Know Your Electricity Bill

Know Your Electricity Bill and Its Components


Know Your Electricity Bill – Here we will discussed about the Unit of Connected Load is and the components of electricity bill which will help in understanding ways to reduce electricity bill. It is very important to understand the electricity bill and its components to make plans for energy savings. Our electricity bills have a more information to give us a good insight into electricity consumption patterns. A good understanding of various components can help to make plan for money saving exercise.

Various Sections on Electricity Bills that are Important

  1. Tariff / Category
  2. Connected Load
  3. Units Consumed
  4. Tariff Structure
  5. Tariff Structure
  6. FAC – Fuel Adjustment Charge
  7. Electricity Duty/Taxes

Tariff and Category

Tariff/Category determine the rate structure applicable to the bill. Tariff codes start with LT (Low Tension 230V single phase or 400 V three phases) or HT (High Tension 11kV and above). LT codes are used for connection to residential, commercial and small offices. HT codes are used for bigger industries. Different rates/slabs are applicable for different tariff codes. It is important to validate that the right tariff code is applied on the electricity bill. Best AC Brand In India

Connected Load

Connected or Sanctioned Load is the total pool of supply that is given to a meter. The Unit of Connected Load is kW (or Killo-Watts). This is the permissible total peak Killo watts given to a meter based on the appliances connected to the meter. Connected load determines if the connection will be a single-phase or three phase. Every DISCOM is having a method of calculating the load to be sanctioned to the applicant and should check the website of the company such as:

  • constructed area
  • assessment based on the load of the connected appliances
  • based on the unit consumed in kWh

Units Consumed

Units consumed is the number of kWh (Kilo-Watt-Hour) in a month. 1 kWh is equivalent to keeping a 100 Watts bulb for 10 hrs. This information is calculated by finding the difference between meter readings of two consecutive months. This is the total monthly consumption by all the appliances that are connected to the meter. This is the value that needs to come down in order to reduce the electricity bill.

Tariff Structure

The important things to note that tariff structure on your bill, as it is the best indicator of how the bill can be reduced. For residential and commercial connections, electricity bill structure is slab based. The slabs are based on the Units Consumed, as the number of units consumed increase, energy charge changes also the fixed costs associated (single-phase) with the slab increases.

Fuel Adjustment Charge (FAC)

There is a Fuel Adjustment Charge rate applicable at each slab. This is the additional cost of power incurred due to fuel price increments during a year. Fuel in most cases is Coal. FAC will increase alternate sources of electricity are not developed to a state where they can generate electricity that cheap.

Electricity Duty or Taxes – applicable taxes of each State

Every state is having own an Electricity Duty or taxes Act where in the applicable taxes for different tariff structure is defined and one can check the same in his electricity bill. It may be noted that this tax is not under the purview of GST as one date.

Understanding the elements or components of electricity bill mentioned above can help you to understand your electricity bill. It will also help you to plan your electricity consumption reduction. Things that should be targeted are Units Consumed and Connected Load.