy or not. • There is always error in assessing the max. demand of the consumer .

  22. Max. demand tariff • It is similar to 2 part tariff with the only difference that max. demand is actually measured by installing max. demand meter in the premises of the consumer . • This removes the objection of 2 part tariff where max. demand is assessed on the basis of total connected load.

  23. This tariff is mostly applied to big consumers. However it is not suitable fo small consumers as a separate max. demand meter is required

  24. Power factor tariff • Here the power factor of the consumer is taken into account. • P. f. plays an important role in ac systems • A low p f results in so many disadvantages like v drop, loss etc • Therefore a consumer having low p f should be penalized.

  25. Types of power factor tariffs • kVA max. demand tariff It is a modified form of 2 part Tariff Here fixed charge is in kVA not kW as kVA is inversly proportional to pf(pf = kW/kVA). Therefore a consumer having lpf has to contribute more towards fixed charges This tariff encourages the consumer to operate their equipments at improved pf.

  26. Sliding scale p.f. tariff • Also called average pf tariff. • Here average pf , say 0.8 lagging is taken as reference • Ifpf of the consumer falls below this pfsuitabe charges are made. • If pf is above this reference a discount is allowed

  27. kW and kVAR Tariff Here both active and reactive power supplied are charged separately. A consumer having lpf will draw more reactive power and hence shall have to pay more.

  28. Thank you