Electricity tariff, components, and its types
The key components of an electricity tariff are structured to cover the costs of generation, transmission, distribution, and regulatory requirements, while ensuring fairness and incentivizing efficient energy use. Here are the main components: 1. Energy Charges (kWh or Variable Charges): Charges for the actual electricity consumed. Measured in kilowatt-hours (kWh). Includes costs associated with power generation and fuel. 2. Demand Charges (kW or Fixed Charges): Charges based on the maximum demand (kW) during a billing cycle. Applies primarily to commercial and industrial consumers. Encourages consumers to manage peak demand. 3. Fixed Charges: A fixed monthly charge regardless of electricity consumption. Covers administrative and infrastructure costs. 4. Transmission and Distribution (T&D) Charges: Costs associated with transmitting and distributing electricity from power plants to end users. Includes line losses and maintenance costs. 5. Wheeling Charges: Applicable in open access...