WHAT IS TARIFF???? TYPES OF TARIFF

Tariff (Definition)

In starting days tariffs are quit simple but as the power system grows it becomes necessary to include other parameters also like maximum demand, kVAr demand, Power factor, other cost like transmission, distribution, generation, maintenances, running cost etc. So time to time tariff changes. 

Tariff should full fill the following charges-

Now a days tariff should have the following charges that are required from generation end to consumer end and that that are listed below--

• It possess all the chargers that are required for metering, billing, cabling also meter reader salary.
• It should recover all the capital cost for generation, transmission and distribution of energy.
• It should recover all the cost of operating power plant, maintenance, supplies and even losses also.
• It should also recover the interest on the capital amount that are taken to set up power plant or its whole system.
• Tariff should be easy and understandable to public or consumer.
• It should be common for same types of consumer that is same for all domestic consumer and commercial consumer.
• In some area it should also give incentive for using power in off- peak hours.
• It also possess all the penalty for lowering power factor and exceeding maximum demand. 

over all we can say that  tariff should cover all the cost from generation end to utilization end.

Types of tariff

1. Flat Demand Rate
2. Straight Meter Rate
3. Block Meter Rate
4. Two Part Tariff
5. Three Part Tariff
6. Power Factor Tariff
7. Maximum Load Tariff

1). Flat Demand Rate-  Flat demand tariff is levied only on the total installed load or connected load. it was the first tariff. 

It is expressed as  A=Cx

C= total load 

x= Unit Charge

A= Total amount of Bill for certain period(like for month)

-If a building has 10 lamp of each 100 watt than total connected load = 1000 watt and unit charge is 2 rupees 

-so according to flat demand rate total charge would be

 A= 1000* 2=2000 RU

-Now as days this tariff is not used for domestic, commercial and industrial consumer.  

-It is used where the energy consuming hours is fixed like street lights, irrigation load.

-Disadvantage- it does not recover metering, billing and other cost.

2). Straight Meter Rate- Here charge depend up on the energy used by the consumer only. These can be expressed as 

A=Dy 

D=Unit Cost of Energy per kWh 

y=Total Energy Consumed in the given period

- It is some time used for domestic and commercial consumers.

-Advantage- Its advantage is its simplicity.

-Disadvantage- Its main disadvantage is that it does not charge the consumer if consumer has zero energy consumption although he has caused charges for readiness to serve consumer electricity. 

3). Block Meter Rate- It is little bit advance version of straight meter rate. The block meter rate charges the consumer on sliding scale of energy. 

- It can be expressed as     

                                                             A=D₁y₁+D₂y₂ +D₃y₃+……….

                                                       D₁, D₂, D₃……….= Unit Charges 

                                        y_1, y₂, y₃……….=  Block of Magnitude respectively

-In starting days of this rate, generally it is in the decreasing order that means the charge for first block of magnitude is high and afterwards it decreases.

- But now a days Ascending orders are use for tariff.

4). Two Part Rate (Hopkinson's Demand Rate)- It is basically known as Two part tariff.

-The formula for this is-    

 A=Cx+Dy

- All the notations are as stated above.

- It includes both the charges that is charge for maximum demand as well charge for energy consumed.

- D and C may be constant or depends up on the Sliding charges.

- Advantage- It include both the charges.

-Disadvantage- It creates the issue to measure the maximum demand. (it can be done by maximum demand meter or by calculating connected load).

5). Three Part Tariff (Doherty Rate)- It is basically known as Three Part Tariff.

-It is the advance version of Two part rate because it adds only a constant term in two part rate and it is expressed as-

                                                                        A=Cx+Dy+f

- All the notations are as stated above except f= Fixed Charge.

6) Power Factor Tariff- The power factor tariff is the tariff in which we consider the power factor of the consumer load.

- It is necessary to consider the power factor of the load basically for the large load like industrial because if power factor is low it will cause losses in the line as well as increasing the rating of substation equipment.

- So it is necessary to charge for low power factor.

Types of Power factor tariff-

(a) kVA Maximum Demand Tariff- In This Power Factor Tariff, Maximum demand of kVA is also included in the rate. So it becomes like two part tariff.

Total Charge= A(kVA (Maximum Demand)) + B(kWh)  

- Here unit charge for A is multiplied with the Maximum demand of Consumer.

- Reason to Include kVA- lower power factor causes increases the higher kVA consumption.

 (b) kWh and kVArh tariff-  In This Power Factor Tariff, demand of kVAr is calculated per hour just like kWh.

                                    Total Charge= A(kVArh) + B(kWh)  

- It is also just like two part tariff.

- In some cases sliding block rate is also used in this tariff that means rate of A and B varies in accordance with the sliding scale.

7). Maximum Load Tariff- In this type of tariff, maximum load is calculated on daily basis and charged accordingly.

- When the power consumption is high then it is known as ON-Peak Tariff and if consumption is low then it is known as OFF-Peak Tariff.