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Explain the factors affecting framing of tariffs.

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Factors affecting framing of tariffs:- 1. Total recovery of all taxes , duties and other charges 2. Expenses on premium (installment) paid to insurance company. 3. T&D losses. 4. Electricity cannot be stored economically. It has to be consumed as soon as it is generated. 5. Additional supply charges (ADC) to compensate the costly purchase energy (power) from outside to reduce the load shading. 6. Investment required for future expansion. 7. Economics as compare to other types of energy sources.i.e.to encourage the consumers to use electricity. 8. Applying different tariff for different types of consumers.i.e. Proper return is secured from each consumer. 9. Applying tariff high during peak load period. 10. Applying tariff low during off load period. 11. For industrial consumer, in addition to basic tariff incentives and penalty related to P.F and L.F. 12. The tariff should be simple cheap and capable of easy explanation to consumers. 

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