Electricity Bill in India - Components, Tariff Structure and Charges

1. Fixed Charge: The fixed rate fluctuates based on the authorized load of the customer. This is the sum of the loads produced by every electrical gadget on the customer's property. The FC has been imposed to recover the cost of DISCOM's installation of the whole network infrastructure. Depending on the authorized load and the customer's ability to pay, the fixed fees also differ for different consumer categories.
2. Energy Charge: The cost of electricity purchased by the DISCOM is recovered using the energy consumed which is calculated on the amount of energy consumed. 

1. Electricity duty or Tax: Electricity bills also include the electricity duty or tax which is levied on the overall cost of the electricity. This charge varies from one state to another, but the state government has fixed a charge of 9.00% on the consumer’s total electricity consumption.
2. Fuel Cost Adjustment Charge (FAC): The FAC raise was implemented to keep up with the monthly increases in the price of coal and fuel. The utilities that generate electricity transmit this on to DISCOMs, who then impose it on consumers. This is updated every three months and paid monthly.
3. Penalty: If the power factor is found to be less than 0.85 lag, there is a penalty of 2 paisa per unit. The percentage of total power supplied by a consumer's actual power consumption is known as the power factor. This penalty is assessed throughout the billing process once a month.
4. Rebate: If solar water heaters are used, then DISCOM offers a rebate of 50 paisa per unit on the electricity consumed. This is done to encourage consumers to conserve energy and use it efficiently.
5. Interest: Depending upon the days delayed for payment, an interest rate of 1.00% is levied per month for late payments. 

1. Incentives: If a bill that exceeds Rs.1 lakh is paid using the electronic clearing system ten days before the due date. Next, a reward of Rs.1000 will be applied to the bill for the following month. There will be a 0.25% incentive.
2. Arrears: This section denotes pending payments of the previous month which are added to the next month’s bill.
3. Other charges: Other charges include ‘Urban Cess’, ‘Water Conservation Cess’, etc., which is levied by DISCOM on behalf of municipal bodies, industries and others.

1. Tariff: When you receive your electricity bill, there are two things that you must initially look at - tariffs and category. There are two types of tariff codes - Low Tension (LT) and High Tension (HT). LT codes are usually used for personal offices and housing connections. HT codes are generally used for larger industries and complexes.
2. Category: You must also check the category under which your connection falls. You must check whether your connection category is residential, industrial, or commercial.

Based on your tariffs and category, your electricity bill is generated and hence, it is your responsibility to check that your bill is being generated under the right tariff and category.

1. Units consumed: Units consumed is nothing but the number of KWH (Kilo-Watt per hour) consumed in one month. If you keep a 100-watt bulb switched on for 10 hours, then there is a consumption of 1 KWH. The calculation of total units consumed is done on the basis of your electricity usage. The lesser the units consumed, the lower will be your electricity bill amount.

What is an Electricity Bill Tariff?

A tariff on an electricity bill refers to the pricing plan or rate structure set by the utility company, which outlines how electricity consumption is charged. Tariffs can vary and may include flat rates, tiered rates based on usage, or time-of-use rates that charge differently depending on the time of day. Understanding the tariff structure helps in interpreting the charges listed on your electricity bill.

Tariff Structure and Charges

It is important to understand the tariff structure and charges mentioned in your electricity bill so that you are aware of what you are being charged.

1. Tariff structure: The pricing at which the units consumed are chargeable is determined by the tariff structure. It shows the extent to which rates have increased in response to the rise in consumption. 
2. Fuel surcharge: The cost of generation may vary on a monthly basis even though the tariff structure may remain consistent. The surcharge is the change in the cost of electricity generation. The surcharge is applied per unit.
3. Electricity duty: Some states in India apply duty on supply for electricity.
4. Fixed charges: This is generally a fixed amount which is generated upon the type of connection and the connection load.
5. Units consumed: Based on the reading on the meter, you can determine the number of units consumed and the amount you will be charged accordingly.

Electricity Bill Payment Modes Explained

You can pay your electricity bill both online and offline. If you wish to pay your electricity bill online, you can do so using your credit card, debit card, Net Banking, e-wallets, and UPI.

If you wish to pay your electricity bill offline, you can do so using your credit card, debit card, UPI, cheque, demand draft, and cash.

How to Pay Electricity Bill Online?

The process to pay your electricity bill online is given below:

1. Visit the official website of the state electricity board
2. Log in to the customer portal using your credentials
3. Once you have logged in, you can view the bill amount. You will most likely get the 'Quick Pay' option where you have the option of paying the entire amount or an amount of your choice.
4. Once you have chosen the amount you wish to pay, click on 'proceed'
5. Select the mode of payment, and provide the details required
6. You will be taken through the payment gateway section. Enter the relevant details such as 'One Time Password' (OTP) and click on 'Submit'
7. Your payment has been completed. You will receive the receipt of your payment which you can save for future reference

Note: Payment portal for different boards may be different

Steps to Pay Your Electricity Bill Online via Net Banking 

The process to pay your electricity bill online can vary depending on the portal, but here are the common steps: 

1. Visit the official website of the state electricity board 

1. Log in to the customer portal using your credentials 

1. You can view the amount of your bill after logging in 

1. After choosing the amount to pay, make the payment. 

Paying Electricity Bills via E-Wallets

There are various e-wallets such as Paytm, Amazon Pay,  MobiKwik , Freecharge, etc., where you can directly pay the electricity bill . We will list down the steps that you will have to employ in order to pay your electricity bill using e-wallets below:

1. Go to the e-wallet website 

1. Sign in to the mobile app or e-wallet website where you wish to pay your electricity bill 

1. You will be taken to a new page after clicking on the Electricity section on the home page 

1. Select the electrical board and the state in which you reside 

1. Enter either Account ID or Consumer ID 

1. Select Proceed 

1. You can now see the bill and determine how much amount you must pay 

1. Go through and finish paying your bill 

1. You will receive confirmation after you complete the payment. 

How to Pay Electricity Bill Offline?

You can pay your electricity bill offline by visiting the nearest section office. You can then complete the payment of your electricity bill offline by swiping your credit card, debit card, pay using UPI, through cheque, demand draft in the name of the electricity board, or by simply paying through cash.

How Is the Electricity Bill Calculated? 

The electricity bill is determined by the number of units consumed, and there isn't a fixed formula for its calculation. Charges may vary for the initial 200 units and any units exceeding that threshold. You can calculate your electricity bill using one of the following methods: 

1. Utilize the online billing feature available on the official website of your electricity board. 
2. Use dedicated portals that offer this service. 
3. Calculate the electricity bill manually. 

How to Use Online Portals to Calculate Your Electricity Bill

The process of calculating electricity bills may vary slightly across different portals, but the general steps remain similar. Here's how you can compute your electricity bill using an example: 

1. Go to your electrical board's official website. Please be aware that not every board can calculate bills online 

1. Look for the online electricity bill calculator option 

1. Click the choice if it is available, then input the necessary information, including the billing period, meter readings, and any other details 

1. To determine your bill, follow the instructions provided on the page. 

Tariff Determination in Electricity Billing

Tariff determination for electricity is overseen by the State Electricity Regulatory Commissions (SERCs) to balance the financial stability of utilities with consumer interests. The pricing varies by factors such as consumer category, load factor, and state-decided subsidies. Three key parameters define tariff determination:

1. Aggregate Revenue Requirement (ARR): ARR represents the total revenue a distribution company (DISCOM) must collect to cover operational costs, including power procurement, distribution, and transmission. It ensures the utility recovers legitimate costs and provides a reasonable return to investors.

ARR can involve cross-subsidization, where different consumer categories pay varying rates to ensure affordability for certain groups.

2. Average Cost of Supply (ACoS):  ACoS calculates the average cost incurred by a DISCOM to supply electricity per unit (kWh). It serves as a reference for setting tariffs, ensuring utilities can meet financial obligations.

ACoS differs across consumer categories, and cross-subsidization ensures that no category exceeds 120% of ACoS.

3. Average Billing Rate (ABR):  ABR reflects the expected revenue from each consumer category, based on fixed and variable charges. It provides insights into how much the utility expects to collect for electricity consumed and guides tariff setting.

ABR includes energy charges (based on consumption), demand charges (based on capacity usage), and minimum charges (paid monthly, regardless of usage).

Tariffs are typically a mix of these components and vary by state and consumer category, such as residential, commercial, and industrial.

States and Their Respective Electricity Boards in India

How to Find the K Number or Consumer Number of Your Electricity Board

The K number or the consumer number is a unique number assigned to any customer who has availed electricity connections for themselves. You can use the consumer number to find details of their electricity bill such as the billing amount, units consumed, history of your bill payment, customer support, etc. The consumer number can be found easily on the electricity bill. 

Tips to Reduce Electricity Bill at Home

1. Unplug Idle Devices: Electronics like TVs, computers, gaming consoles, etc., continue to draw power even when turned off. Make sure to switch off the power strips they’re connected to as well, to prevent unnecessary energy use.

2. Use High-Energy Appliances Wisely: Appliances such as geysers, washing machines, dishwashers, and air conditioners consume a lot of electricity. Use them efficiently to save energy. Opt for appliances with a 5-star energy rating, as they are designed to use less power.

3. Optimize Use of Lights and Fans: Lighting and ceiling fans can significantly impact your electricity bill. Always turn them off when leaving a room, and consider using task lighting, like study lamps, to reduce overall energy consumption.

4. Replace Old Appliances: Older appliances tend to be less energy-efficient, consuming more power. Upgrading to newer models can help reduce your energy costs.

5. Avoid Overcharging Devices: Don’t leave your devices plugged in unnecessarily, as frequent charging can shorten battery life. Also, unplug chargers from the outlet when not in use to save energy.

What is the E-Bill System?

Paper bills can also be found digitally as e-Bills. Information regarding payment terms and due dates is included in the e-Bills. The payment site is connected to a fully electronic invoicing system, which simplifies the payment procedure. 

Key Steps in the E-Billing Process:

• Invoice Creation: Preparing accurate invoices, including the correct products, services, discounts, and total amounts.

• Invoice Submission: Sending the invoice to the customer or relevant authority.

• Payment Collection: Receiving and tracking payments from customers based on the submitted invoices.