The tariff, on the other hand, should cover the overall cost of generating and distributing electricity and the profit for the power provider. Tariffs cannot be the same for all users since the cost of producing electrical energy varies depending on the electricity used and the user’s load circumstances. Many sorts of consumers, such as home, industrial, and commercial customers, are taken into account while determining the tariff. We should know more about electricity tariff singapore.
Tariffs Have a Purpose
Electrical energy is sold at a price that covers both production and transmission costs and a reasonable profit margin, just like any other product. Since these elements are essential, a tariff should contain them.
- It should be able to recoup the power plant’s electricity generation cost.
- Electricity transmission and distribution investments should be recouped.
- Meters, equipment, invoices, and other power system parts should be recouped.
- A return on the investment should also be expected.
Desirable tariff Characteristics
The tariff should be set such that the total amount received from customers equals the cost of generating and providing electrical energy, plus a reasonable profit margin. Proper Return When it comes to charging customers, the tariff should be set in such a way as to guarantee that each power supply business can provide uninterrupted and dependable service to customers. An average customer should be able to read and understand the tariff, which should be basic enough to be comprehensible.
Tariffs for Electricity
Uniform Rate Tariff – When the rate per unit of electrical energy used is the same, it is known as the simple tariff or the uniform rate tariff. Tariff Flat Rate Tariff – When customers pay a set price per unit of electricity used, it is known as a flat tariff rate. An electricity tariff, known as the “block rate tariff,” in which the first block of electricity is taxed at a fixed rate, and subsequent blocks are paid at gradually lower rates.