Objectives of tariff system: 1) Recover judiciously and legally capital investment made on electricity generation, transmission & distribution. 2) Recover judiciously and legally the cost of operation, supplies, maintenance & losses incurred. 3) The costs incurred must be judiciously distributed amongst the consumers. 4) Cost of metering, billing, collection & miscellaneous services must be recovered. 5) Encourage the consumers for using power during the off peak hours so that load factor is maintained high. 6) Discourage users from drawing higher loads than contracted. 7) Should have a provision of penalty for low power factor and incentive for high power factor. 8) Gain a suitable profit on the capital investment.