Understanding ToD Rebates and Surcharges in J&K's New Power Tariff

Er Bashir Ahmad Dar

darbashir@gmail.com

The Joint Electricity Regulatory Commission for the UTs of J&K and Ladakh (JERC,JKL) has issued new Power Tariff for UT of J&K on 20th August, 2026. Vide this tariff order, the commission has approved an average 6.83% increase in retail electricity tariffs for FY 2026-27, effective September 1, 2026. The Commission has also introduced Time of Day Tariff (ToD) for all categories of consumers, except for Agricultural Category,

Time of Day (ToD) tariff is a variable pricing mechanism under which electricity charges vary according to the time of consumption. Under Clause 10.24 of the Tariff Order, the ToD tariff is applicable, in addition to normal energy charges, to all consumers (except Agriculture) having a sanctioned load exceeding 10 kW. The Commission has categorized the day into Solar Hours (0900-1700 Hrs), Peak Hours (0600-0900 Hrs and 1700-2200 Hrs), and Normal Hours (2200-0600 Hrs). During Solar Hours, consumers are eligible for a 20% rebate on energy charges across all consumer categories, encouraging electricity consumption when solar power generation is available and power costs are lower. During Peak Hours, a 20% surcharge on energy charges is applicable to industrial consumers (LTIS, HT Industry and HT PIU) and commercial consumers (LT Non-Domestic and General-Purpose Bulk Supply), while a 10% surcharge applies to all other consumer categories. The remaining hours are treated as Normal Hours and are billed at the standard energy charge without any ToD surcharge or rebate. The primary objective of the ToD tariff is to incentivize consumers to shift electricity consumption from peak-demand periods to solar hours, thereby promoting greater utilization of renewable energy, reducing overall power procurement costs, easing stress on the power system, and improving grid reliability and efficiency.

The financial benefit of shifting electricity consumption to Solar Hours can be clearly understood through the example of water heating. Suppose heating water requires 100 units of electricity and the normal tariff is Rs. 5 per unit. If the electricity is consumed during Solar Hours, from 9 AM to 5 PM, consumers with a sanctioned load above 10 kW can avail a 20% ToD rebate. The cost of 100 units would therefore come down from Rs. 500 to Rs. 400, resulting in a saving of Rs. 100. In contrast, if the same water is heated during Peak Hours, i.e. from 6 AM to 9 AM or 5 PM to 10 PM, an industrial, commercial or general-purpose bulk consumer with a sanctioned load above 10 kW would attract a 20% surcharge, increasing the cost of 100 units to Rs. 600. For the remaining categories with sanctioned load above 10 kW, the applicable surcharge is 10%, making the cost Rs. 550. If the same electricity is consumed during Normal Hours, from 10 PM to 6 AM, there is neither a ToD rebate nor surcharge, and the cost remains Rs. 500. Thus, simply by shifting a 100-unit electricity load from peak hours to solar hours, a consumer can potentially reduce the cost from Rs. 600 to Rs. 400, a saving of Rs. 200, or 33.3%. This example demonstrates the strong economic incentive created by ToD tariff to shift flexible loads, such as water heating, to solar hours, thereby making better use of available solar energy while reducing the consumer's electricity bill. The ToD tariff, however, is not applicable to the Agricultural Category.

Load management plays a crucial role in maximizing the benefits of the Time of Day (ToD) tariff structure. To minimize the impact of ToD surcharges and take advantage of available rebates, electricity consumption should be shifted as much as possible to solar hours, typically between 9:00 AM and 5:00 PM. Facilities like single shift industries, govt offices including educational institutions, whose operations already fall within this period require no changes and can continue operating as usual and can avail 20% rebate. Flexible activities should be rescheduled from non-solar and peak tariff periods to the solar window to optimize energy costs. In addition, non-continuous industrial equipment should be switched off during peak hours, namely from 6:00 AM to 9:00 AM and from 5:00 PM to 10:00 PM, to avoid higher electricity charges. High-energy commercial loads, such as water-heating systems in hotels and similar establishments, should also be operated during solar hours. By adopting these load management strategies, consumers can significantly reduce electricity costs while benefiting from ToD rebates.

Implementation of the ToD tariff shall require Discoms of J&K, namely, JPDCL and KPDCL to obtain at least six meter readings per month from each consumer, comprising four readings corresponding to the ToD time slots, one cumulative energy reading, and one maximum demand reading. A major challenge arises from the fact that most legacy meters are configurable for eight time slots. Presently these time slots do not align with the ToD schedule prescribed by the Commission, making reprogramming a complex exercise. Further, manpower constraints and the limited technical expertise available for meter reading and data management present significant operational challenges. Consequently, implementation of the ToD tariff at installations equipped with legacy meters is likely to be very difficult. In contrast, smart meters facilitate seamless implementation by automatically transmitting half-hourly consumption data to centralized data centres, enabling accurate allocation of energy consumption across the Commission's prescribed ToD time slots.

The ToD tariff has been introduced by the Commission in compliance with the Ministry of Power, Government of India Notification No. G.S.R. 437(E) dated 14 June 2023, issued under the Electricity (Rights of Consumers) Amendment Rules, 2023. The Rules mandated the implementation of Time of Day (ToD) tariff for commercial and industrial consumers having a maximum demand exceeding 10 kW from a date not later than 1 April 2024. For all other consumers, except agricultural consumers, the ToD tariff was required to be implemented not later than 1 April 2025. Further, for consumers equipped with smart meters, the ToD tariff shall become effective immediately upon installation of the smart meter.

The objective of the ToD tariff is to encourage consumers to shift electricity consumption from peak demand periods to solar hours, when solar power generation is available and electricity can be supplied at a lower cost. This promotes more effective utilization of solar energy, particularly in view of the limited battery storage capacity available in the country. Despite an installed solar capacity of about 165 GW, battery storage capacity is only around 5.9 GW, representing approximately 3.5% of the installed solar capacity. By encouraging greater electricity consumption during daytime hours, the ToD tariff facilitates the integration of renewable energy into the grid, reduces dependence on thermal power generation, and contributes to lowering greenhouse gas emissions, mitigating climate change, and improving air quality. Furthermore, shifting demand away from peak periods reduces stress on generation, transmission, and distribution infrastructure, thereby enhancing system reliability and operational efficiency. The resulting optimization of power procurement and network utilization also supports the financial sustainability of electricity utilities, benefiting both consumers and power companies.

(The author is Managing Director, JK Green Technologies)