What is TOU tariff that has sparked outrage in Bihar over rising power rates?

Patna: (ABN) In its tariff order issued by the government, the Bihar Electricity Regulatory Commission (BERC) - primarily acting on the demands of consumer representatives, particularly the Bihar Industries Association - has made the Time of Day (ToD) tariff mandatory within the retail tariff orders issued for both distribution companies. This supply will be applicable to both distribution companies in the state: North Bihar Power Distribution Company Limited (NBPDCL) and South Bihar Power Distribution Company Limited (SBPDCL). This move is in sync with the Ministry of Power's Consumer Rights (Amendment) Rules, 2023, and the National Tariff Policy, 2016.

Following long-standing demands from consumer organizations such as Priya (Energy Group) and Resident Welfare Associations, the Time of Day (ToD) tariff has been implemented in more than 22 states and Union Territories across the country. Under these regulations, effective from April 1, 2024, or earlier, the Time of Day (ToD) tariff has been made mandatory for commercial and industrial consumers with a maximum demand of more than 10 kilowatts. Furthermore, according to the National Tariff Policy (NTP), consumers equipped with smart meters can benefit by better managing their demand during 'peak' (high demand) and 'off-peak' (low demand) hours.

The Energy Department states that the objective of this system is to provide electricity to consumers at a lower cost and balance electricity consumption. Under the new system, electricity will be cheaper from 9:00 AM to 5:00 PM (off-peak hours), while rates will be higher from 5:00 PM to 11:00 PM (peak hours). The standard rate will apply from 11:00 PM to 9:00 AM. Notably, all consumers equipped with smart meters will benefit from this initiative.

It is worth noting that the facility of 125 units of free electricity is still in effect in the state. Consequently, the monthly electricity bills of approximately 90% of domestic consumers become zero. The implementation of the ToD (Time of Day) tariff will not cause any inconvenience to consumers. On the contrary, they will be able to make even more savings by utilizing this system.

According to experts, if consumers shift a portion of their electricity usage from peak hours to off-peak hours, a monthly savings of up to ₹90 is possible. This will not only reduce consumer expenses but also decrease the pressure on the power grid. For instance, if a domestic consumer shifts just 2 units of daily electricity consumption from the evening peak hours to daytime hours, the result is a daily savings of ₹2.96 — which translates to approximately ₹89.00 per month. These savings can be achieved simply by adjusting the time of usage, without reducing the overall volume of consumption.

Similarly, for all domestic consumers equipped with smart prepaid meters or having a connected load of more than 10 kilowatts: the standard rate will apply to 10 hours of daily consumption; 80% of the standard rate will apply to 8 hours of usage; and a rate just 10% higher than the standard rate will apply to the remaining 6 hours of usage. If consumers plan their electricity usage according to the aforementioned schedule, they will experience significant savings on their electricity bills.

The ToD tariff is a billing system in which electricity prices vary based on the time of use. For consumers who shift their electricity consumption to off-peak hours — particularly from 9:00 AM to 5:00 PM — electricity rates will be lower. This is because solar energy production is at its peak during this period. In contrast, electricity rates will be higher during peak hours (from 5:00 PM to 11:00 PM), as this is when electricity demand is highest. Consequently, power distribution companies are forced to purchase electricity from the market at higher rates. These increased costs associated with expensive electricity purchases are included in the overall tariff determination. Ultimately, this financial burden is passed on to consumers through an increase in the per-unit rate.

Standard rates will apply during the normal period from 11:00 PM to 9:00 AM. This will apply to all consumers — except the agricultural sector — with a contracted demand of more than 10 kilowatts. It will also apply to all consumers equipped with smart meters. Additionally, the Energy Department has appealed to consumers to use energy-saving appliances and schedule the use of electricity-intensive appliances during daytime hours, thereby enabling them to take advantage of lower rates and reduce their electricity bills.

The ToD tariff will apply to all consumers — except the agricultural sector — with a contracted demand of more than 10 kilowatts. It will also apply to all consumers equipped with smart meters. Furthermore, the Energy Department has appealed to consumers to use energy-saving appliances and schedule the use of electricity-intensive appliances during daytime hours, thereby enabling them to take advantage of lower rates and reduce their electricity bills.