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How to reduce Commercial Electricity Bill?

How to reduce Commercial Electricity Bill?

Every other business owning individual are facing problem due to heavy bill being charged for the commercial unit. With the costliness trending in today’s time, commercial electricity is in no manner behind the race. In order to find a solution to the costliness, here is the article containing the details discussing and finding suitable measures to control the same.

For controlling the increment of electricity bill, The Central Electricity Regulatory Commission (CERC) is the authority acting as the regulator of power supply in India. And under it specifically for the state of Delhi, The Delhi Electricity Regulatory Commission (DERC) is there to play the role of regulating power supply.

The main function of DERC is to regulate the tariff of central as well as the interstate generating stations and also the transmission and power of supply.

Read below to know about the tariff order passed by the DERC.

As per Hon’ble Delhi Electricity Regulatory Commission vide Note No. 5 of Tariff Schedule for 18-19, it has been mandated that the Industrial Power tariff shall be applicable to only those consumer who hold Factory License at any point of time must be submitted to the Discom (Tata Power-DDL) whenever it gets renewed. And failure to do so in submission, Discom (Tata Power-DDL) shall then apply tariff of non-domestic category suo-moto till the duration of factory license submission.

For application of tariff under Industrial category, the appropriate factory license will be needed. The case where the factory license got expired and the renewal application is pending with the concerned authority, the DISCOMs shall charge the bills of such consumers are per the Tariff applicable under Non Domestic category.    

And after the renewal process of the factory license gets completed, the authority namely DISCOM shall adjust the bill of such consumers as per the applicable Tariff under the specified Industrial category from the effective date if renewal of such license.

The factory license for the purpose of applicability of Industrial tariff shall mean the license or permission/authorization granted by Directorate of industries of Ministry of Micro, Small and Medium Enterprises or MCD for running an industry or factory in respective field of operation.

The order passed by the authority is a merit for all those who opt for it in the time frame specified. It is an optional procedure however a profitable one. So no doubt, following the Tariff Schedule will surely help to minimize the commercial electricity bill.

Here is why it is profitable to opt for Tariff Schedule:

Under Electricity Tariff Schedule for FY 18-19 the clauses mentioned are as follows:

  1. Keeping domestic category a side, it is the clause applicable on all other categories which states fixed charges shall be applicable based on billing demand per kW/kVA or part thereof. But, in case the maxim demand exceeds the sanctioned demand then, a surcharge of 30% shall be levied on the fixed charges corresponding to excess load in kW/kVA for such billing period only.

And where the sanctioned loan/contract demand is in kW/HP, the kVA shall be calculated on the basis of actual power factor of the consumer, for the relevant billing cycle and in case of non-availability of actual power factor, the power factor shall be considered as unity for sanctioned load/contract demand upto 10kW/11kVA.

  1. Time of Day (TOD) Tariff
    (a) It remains applicable on all categories other than the Domestic one, on consumers whose sanctioned load/MDI (whichever is high) is 10kW/11kVA and above.
    (b) Optional for all three phase connection including Domestic connections. If the consumer who opted for TOD, charge for up-gradation of meters, if any, shall be borne by respective consumers.
    (c) It has been decided by the Commission of the electricity department to retain the Rebate during the off peak hours and peak hours at 20%.
    Once in a financial year, optional TOD Consumers will have the option to move back to non TOD regime.
    (d) For other than the peak and Off-Peak hours, as usual normal charges shall be applicable.
    (e) The time slots have been revised by the Electricity Commission which has been implemented after reviewing the latest demand and supply of Delhi. Here are the revised time slots:
May-September1400 Hrs -1700 Hrs


2200 Hrs – 0100 Hrs



May-September0400 Hrs – 1000 Hrs20%


3. Rebate of 3%, 4% & 5% on the Energy Charges for supply at 11kV, 33/66 kV and 220 kV shall be applicable.

4. As per the Commission’s Order dated 22nd September 2009 in addition to the specified tariff, maintenance charges on street lights wherever maintained by DISCOMs, shall be payable @84/light point/month and material cost at the rate of Rs. 19/light point/month.

5. The above tariff rate shall be subject to following additional surcharges to be applied only on the basic fixed charges and energy charges excluding all other charges e.g. LPSC, Arrears, Electricity tax/Duty, PPAC, load violation surcharge etc:

  • 8% towards recovery of past accumulated deficit to the consumers, and
  • 80% towards recovery of Pension Trust Charges of erstwhile DVB Employees/Pensioners as recommended by GoNCTD.

6. The Distribution License shall levy PPAC after considering relevant TOD Rebate/Surcharge on energy charges applicable to the consumers.

7. For prepaid consumers, the additional rebate of 1% shall be applicable on the basic of Energy Charges, Fixed Charges and all other charges on the tariff applicable.

8. The Single Point Delivery Supplier (Group Housing Scheme) shall charge the Domestic tariff as per slab rate of 1.1 to its Individual members availing supply for Domestic purpose and Non Domestic Tariff for other than domestic purpose. In case of any deficit/surplus arises due to sum total of billing to the individual Members as per slab rate of tariff schedule 1.1 and the billing as per the tariff schedule 1.2 including the operational expenses of the Single Point Delivery Supplier shall be passed on to the members of the Group Housing Societies on pro rata basis of consumption.

9. As per the order of GoNCTD, individual domestic consumers availing the supply at given point delivery through Group Housing Society, shall claim the benefit of subsidy, if any exists. Group Housing Society shall submit the details of eligible consumers with consumption details and lodge claim of subsidy on behalf of individual members from DISCOMs.

10. The Single Point Delivery Supplier availing supply at HT & above shall charge the tariff to its LT consumers and in addition shall be entitled to charge an extra upto 5% of the bill amount to cover losses and all its expenses.

11. The Commercial Consumers of DMRC and DIAL who have sanctioned load above 215 kVA but served at LT (415 Volts) shall be charged the tariff applicable to Non-domestic LT (NDLT) category greater than 140 kW/150kVA (415 Volts)

12. The above mentioned rates are stipulated and are exclusive of electricity duty and other taxes and charges, as are levied from time to time by the Government.

13. Where the electricity bill is rendered by the Distribution Licensee is not paid in the due date required, in that case a Late Payment Surcharge (LPSC) at 1.5% per month shall be levied. The LPSC shall be charged according to the days of delay made in receiving payment from the consumer or the factory owner, until the payment is made in full without prejudice to the right of the licensee to disconnect the supply after due date, in the event of non-payment in accordance with Section 56 of Electricity Act, 2003.

14. No payment shall be accepted by the Distribution Licensees from its consumers at its own collection centres/mobile vans in cash towards electricity bill exceeding Rs. 4,000/- except from blind consumers, for court settlement cases & payment deposited by the consumers at designated scheduled commercial bank branches upto Rs.50,000/- . In case of non-compliance, it shall attract penalty to the level of 10% of total cash collection exceeding the limit.


All of these tariffs that are imposed on consumption of reactive power is the actual Power Factor. And the reason of high cost of electricity bill is due to the high reactive power consumption. Therefore if reactive power consumption is low then the power factor will be high and hence helping in lowering the cost. Objective for which Electricity tariff is introduced is basically to provide equitably the cost of supplying energy among the various classification of use.

Hope you have gained the essential information.

Contact EAdvisors team of experts for getting more information and registration.

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