Shifting power consumption to non-peak periods could help such consumers save on electricity bills, although those unable to adjust their usage patterns may experience higher expenses.
Published Dec 14, 2024 | 9:00 AM ⚊ Updated Dec 14, 2024 | 9:00 AM
Under the new tariff structure, consumers will benefit from a 10% reduction in energy charges during off-peak hours. (iStock)
The Kerala State Electricity Regulatory Board approving a proposal of the state power supplier to implement a Time-of-Day (ToD) tariff system is likely to affect a huge number of domestic consumers, whose consumption exceeds 250 units.
The Regulatory Board approved the Kerala State Electricity Board (KSEB)’s proposal to promote energy efficiency and manage peak-hour power demand. T
The move is set to impact 7.87 lakh domestic consumers, whose monthly electricity usage exceeds 250 units. (Kerala has 5,31,528 single-phase consumers and 2,56,462 three-phase consumers, who consume 250 + units, totalling 7,87,990 consumers).
The ToD aims to incentivise off-peak consumption while discouraging power usage during peak periods.
Under the new tariff structure, consumers will benefit from a 10% reduction in energy charges during off-peak hours (6 am to 6 pm), encouraging households to shift energy-intensive activities like laundry, dishwashing, and air conditioning to these times.
However, peak-hour consumption, between 6 pm and 10 pm, will see a 25% increase in tariff rates. This adjustment is intended to manage the high demand during evening hours, a period often associated with greater stress on the power grid.
For households consuming more than 250 units per month, the ToD system aims to encourage behavioral changes that align with sustainable energy use. Shifting power consumption to non-peak periods could help such consumers save on electricity bills, although those unable to adjust their usage patterns may experience higher expenses.
The ToD tariff system is part of KSEB’s broader strategy to bridge its revenue gap while addressing operational challenges and rising energy demands.
With over 140 lakh consumers in the state and annual consumption exceeding 30,000 million units, KSEB faces mounting costs to maintain and expand infrastructure for electricity generation, transmission, and distribution. The board’s current liabilities include loans and operational expenses for assets worth more than ₹30,000 crore.
Documents related to KSEB show that the electricity demand is growing at an annual rate of 5–6%, with peak demand already reaching 5,800 MW.
Last year alone saw a 13% surge in electricity usage. To meet this escalating demand, the board is compelled to make substantial investments in its infrastructure. By implementing the ToD tariff system, KSEB aims to reduce its reliance on expensive power purchases during peak hours while promoting a more equitable distribution of power usage.
Additionally, KSEB has framed the initiative as revenue-neutral, proposing adjustments to tariffs during off-peak and normal hours to ensure minimal financial strain on consumers. This system also addresses a key issue: Frequent power outages and transformer failures caused by the unexpected spike in off-peak consumption, especially during summer months.
Meanwhile, one of the primary hurdles that KSEB faces in rolling out the ToD tariff system is the replacement of existing meters with ToD-compatible energy meters.
Around 2.9 lakh meters need to be replaced initially, and the state currently has over 7.87 lakh domestic consumers in the target category.
The cost of these meters is estimated at ₹630 for single-phase connections and ₹1,300–₹1,500 for three-phase meters. The total project cost is expected to be ₹20 crore.
Despite the logistical challenges, KSEB is optimistic about the scheme’s success. The board has already submitted a tentative schedule for meter replacement to KSERC for approval. Once implemented, the system will ensure accurate billing and better monitoring of energy consumption patterns.
While the ToD tariff offers financial incentives for energy-efficient practices, it also raises concerns among consumers, especially those unable to shift their consumption to off-peak hours.
For families with working professionals or students who rely on electricity during peak hours for lighting, cooling, and internet usage, the 25% tariff hike could result in significantly higher monthly bills.
Critics also point out that the ToD system may disproportionately affect lower-income households in the target group, as they may lack the flexibility to adjust their consumption schedules. Furthermore, the high upfront cost of replacing energy meters, though borne by KSEB, might eventually be passed on to consumers through future tariff revisions.
“During summer, our power consumption automatically goes up because we rely more on fans/coolers/air conditioning to beat the heat. With the new ToD tariff and the higher rates during peak hours, it’s going to hit our monthly bills hard. We just don’t have the option to cut down usage during those times,” Radhika, a housewife from Kollam, said.
The Opposition and consumer associations have criticised the Board, accusing it of shifting the burden of its crisis onto the common people. They argue that the current situation is a result of its inefficiency and mismanagement, which has worsened its financial instability and led to public outcry over increased tariffs and poor service.
Preliminary analysis of consumption patterns in Kerala indicates a gradual shift toward off-peak usage.
Between December 2023 and May 2024, off-peak consumption increased from 37.49% to 40.22%, highlighting the potential effectiveness of ToD incentives. KSEB also sees this move as a step toward reducing the state’s overall energy costs, particularly during summer months when demand spikes and power purchase costs rise sharply.
To further optimise energy usage, KSEB is considering extending the peak-hour tariff window until 11 pm, though implementing this change would require extensive reprogramming of existing systems.
The Board thinks that the introduction of the ToD tariff system underscores its commitment to sustainable energy practices and efficient resource management.
By encouraging consumers to shift their usage to non-peak periods, the board hopes to alleviate pressure on its infrastructure while promoting energy savings for households.
However, the initiative also highlights the need for consumer education and support to ensure a smooth transition. Public awareness campaigns and technical assistance will be crucial in helping consumers adapt to the new system without undue financial burden.
The state’s power demand is met through a mix of internal sources, central stations, private generators, and power exchanges.
The state’s peak demand in 2022-23 reached 4,517 MW, a 3.12% increase from the previous year, while total energy consumption rose by 5.83% to 25,383.77 MU.
The installed power capacity as of March 31, 2023, stands at 3,514.81 MW, dominated by hydropower (61.84%), followed by solar (20.9%), thermal (15.27%), and wind (2%).
Of this, the state sector contributes 65.43%, the private sector 24.33%, and the central sector 10.23%.
The Kerala State Electricity Board Limited (KSEBL), responsible for generation, transmission, and distribution, operates 41 hydropower stations, two thermal plants, solar facilities, and a wind farm. However, high production costs limit reliance on thermal energy.
It is being pointed out that to support industrial growth and development, Kerala must enhance its internal generation capacity by prioritising renewable energy projects and investing in innovative research to harness its energy resources effectively.
(Edited by Majnu Babu).
