How to the electricity bill in a India.

I had been getting many calls and requests in my inbox to explain about how the Power Utilities bill them. They are all common people and don’t understand the various components in electricity bill. So, just thought of writing it with an example of my own electricity bill. The components of electricity bill are mostly the same all across India for residential consumers, except the rate may vary from place to place. In Maharashtra, the cost of using electricity is the highest within India.

If you look at the electricity bill shown above, you may note that the current reading date is shown as 21st February 2020 and previous reading date as 21st January 2020. But the confusion starts from here itself. You need to see for the bill period mentioned on it, irrespective of dates shown on bill. The bill period in my case is 1.03 Month(s), means I have been billed for 31 days. Sometimes, the MSEDCL reader is so lethargic that he/she reads a meter for 29 days or in some cases for 33 days, as per his/her own convenience. The approved tariff by M E R C is for monthly rates considering the slab of KWh units consumption. I have highlighted the section of Current Reading and Previous reading and the units billed to me, which is 25222-25001 = 221 KWh units.

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Below is the approved slab per unit rate by MERC for MSEDCL.

The above slab is approved for 30 days (assuming that it’s a monthly billing) but since the actual bill period is 1.03 months, i.e. 31 days, the rates will remain the same but the slab will get prorated as below. E.g. for 30 days first slab is for 100 units, then how many units would it be for 31 days, comes to 103 units. Likewise the 199 units slab gets changed to 206 units and so on…..

Now, you got to know about how the per unit energy charges slab has been prorated. Let’s see one by one billing line items as displayed in bill.

Fixed Charges: Monthly, the consumer has to pay a specific fixed amount to the electricity company. This amount needs to be paid even in the absence of power usage. These charges are meant to recover the fixed or capital costs that the electricity company incurs for creating basic infrastructure facilities for supplying electricity to the consumers. These charges are incurred mainly towards installing and maintaining equipment like the electric cable network, transformers, substations etc., and are determined based on the total connected load of the consumer and the type of connection (single phase or three phase). The rates for these charges are different for different consumer categories and are given in a table behind the bill. In my case, I have single phase connection from MSEDCL, so I am being levied Rs. 90 per month. In case of 3-phase connection, the consumer is charged for Rs. 300 per month. In some states, instead of fixed charges, they call it as meter rent, if it is owned by Power Company. I had filed a petition to remove these charges as for old existing consumers, this cost is already recovered far more than year on year basis just like toll tax on express highways in Maharashtra but still they keep recovering it from consumer which is ideally unethical. It was suspended by MERC for the very obvious reason which I mentioned in many of my past articles.

Energy Charges: The energy charge specifies the cost of power consumed by the consumer, and is determined based on the number of units consumed. The rate for initial units is lower, and gradually increases for subsequent units. For this purpose, the units consumed by a consumer in the domestic category are split into different slabs. The energy charge (tariff) for each of the slabs of consumption is altered, with higher consumption slabs being charged a gradually increasing tariff. This is called telescopic tariff. The aim behind this approach is to incentivise lower consumption and penalise higher consumption. As an illustration, the slab wise tariff per unit per month for domestic consumers as per the orders issued by the Commission on 12 September 2018 which I have already shown above. In case, because of the prorated consumption slab for 31 days, it has been calculated as below.

Energy Charges = {(103 KWh units x Rs. 3.05) + [(221-103 KWh units) x Rs. 6.95]} = Rs. 1134. 25

Now, you got how the Fixed & Energy Charges are calculated, let’s move to Wheeling Charges.

Wheeling Charges: Wheeling charges are the fees charged for the transmission and distribution of electricity through the network of wires. Currently, in Maharashtra, this fee is set at Rs. 1.28 per unit. This one is again of the gray shade of disputed charge that is recovered from residential consumers of Maharashtra, being no fault of theirs. These charges, in my opinion are illegal, still MSEDCL keeps on recovering them from residential consumers too. I have already wrote about it on 9th August 2017. You may read though the Link herein.

In my case, it is calculated as, Wheeling Charges = 221 KWh units consumption x Rs. 1.28 = Rs. 282.88

Fuel Adjustment Charge (F.A.C.): In order to supply power to consumers, the electricity company needs to purchase power from the power generating companies. This rate of power purchase can vary due to certain unavoidable conditions (for example, increased prices of oil or natural gas in the global markets, variation in estimated demand for power, or shortage in power supply). In such consequences, the electricity company has to purchase power at a higher or lower price in order to meet the demand. This difference in price maybe positive or negative, and is recovered from the consumers through the fuel surcharge. For this purpose, MERC assesses all the documents related to power purchase, from time to time, and independently determines the surcharge rate. Ideally, MSEDCL is supposed give authentic proof about what actually they incurred for power purchase. But often, these figures are fabricated by the power companies. I have already written about this on 11th February 2020, you may read through this Link.

For January and February, MSEDCL levied the same FAC as mentioned in below table, slab wise.

To remind you, this one also be levied to prorated units consumption slab for F.A.C. rates.

In my case, the F.A.C. = {(103 KWh units x Rs. 0.55) + [(221-103 KWh units) x Rs. 0.94]} = Rs. 167.57

Electricity Duty: The government of Maharashtra (GoM) levies taxes on the power utilised by the consumer. The directive of the GoM regarding this tax is mentioned behind the bill. Currently, the tax levied on the consumer is in accordance with the GoM notification ELD 2016/CR 252/Energy 1, issued on 21 October 2016. This amount is calculated as a specific percentage of the bill (which includes the fixed charge, the energy charge, wheeling charge and the fuel surcharge). For residential consumers, it is charged as 16% which is too high!

In my case, the Electricity Duty = (Rs. 90 + Rs. 1134.25 + Rs. 282.88 + Rs. 167.57) x 16/100 = Rs. 267.95

Tax on Sale: This is not applicable for residential consumers in Maharashtra.

Previous Bill Credit: If you have paid any additional amount during the payment of last bill, or if any amount is to be refunded on account of wrong bills or overcharges with the notification from MERC, will be returned to consumer. This is 0 in my case.

Current interest: The outstanding amount mentioned in the bill is another important item that is often a cause of worry for the consumer. If the consumer has failed to pay the bill or has not paid it before the due date, then the company recovers it from the consumer as an outstanding amount. Besides this, the company can also include any other such amounts that the consumer is liable to pay but has not paid, under this category. The consumer also has to pay an interest on such outstanding amounts. Thus, to avoid these outstanding amounts, it is essential for the consumer to pay the total bill amount regularly. If the consumer cannot pay the outstanding amount through a single payment, they can request the company to accept payment in multiple installments. An important thing to remember in the context of outstanding amounts is that the company cannot recover any outstanding amount from the consumer after two years of the date of commencement of the period of delay, without repeatedly mentioning it in all the bills. In other words, the company cannot recover any outstanding amount from the consumer that is more than two years old, without continuously mentioning it in all subsequent bills (Section 56(2), Electricity Act 2003).

In my case, this is 0 as I have paid all bills so far within due date.

Other Charges: Apart from the charges mentioned above, any other charges as approved by MERC are recovered from the consumers through ‘other charges’. However, it is binding on the electricity company to mention the details of all such charges in the consumer’s bill. If the consumer needs any clarification about any of the charges mentioned in the bill, they can request the same from the electricity company. It is binding on the company to provide such clarification to the consumer.

In my case, it is 0.

The sum of all the above-mentioned charges is listed as the total amount mentioned in the bill which, in my case, is Rs. 1942.65

Net arrears: If the consumer chooses to pay in advance, the amount is listed as a negative value.

Instead, if the consumer has lapsed payments from previous months, it gets listed as an arrears. The arrears or advance is subject to adjustments and interests; after which the total arrears or advance is calculated. The sum of the total amount and the arrears/advance calculated is the total amount payable by the consumer for a given month.

E.g. if in previous month, my actual bill amount was Rs. 1710.23 but due to prompt payment incentive (PPI) (if you pay within certain days post bill date), I paid Rs. 1700 including rounding off for previous month. So net arrears as are shown as Rs. 10.68 but adjustment of Rs. -18.43 due to PPI calculates the total arrears as Rs. -7.75


Adding up Total Current Bill and arrears/adjustment, my rounded off net payment before due date is Rs. 1930.

Hope, even if you are from a non-engineering background, you would be able to calculate your own electricity bill. In countries like US,UK there is a mandate for retailers/electricity service providers who bills consumers, should put the details about bill is being calculated on their website, but there is no such mandate by M E R C and neither M S E D C L puts it the way I have explained above.

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