Restructuring of Industrial Power Tariffs

 Power tariffs for industrial consumers have been restructured to reduce the incidence of cross-subsidies to other power consumers.

The variable component of the base tariff has been reduced from Rs. 32.03/kWh to Rs. 25.94/kWh during off-peak hours and from Rs. 37.83/kWh to Rs. 35.24/kWh during peak hours. However, considering various surcharges and the fixed charge yields a final power tariff ranging from Rs. 42.11/kWh (15.1 cents/kWh) to Rs. 48.59/kWh (17.42 cents/kWh), depending on actual consumption.

 The effective variable charge, considering various surcharges is as follows: Table 2. Breakdown of Industrial B3 Power Tariff Variable Component (Rs/kWh)  CURRENT PROJECTED OFF-PEAK HOURS 32.03 25.94 PEAK HOURS 37.83 35.24 AVERAGE 33.48 28.265 QTA-2 2.75 2.75 QTA-3  1.9 FC SURCHARGE 3.23 3.23 FPA (MAY 2024) 2.84 2.84 ELECTRICITY DUTY 0.35 0.35 TOTAL (SURCHARGES) 9.17 11.07 EFFECTIVE VARIABLE CHARGE FOR B3 (BEFORE REBASING AND TARIFF RATIONALIZATION) 42.65 39.335 EFFECTIVE VARIABLE CHARGE FOR B3 (AFTER REBASING AND TARIFF RATIONALIZATION) 48.37 (17.3 cents) 39.33 (14.1 cents)  • At the same time, the fixed charge in the two-part tariff has been increased by 300% from Rs. 500/kW/month to Rs. 2000/kW/month, applicable on “billing demand”, i.e., 50% of the sanctioned load or actual maximum demand1 (MDI) recorded in a month, whichever is higher.   1 “Maximum Demand” is the maximum of the demand obtained in any month measured over successive periods each of 30 minutes duration.

• When considering both the variable and fixed components of the power tariff, the effective power tariff per kWh consumed will significantly vary from consumer to consumer based on their actual power consumption and the maximum demand indicator (see figures 1-3, below). • Accordingly, the lowest possible per unit distribution of the fixed charge comes out to Rs. 2.78/kWh in the highly unlikely scenario where power consumption is equal to maximum demand 24 hours a day, 30 days a month, resulting in a lower bound effective power tariff of Rs. 42.11/kWh (15.1 cents/kWh).  • For different scenarios where average power consumption is lower than the maximum demand, the effective power tariffs are as follows: • Note that the fixed charge is applicable on the maximum demand OR 50% of sanctioned load, whichever is higher. In cases where the fixed charge is based on 50% of sanctioned load, the same analysis holds for different levels of power consumption as % of 50% of sanctioned load.