Rates are the different methods of charging the consumers for the consumption of electricity. It is
desirable to charge the consumer according to his maximum demand (kW) and the energy consumed
(kWh). The tariff chosen should recover the fixed cost, operating cost and profit etc. incurred in generating
the electrical energy.
3.4.1 REQUIREMENTS OF A TARIFF
Tariff should satisfy the following requirements:
(1) It should be easier to understand.
(2) It should provide low rates for high consumption.
(3) It should encourage the consumers having high load factors.
(4) It should take into account maximum demand charges and energy charges.
(5) It should provide less charges for power connections than for lighting.
(6) It should avoid the complication of separate wiring and metering connections.
3.4.2 TYPES OF TARIFFS