What is ohp in electricity bill?

English translation: overhead premium (if the context allows) "Provisional sum items if any shall be charged with 15% OHP on the total landed invoiced amount."

English translation: overhead premium (if the context allows) "Provisional sum items if any shall be charged with

By Hanumanth Raju G V, CSTEP.

This is the 3rd article in the Empower blog series that CSTEP initiated to breakdown the power sector for a non-technical audience. In the first article, we began decoding the journey of electricity and in the second article we explained the costs incurred in generating electricity — the first step of the journey. In this, the 3rd article of the series, the author explains different components of your monthly electricity bill to help consumers make informed decisions.

Every month, a piece of paper listing the charges for the electricity used up for lighting our homes, running appliances, and charging our laptops and phones, arrives at our doorstep. It is the consumer electricity bill. Though well received, it is often not well understood.

This article simplifies the electricity bill, while detailing the aspects relevant for the consumers, to enable them to understand their bills better.

DISCOMs and Cost of Power Supply

The distribution company (DISCOM) plays an important role in ensuring a reliable power supply to its end consumers. To supply electricity to its consumers, a DISCOM incurs an average cost of supply (power-purchase cost, operation and maintenance cost, manpower cost, office expenses, etc.). To recover this cost of supply and sustain its operations, DISCOMs need to bill the consumers. It is important that bills reflect the total amount that needs to be recovered from the consumers. Similarly, consumers need to properly understand the components of a bill to be able to spot any errors in the bill, as well as to make payments promptly.

The Bill

Electricity bills are generated for all consumer categories, such as domestic, industrial, commercial, and industrial. Here we present a domestic consumer’s bill for illustration purposes. The DISCOM creates a consumer identity through two unique numbers — ‘Revenue Registration’ (RR) number and ‘Account Identity’ number. The connection and billing details provide the sanctioned load for the consumer, the billing period, and the bill number.

Bill components and calculation of charges

A consumer’s electricity consumption is calculated on a monthly basis. The difference between current month’s reading and previous month’s reading provides the monthly electricity consumption by the consumer. In the example, the difference between the previous and present reading (1571–1511=60) is multiplied with the Meter Constant (MC) — which is ‘1’ in this case — and so the total consumption is 60 units. MC is a fixed value of each individual meter, which is used to convert or multiply meter consumption into actual consumption.

Based on the consumption and the sanctioned load, the following charges are levied:

1. Fixed Charge (FC): FC is based on a consumer’s sanctioned load, which refers to the sum of the load of all electrical appliances within consumer premises. FC is levied to recover the overall cost of the network infrastructure laid by a DISCOM (poles, electric lines, electricity meters, etc.). The fixed charges vary with consumer categories, based on the sanctioned load and paying capacity. Here, the FC is INR 60/KW for the initial ‘1KW’ and INR 70/KW for the remaining KW.

2. Energy Charge (EC): EC is calculated on the amount of energy consumed, and is levied to recover the cost of electricity purchased by the DISCOM. It is calculated slab wise (Table 1), and the charges increase as the number of consumed units increases.

3. Fuel Cost Adjustment Charge (FAC): FAC refers to the increase in cost — brought about by a hike in price of fuel/coal every month — that is passed on by the electricity-generation utilities to DISCOMs (who further pass it on to the consumers). FAC is levied on consumers each month and revised once in a quarter, jointly by State Electricity Regulation Commissions (SERCs) and DISCOMs.

4. Tax/Electricity Duty: The state governments have fixed a 9% tax on EC for each consumer. The application of this charge varies between states, since some states apply ‘tax’ for electricity consumption as a percentage of energy charges, while others apply ‘duty’ as INR/unit.

5. Rebate: To encourage consumers to conserve energy/use energy efficiently, and to promote renewable-energy initiatives and usage, a rebate of 50 paisa/unit of electricity consumed (subject to a maximum of INR 50/-per installation/month) is allowed by DISCOMs if solar water-heaters are used.

6. Penalty: A surcharge of 2 paisa/unit is levied as penalty if the power factor (PF) is found to be less than 0.85 lag. PF is the fraction of total power supplied to the actual power consumed by a consumer. It is monitored on a monthly basis during the billing process.

7. Interest: A simple interest rate of 1% per month is levied for late payments, depending on the number of days by which it is delayed.

8. Incentives: An incentive of 0.25% is given if:

· Bills are paid through the Electronic Clearing System.

· Bills exceeding INR one lakh are paid 10 days before the due date.

· Consumers pay INR 1000 in advance towards the next month’s bill.

9. Other Charges: Some DISCOMs levy ‘Urban Cess’ on behalf of municipal bodies, and collect ‘Water Conservation Cess’ from industries and large consumers.

10. Arrears: Any pending payments relating to the previous month are added in the current month’s bill.

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It is essential for any power utility to provide sufficient energy enough for all the loads connected to the system. To achieve this, the generation and distribution system should be equipped with instruments to determine the maximum demand of consumers at all times. This can be done by the instrument called Maximum Demand Indicator (MDI). This blog describes the applications, pros and cons of different types of MDIs and the significance of calculating maximum demand.

The greatest power demanded by load on the power station during a given time period is called maximum demand.

Where,

The demand charge for a given month is determined by the given formula:

Electricity billing structure by the utilities is usually composed of a two-part tariff structure, one part depends on the actual energy drawn (kWh), while other depends on the power demand (kVA or kW) during the billing cycle. Electric power suppliers charge commercial and industrial consumers such as industry, office buildings, hospitals etc. on the basis of maximum demand and total unit consumption. However, the residential customers are charged just for the “actual” energy (kW) used and not the “total” energy (kVA) supplied. With the increasing trends of energy conservation and cost saving, it is important for any consumer to understand the electricity tariffs.

Generally, utilities impose different demand charges for Peak and Off-Peak hour based on electricity billing structure. Let us explore the calculation of demand charges by an example.

Customer’s maximum demand during peak hours = 400 kW

Maximum demand during off-peak hours = 150 kW

Demand charges would be calculated as:

On-peak Demand: 400kW * 15.78 Cents = 6312 Cents

Off-peak Demand: 150kW * 13.07 Cents = 1960.5 Cents

Total Demand Charges for the month = On-peak Demand + Off-peak Demand= 6312+1960.5

Total Demand Charges for the month = 8272.5 Cents = $ 82.725

Now assume another case in which peak demand is reduced during both on and off-peak hours:

Customer’s maximum demand during peak hours = 150 kW.

Maximum demand during off-peak hours = 300 kW.

Demand charges would be calculated as:

On-peak Demand: 150kW * 15.78 Cents = 2367 Cents

Off-peak Demand: 300kW * Cents. 13.07 = 3921 Cents

Total Demand Charges for the month = On-peak Demand + Off-peak Demand= 2367+3921

Total Demand Charges for the month = 6228 Cents = $ 62.28

In the above example, we can observe a significant reduction in utility bill cost. Hence, we can conclude that when maximum demand is increased, higher will be the charges. There is need to reduce our maximum demand which is indicated by maximum demand indicator. So, maximum demand indicator holds great significance for utilities and consumers.

The importance of maximum demand lies in the fact that it helps in determining the installed capacity of the station and cost of installation. Higher the value of maximum demand on the station, greater will be the size and cost of installation. As the station capacity is optimized to meet the maximum demand. Now, low maximum demand means low capacity of the plant which, therefore, reduces the cost of the plant. Further, the tax charge and clerical staff depends upon the size of the plant and consequently, depend upon maximum demand.

Maximum Demand indicator is a device which records the maximum power used by the consumer at intervals. The indicator should only measure the base and peak load value not the high current values due to sudden short circuit or inrush current.

Following are the Types of Maximum Demand Indicators:

Wright MDI is basically a thermal indicator operated by current. It works on the principle of differential thermometer. It is made up of U-shaped glass tube with two bulbs at upper ends of tube. The left side bulb consists of an air and metallic strip around it which is then connected with the load circuit in series. Beneath the right-side bulb, a scale is fitted along with a narrow bore Index tube. The main U-shaped tube is filled with dilute sulphuric acid, having low co-efficient of thermal expansion at low temperature. The traps in each limb prevents the movement of air from one bulb to the other.

The air inside the bulb expands when the load current flows through the strip. This expansion causes the indicator liquid of right-hand bulb to spill over into the index tube. The expansion of liquid highly depends on the magnitude of load current across the strip of the indicator. Thus, higher the magnitude of load current, the greater will be the expansion of liquid, and as a consequence, higher will be the quantity of liquid overflowing into the index tube. Now, the overflow of liquid will happen only when the load current through the strip exceeds the previous load current value.

For such indicator, time lag must be incorporated to prevent indication of peak demand of short duration. This time delay is increased by placing cast iron cylinder between bub and metallic strip (heater coil).

Merz Price Indicator is integrated with the energy meter which measures total energy consumed at particular time interval. The indicator records the maximum demand through a complex speed dial mechanism. Pointer connected to Merz demand indicator is driven by disc mechanism of energy meter using some gearing mechanism. Then, pin moves the dial forward which indicates the total power consumed at particular interval. For the next time interval, pointer will record the total power consumed by the load. The pin will move forward only when energy used by the load exceeds the previous recorded value. The indicator consists of cam and Bell crack mechanism, used to reset the pointer at initial position.

Merz Price indicator lies under the category of Average Demand Indicator as it shows the maximum value of the load averaged over equal time interval. The mathematical expression to calculate Average Maximum Demand is given as:

Merz Price Indicator is of ultimate importance in Energy measurement field and is used as a unit together with an energy meter.

Once consumer specify the MD (Maximum Demand) needed during the month to utility, electric power supply company setup the generating station based on MD by load side. In an electrical system, an increase in the demand for electricity by more diverse end user leads to shortfall in capacity to meet demand. To keep up with energy demands, the construction of new generation power plants are costly as well as a long wait prospective. So, utility imposes a penalty on consumer if MD value during the month is higher than the contracted demand. This penalty is accounted in their electricity bill and is termed as MD Penalty.

MD penalties are incurred by utility because of exceeding the contracted power can be reduced by practicing the following methods:

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BESCOM power tariff revision in Karnataka: What is the new revised electricity charges in Bangalore and other parts of Karnataka?"Missing: ohp | Must include: ohp