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State the different types of tariffs. Explain any one.

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Different types of tariffs: i) Simple tariff ii) Flat rate tariff iii) Block rate tariff iv) Two part tariff v) Maximum demand tariff vi) Power factor tariff vii) Three part tariff viii) Time-of-Day (TOD) tariff 

i) Simple Tariff: In this type of tariff, rate per unit is fixed. The rates will not vary with type of consumers, so it is very simple tariff to understand for consumers.

ii) Flat rate Tariff: In this type of tariff different types of consumers are charged at different rates i.e. the flat rate for light and fan load is less than that for power load.

iii) Block rate Tariff: This type of tariff uses a method of charging a consumer in blocks. Generally, block of first few units is charged at high rate, then next block of some units is charged at low rate and a third block of remaining units consumed by him is charged at still reduced rate. However in Maharashtra, the electricity board uses this type of tariff in the reverse manner so as to reduce the consumption of electricity for light and fan loads. It charges less for the first block and the rate increases for the succeeding blocks.

iv)Two Part Tariff: In this consumer has to pay his electricity bill, which consists of two parts. One part depending upon the maximum demand of the consumer and the other part consists of energy charges on the actual energy consumed.

v) Maximum demand tariff: It consists of two parts i.e. Demand charge and Energy charge. This system need a M.D. indicator to be installed at the premises of the consumer, hence such type of tariff is suitable to large and medium scale industries. It is also beneficial for electrical installations having high load factor. Exceeding the maximum demand over a sanctioned limit may cause penalty to consumer. 

vi)Power factor tariff: In this tariff, Power factor of the consumer load is taken into consideration while charging the consumer for his electricity use. Low power factor consumer are penalized and high pf consumers are given incentives. Hence it is necessary that consumer be made to use electricity at high power factor otherwise he is charged more. There are three types of power factor tariff: kVA maximum demand tariff, Sliding scale tariff, kWh and kVAR tariff.

vii) Three part tariff: In this, total charges are divided into three parts namely, Fixed charge, Semi-fixed charge and variable charge.

viii) Time-of-Day (TOD) Tariff: Here the electricity charges are according to the time of day of energy usage. In peak hours, the rates are high and in non-peak hours, the rates are low. So that the consumers are encouraged to use the electricity during non-peak hours.

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