Dynamic power price hike from 2025, with rates being higher at peak time

By April 1, 2025, the nation-wide system of charging varying tariffs for electricity at various times of the day would go into effect. The proposed Time of Day (TOD) tariff system is the subject of a draught amendment bill on which the Centre has requested the States’ input.

Different charges are applied for using electricity at various times of the day according to the TOD system.

When the TOD system is put into place, the peak hours from 6 pm to 10 pm, when consumption is at its highest, would have higher fees, while the daytime fees would be lower.

For domestic consumers, the prices would be at least 10% higher. The tariffs would be at least 20% higher for consumers in the commercial and industrial sectors. All consumers would pay prices that are at least 20% less than what they would normally pay during the day, when solar power generation also occurs.

According to a written directive from the Centre, after the ‘Smart metre’ technology, which assures advance payment for power, is put into place, customers should move to the TOD rate.

The individual State Regulatory Commissions would determine the rate and the peak hours. In other words, nighttime use needs to be decreased to minimise the cost of electricity.

In Kerala, the TOD system is in effect for residential consumers who use more than 500 units of electricity each month and for business consumers that use more than 20 kW. These customers will pay prices for peak-hour consumption that are more than 50% higher than typical.