In today’s world, the power system is interconnected and it supplies more consumers. A big organization, economy, management, and control come into account automatically. Suppliers sell the electricity at some rate that will cover all the generation, distribution, transmission, employees salary, depreciation and interest and also profit that target by the company. A tariff is a term used as a rate to sell electric energy to consumers. The generation of electricity costs depends on various factors. They are maximum demand, demand factor, load factor, connected load, plant capacity factor, use factor, and diversity factor. These will turn and depend upon the load condition and type of load. To fix the tariff, we have to see the requirements and various consumers. Because of this, the whole step or process gets complicated in Cirro Energy .
Types of energy rates
Simple rates – In this energy rate, the rates will be fixed and applied for every unit of the energy consumed. It is called uniform rates. The quantity of energy does not depend on the rate per unit of energy that is used by the consumer. The energy price per unit is always constant in this plan. Every energy is recorded by an energy meter. It was the simplest method and easy to understand and easy to apply. Each consumer has to pay according to his usage. In this plan, there is no discrimination for different types of consumers. Unit cost is high while compared to other plans and there are no incentives. Generally, it is applied in tube wells that are used for irrigation purposes.
Flat rates – In this plan, the cost per unit is different for different types of consumers. Consumers are grouped into different categories. There will be no same type of consumers in a group. Charges for each category is a fixed rate which is similar to simple rates. According to consumers, different rates will be decided. It is fairer for some consumers. There will be simple calculations. A particular rate will be charged for a particular consumer and there are no incentives for consumers. Different rates will be decided based on different loads, separate meters will be installed for different loads such as power loads, light loads, etc. It will make every arrangement expensive and complicated. This plan will be applied to domestic consumers.
Block rate – In this plan, the consumption of energy in the first block is charged at a given rate. Then the succeeding block will charge progressively. Each block with a rate per unit is fixed. For example, first 50 unit will be charged as 3 rupees per unit then the next 30 unit is 2 rupees per unit and so on. Only one energy meter is enough. Consumers get incentives due to decreased rates. More energy will be used by consumers. Load factor is improved and the cost of generation is reduced. In some cases, the consumer does get any energy in any month then the supplier needs not to charge any money for that connection provided to the consumer as an own cost. This plan will be applied to small commercial consumers and residential consumers. It is more useful for all small companies to reduce the cost of electricity. Therefore it is slightly different from other plans.