Brace up for bigger peak hour power bill soon

Running the air conditioner or refrigerator during peak hour may cost dear as the Centre is mulling a higher peak hour tariff on domestic electricity consumers.

The working group of the Planning Commission on power has recommended the introduction of peak hour and off peak hour tariff for domestic consumers to discourage power consumption during peak hours. The suggestion for peak hour tariff, which is also called “Time of day” tariff, where the rate is slightly higher during the peak period compared to non peak hour, was made to reduce consumption of scarce power during peak hours. 

The committee also suggested setting up of four gas based power plants of 400 MW each in four metros cities with proper regulatory support, during the 12th plan (2012-2017) and before introducing peak hour tariff. 

The panel has also recommended setting up a task force under Central Electricity Regulatory Commission (CERC) to deliberate upon various aspects associated with setting up of peaking plants and creation of required system before introducing the peak hour power tariff.

“There is need for measures like having separate tariff for peak and off peak hour consumption and regulation to enable fixed cost of peaking plants to be fully recovered during peak hour operation”, the report said.

However, the implementation of differential tariff would necessitate the installation of advanced metering systems to get real-time information on the price of power, based on availability and procurement cost. This metering system, already in vogue in the US and European countries, will have the option of making energy consumption a matter of informed choice as consumers will be able to shift their power usage to non-peak hours, thereby saving on power cost.

“Peak period generally refers to the 6-10 pm slot when electricity consumption is high compared to other  times. (In the West, metered consumption is generally divided into three slots 6-10 pm, 10 pm-5 am and 5 am-6 pm). There has always been a mismatch between power tariff and the cost of generating electricity, which is hurting the financial health of power distribution companies (Discoms)”, a senior official in the Ministry said.

Currently in India, 17 states have introduced the ‘Time of Day' (ToD) tariff system for large industrial and commercial category consumers. In Karnataka, the Electricity Regulatory Commission (KERC) has ordered introduction of ToD from September 1 this year for industrial consumers. ToD system would help streamline power supply and prevent load-shedding during peak hours. The ToD system may require industries to reschedule work shifts while power utilities have to install special meters that could record the time of consumption. The country is faced with a power deficit of over 8 per cent while average peak hour electricity supply fell short by over 11 per cent.