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Chapter 5 Tariff (Compatibility Mode)

This document summarizes a chapter about tariffs from an electrical engineering textbook. It defines a tariff as the rate at which electrical energy is supplied to consumers. Tariffs should cover the total cost of production plus a reasonable profit. There are different types of tariffs including simple tariffs with a fixed rate per unit, flat rate tariffs that group consumers into classes, and block rate tariffs that reduce the price per unit for higher consumption blocks. Two-part tariffs split the charge into a fixed component based on maximum demand and a running charge based on units consumed. Power factor tariffs penalize consumers for low power factors. The document provides examples to illustrate how to calculate charges under different tariff structures.

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105 views28 pages

Chapter 5 Tariff (Compatibility Mode)

This document summarizes a chapter about tariffs from an electrical engineering textbook. It defines a tariff as the rate at which electrical energy is supplied to consumers. Tariffs should cover the total cost of production plus a reasonable profit. There are different types of tariffs including simple tariffs with a fixed rate per unit, flat rate tariffs that group consumers into classes, and block rate tariffs that reduce the price per unit for higher consumption blocks. Two-part tariffs split the charge into a fixed component based on maximum demand and a running charge based on units consumed. Power factor tariffs penalize consumers for low power factors. The document provides examples to illustrate how to calculate charges under different tariff structures.

Uploaded by

katlego
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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ELECTRICAL DISTRIBUTION III

(ELD331T)
Chapter 5: Tariff

by

Chaise Khumalo

Department of Electrical Engineering


Overview:

• Tariff

• Desirable Characteristics of a Tariff

• Types of Tariff

Economics of Power Generation


Introduction:

• Electric power is used when supplied at


reasonable rate.

• Ensure that the tariff recovers the total cost of


producing electrical energy.

• Also earns profit on the capital investment.

• Various types of tariffs (advantages &


disadvantages)

Introduction
Tariff:

• The rate at which electrical energy is supplied to a


consumer.

• Tariff should include;

Total cost of producing & supplying electrical energy plus


profit.

• Not the same for all types of consumers.


Tariff (Cont.):

• Special consideration has to be given to different types of


consumers while fixing the tariff.

• The problem of suitable rate making is highly


complicated.

• Objectives of tariff;

returns the cost & also earns reasonable profit


Tariff (Cont.):

• A tariff should include the following items:

a) Recovery of cost of producing electrical energy at the P.S

b) Recovery of cost on the capital investment in


transmission & distribution systems

c) Recovery of cost of operation & maintenance of supply of


electrical energy

d) A suitable profit on the capital investment


Desirable Characteristics
of a Tariff:
• A tariff must have the following desirable
characteristics;
a) Proper return

b) Fairness

c) Simplicity

d) Reasonable profit

e) Attractive
Types of Tariff:
• The following are the commonly used types of tariff;

a) Simple tariff = when there is a fixed rate per unit of


energy consumed (uniform rate tariff).

• Price charged per unit is constant

• It does not vary with the increase or decrease in number


of units consumed.

• Energy meter records the consumption at the consumer’s


terminals
Simple Tariff (Cont.):

• Disadvantages:

a) No discrimination between different types of consumers


– everyone pays equally.

b) The cost per unit delivered is high

a) It does not encourage the use of electricity


Types of tariff (Cont.):

b) Flat rate tariff = when different types of consumers are


charged at different uniform per unit rates.

• Consumers are grouped into different classes.

• Each class of consumers in charged at a different uniform


rate.

• Diversity & load factors are taken into account when


different classes are made.
Flat Rate (Cont.):
• It is fair to different types of consumers & is quite simple
in calculation.

• Disadvantages:

a) Separate meters are required – application is expensive


& complicated.

b) A particular class of consumers is charged at the same


rate irrespective of the magnitude of energy consumed.
Types of Tariff (Cont.):

c) Block rate tariff = when the given block of energy is


charged at a specified rate & the succeeding blocks of
energy are charged at progressively reduced rates.

• Energy consumption is divided into blocks.

• The price per unit is fixed in each block.

• The price per unit in the first block is the highest.


Block Rate Tariff (Cont.):

• The per unit price is progressively reduced for the


succeeding block of energy.

• The consumer gets an incentive to consume more


electrical energy.

• It lacks a measure of the consumer’s demand

• Is used for majority of residential & small commercial


consumers.
Types of Tariff (Cont.):

d) Two-part tariff = when the rate of electrical energy is


charged on the basis of maximum demand of the
consumer & the units consumed.

• The total charge is spit into two components;

Fixed charges.

Running charges
Two-part Tariff (Cont.):

• Fixed charges depend upon the maximum demand

• Running charges depend upon the number of units


consumed.

• A consumer is charged at a certain amount per kW of


max. demand plus certain amount per kWh of energy
consumed.
Two-part Tariff (Cont.):

• It is applicable to industrial consumers with appreciable


max. demand.

• Advantages:

a) It is easy understood by the consumers

a) It recovers the fixed charges which depend upon max.


demand
Two-part Tariff (Cont.):

• Disadvantages:

a) The consumer has to pay the fixed charges irrespective


of whether he/she has consumed electrical energy.

b) The is always an error in assessing the max. demand of


the consumer.
Types of Tariff (Cont.):

e) Maximum demand tariff

• Similar to two-part tariff

• The only difference is that max. demand is measured by


installing max. demand meter in the premises of the
consumer.

• Mostly applied to big consumers.


Types of Tariff (Cont.):

f) Power factor tariff = the tariff in which power factor of


the consumer’s load in taken into consideration.

• Low p.f increases the rating of station equipment & line


losses.

• A consumer having low p.f is penalized.


Power Factor Tariff
• Types of power factor tariff:

a) kVA max. demand tariff

• Fixed charges are made on the basis of max. demand in


kVA & not in kW.

• Consumers with low p.f contributes more towards fixed


charges. kVA is inversely proportional to the p.f

• It encourages consumers to operate their appliances and


machinery at improved p.f.
Power Factor Tariff
(Cont.):

b) Sliding scale tariff (average power factor tariff)

• Average p.f is taken as reference

• Additional charges are made if the consumers p.f is below


the reference.

• If the p.f is above the reference, a discount is allowed to


the consumer.
Power Factor Tariff
(Cont.):

c) kW & kVAr tariff

• Both active power (kW) & reactive power (kVAr) supplied


are charged separately.

• A consumer with low p.f draws more reactive power & pay
more charges.
Types of Tariff (Cont.):

g) Three-part tariff = when the total charge to be made


from the consumer is split into three parts. viz,

Fixed charge

Semi-fixed charge

Running charge.
Example:
The monthly readings of a consumer’s meter are as follows:

Maximum demand = 50 kW
Energy consumed = 36.000 kWh
Reactive energy = 23.400kVAr

If the tariff is R80 per kW of maximum demand plus 8 cents


per unit plus 0.5 cents per unit for each 1% of power factor
below 86%, calculate the monthly bill of the consumer.
Solution:

Average load = 36000 = 50 kW


24x30

Average reactive power = 23400 = 32.5 kVAr


24x30

Suppose ɸ is the power factor angle:

tan ɸ = kVAr / Active power = 32.5 / 50 = 0.65


Solution (Cont.):

ɸ = arc tan 0.65 = 33.02°

Power factor = cos ɸ = cos 33.02 = 0.8384

Power factor per charge = R 36000 x 0.5 (86 – 83.84)


100
= R388.8

Monthly bill = R(80 x 50 + 0.08 x 36000 + 388.8)


= R7268.8
THANK YOU!!!

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