Time of Day (ToD) Tariff

The Time of Day (ToD) tariff by the distribution licensees to its consumers is as approved by the Appropriate Commission for that particular category of consumer. In most of the States the ToD tariff is applicable for Commercial and Industrial consumers. In some of the States ToD Tariff is applicable for other e.g. domestic and agricultural consumers also.

Ministry of Power has issued the Electricity (Rights of Consumers) Amendment Rules, 2023 wherein the rule for Time of Day (ToD) Tariff has also been specified. The main features of these Rules are:

  1. ToD tariff for Commercial and Industrial consumers having maximum demand more than 10kW shall be made effective from a date not later than 1st April, 2024 and for other consumers except agricultural consumers, the ToD tariff shall be made effective not later than 1st April, 2025.
  2. ToD tariff shall be made effective immediately after installation of smart meters for the consumers.
  3. ToD tariff, during the peak period of the day, for Commercial and Industrial consumers shall not be less than 1.20 times the normal tariff and for other consumers it shall not be less than 1.10 times the normal tariff.
  4. Tariff for solar hours, of the day, to be specified by the State Commission shall be at least twenty percent (20%) less than the normal tariff for that category of consumers.
  5. ToD tariff shall be applicable on energy charge component of the normal tariff.

Advantages of ToD

The advantages for use of ToD tariff system to consumers are:

  1. The ToD tariff comprising separate tariffs for peak hours, solar hours and normal hours, sends price signals to consumers to manage their load in accordance with the Tariff. Since, the tariff during the solar hours will be at least 20% less than the normal tariff, the consumer can shift consumption during solar hours when power cost is less and can be benefitted.
  2. With awareness and effective utilisation of ToD tariff mechanism, consumers can reduce their expenditure on electricity consumption.
  3. It optimizes generation capacity, helps utilities in maintaining load– generation balance and in reducing financial burden for arranging costly power to meet peak load, which ultimately would be beneficial to the end consumers.
  4. It also improves the management of renewable generation fluctuations and incentivises more consumption during the periods of Renewable Energy generation, thereby providing benefits to consumers with availability of reliable and cleaner power at reasonable rates.