Energy Tariff

Definition of Tariff

The rate at which electrical energy is supplied to the consumer is called tariff.

Objectives of Tariff

• Recovery of the cost of producing electrical energy.
• Recovery of the cost of capital investment in transmission and distribution systems.
• Recovery of the cost of operation and maintenance.
• Suitable profit of the capital investment.

Desirable Characteristics of Tariff

• Proper return
• Fairness
• Simplicity
• Reasonable profit
• Attractive

Types of Tariff

• Simple or Uniform tariff
• Flat rate tariff
• Block rate tariff
• Two part tariff
• Maximum demand tariff
• Power factor tariff
• Three part Tariff

Types of Power Factor Tariff

• kVA maximum demand tariff
• Sliding scale tariff
• kW and kVA tariff