Electricity Bills in India - Components, Tariffs, and Charges

What Are The Components of An Electricity Bill?

• Fixed Charge: The fixed charge varies according to the consumer’s sanctioned load. This refers to the total of the load generated from all the electrical devices within the consumer premises. The overall network infrastructure is laid by DISCOM, and the FC is levied to recover this cost. The fixed charges also vary with consumer categories, depending on the sanctioned load and paying capacity.
• Energy Charge: Energy change is the amount of energy consumed, and it is levied to recover the cost of electricity purchased by the DISCOM. The charges will increase with the number of units consumed.
• Electricity duty or Tax: Electricity bills also include the electricity duty or tax which is charged on the overall electricity cost. This charge varies across states, but the state government has fixed the charge to be 9.00% of the consumer’s total electricity consumption.
• Fuel Cost Adjustment Charge (FAC): FAC is a hike brought about to align with the increase in fuel/coal prices every month. This is passed on by the electricity generation utilities to DISCOMs, which in turn is imposed on customers. This is charged monthly and revised quarterly.
• Penalty: A surcharge of 2 paisa/unit is levied as penalty if the power factor is found to be less than 0.85 lag. The power factor is the fraction of total power supplied by actual power consumed by a consumer. This penalty is levied on a monthly basis during the billing process.
• Interest: An interest rate of 1.00% is charged monthly for late payments.
  If solar water heaters are used, there is a refund of 50 paise per unit of electricity used (Subject to a maximum of INR 50/installation/month). This is charged to encourage consumers to conserve energy or use energy efficiently.
• Incentives: If the bill amount exceeding Rs. 1 lakh is paid 10 days before the due date and the bill is paid through the electronic clearing system. then, Rs. 1000 will be paid as an incentive for the next month’s bill. Incentives of 0.25% will be given.
• Arrears: This section represents pending payments of the previous month that are added to the current month’s bill.
• Other Charges: Other charges include ‘Urban Cess’, ‘Water Conservation Cess’, etc., which DISCOM charges on behalf of municipal bodies, industries, and others.
• Tariffs: There are two types of tariff codes - Low tension (LT) and High Tension (HT). LT codes are typically used for personal offices and home connections. HT codes are generally used for huge industries and complexes.
• Category: You must also check the category of the connection like residential, industrial, or commercial. Your electricity bill is generated depending on the tariff and also the category.Hence, it is your responsibility to check that your bill is being generated under the correct category and tariff.
• Units Consumed: The number of units consumed is measured in KWH (Kilowatt per hour). It is consumed monthly. The total units consumed is computed based on the usage of electricity. Your electricity bill will be lower when the units consumed are fewer.

What is the Tariff on Electricity Bill?

The rate structure or pricing plan set by the utility company that determines how electricity usage is billed is called the tariff. Various tariff structures can include flat rates, tiered rates, or time-of-use rates. Let us now proceed to understand the tariff structure and charges mentioned in the electricity bill.

Tariff Structure:

• Tariff structure: Tariff structure determines the prices at which the units consumed are chargeable. It indicates how much the rates have spiked up based on the increase in consumption.
• Fuel Surcharge: Even if the tariff structure remains the same, the cost of generation may vary on a monthly basis. The surcharge is the change in the expense for electricity generation. It is measured per unit.
• Electricity Duty: Some states in India levy duty charges for electricity.
• Fixed charges: This charge is levied on the type of connection and the connection load.
• Units consumed: Units consumed are seen on the meter. Based on this, the electricity bill is calculated.

How to Compute the Electricity Bill?

The electricity bill is based on the number of units consumed. There is no particular formula to compute the electricity bill. For instance, the charges will be varied for the first 200 units and the units above Rs. 200. You can compute your electricity bill in the following three ways:

1. You can easily compute your electricity bill online on the official website of your electricity board.

2. You can do it on the portals that give this facility.

3. Manually compute the electricity bill amount.

To Compute The Electricity Bill on Portals

The process of computing the electricity bills may vary across portals, but the steps will be similar. All you have to do is go to your board’s official website, find the bill calculator, and fill in the details. Then, you will be done. Let us take an example of the Tamil Nadu Electricity Board - TANGEDCO. Here are the steps for computing

Step 1: Go to the website of Tamil Nadu Generation and Distribution Corporation Limited (TANGEDCO).

Step 2: Use the calculator on the website to compute your electricity bill.

Step 3: Fill in the details including billing cycle, no. of units consumed, contracted load, etc.

Step 4: Once all the details are added, press enter.

Step 5: Your electricity bill amount will be displayed on the screen.

Step 6: You will be able to view the fixed charges amount, electricity tax amount, electricity duty amount, and more.

To Compute The Electricity Bill Amount Manually

Here are the steps to determine the electricity bill manually in kilowatt-hours.

Step 1: Find the present meter reading and the previous meter reading on your electricity meter or utility bill. The readings are typically labelled as “Current” and “Previous” or “Start” and “End”

Step 2: Deduct the previous meter reading from the current meter reading. This will result in the difference in kilowatt-hours consumed during the period of billing.

Step 3: Make a note of digits after the decimal point in the readings. Some meters may show readings with decimal places, such as 2345.5 kWh.

Step 4: Compute the energy consumption in KWH by deducting the previous reading from the present reading. If there are decimal places, subtract them individually.

Step 5: If the readings have decimal places, subtract the decimal portion of the previous reading from the decimal portion of the current.

Step 6: Add the difference in whole numbers to the difference in decimal numbers to obtain the total kilowatt hours used during the billing period.

Let's take an example:

Current meter reading = 2000 Kwh

Step 1: Current reading - previous reading = 2000 Kwh - 1500 Kwh = 500 Kwh

The energy consumption between the two-meter readings is 500 Kilowatt hours.

Note: It’s important to check the unit of measurement. The calculation process may vary slightly if a different unit of measurement is used other than Kwh. Ensure that you have accurately computed your energy consumption.

Modes of Paying The Electricity Bill

1. Online Payment Methods

• Credit Card
• Debit Card
• Netbanking
• E-wallets
• UPI

Steps to Pay The Electricity Bill Online Through Netbanking

Step 1: Visit the official website of the state electricity board

Step 2: Log in to the customer portal using your credentials

Step 3: Post logging in, you can view your bill amount.

Step 4: Once you choose the amount to pay, proceed with paying

How To Pay Your Electricity Bill Through e-wallets?

Step 1: Visit the e-wallet website

Step 2: Log into the e-wallet website or mobile app through which you want to pay your electricity bill.

Step 3: Click on the ‘Electricity’ section on the main page and you will be forwarded to a new page.

Step 4: Choose the state in which you reside and the electricity board.

Step 5: Enter either the ‘Consumer ID’ or the ‘Account ID.’

Step 6: Click on 'Proceed'

Step 7: You can now see the bill, and know the amount that you will have to pay

Step 8: Now, proceed to complete your bill payment.

Step 9: Post making the payment, you will get a confirmation for the same.

2. Offline payment

Tips To Reduce Electricity Bill At Home

1. Turn off vampire appliances like television sets, computers, Xbox, etc. They drain off more power. It’s not just enough to turn off the appliances but also the power strips should be turned off.

2. Use big appliances with high energy consumption smartly: Running appliances like your geyser, washing machine, dishwasher, AC, etc. can consume a lot of energy. If you limit the consumption of these appliances smartly, then you can save energy. Also, you should get such appliances with 5 star ratings because they are designed to be power efficient and consume lower amounts of energy.

3. Use electric bulbs and ceiling fans efficiently: Electric bulbs can be a huge contributor to your electricity bills. The same is true for ceiling fans. Make sure to switch off ceiling fans and electric bulbs when you come out of the room. Also, you can use directional lights such as study lamps to reduce your energy consumption.

4. Old appliances require more energy than new ones: As the appliance gets older, its efficiency goes down. This is the primary reason why using old appliances may give you higher energy bills.

5. You don’t have to put your devices on charge all the time: You don’t have to put your devices on charge always. In case, you charge them frequently, you have to repeatedly change the batteries. Also, turn off the chargers from the supply when you are not using them.

States and Their Corresponding Electricity Boards

FAQS on Electricity Bill: