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Decoding LT, HT, Domestic, Commercial and Industrial tariff structures by utilities

By on August 27, 2015 with 262 Comments  

We at Bijli Bachao get a lot of emails from our readers asking for help about their electricity bills. While discussing about the electricity bills, we talk about words like LT, HT, Domestic tariff, Commerical tariff or industrial tariff, but we realized that very few people understand them and how rates/tariffs of electricity are structured. With this article we would like to help people understand various types of tariff structures that utilities come up with and also that electricity rates are not the same for every consumer of electricity.

LT (Low Tension) vs HT (High Tension)

Tension is a French word for Voltage. A low-tension line is a low voltage line and a high-tension line is a high voltage line. In India LT supply is of 400 Volts for three-phase connection and 230 Volts for single-phase connection. High tension or HT supply is applicable for bulk power purchasers who need 11 kilo-Volts or above. Most small consumers of electricity like individual houses, shops, small offices and smaller manufacturing units get their electricity on LT connection. HT is applicable for bulk purchasers of electricity like industries (big manufacturing units), big offices, Universities, hostels and even residential colonies (if the apartment complexes purchase together in bulk). The tariff structures of most state distribution companies are different for LT and HT.

In some states a residential complex can benefit with lower rates if electricity is taken at bulk HT tariff. Internally the complex can provide electricity to its residents through the common supply.

Domestic, Commercial and Industrial tariffs

Distribution companies provide electricity at different rates to different categories of consumers. Every state has different categories that cater to the needs of the businesses prevalent in their states. But the most common categories are domestic (residential), commercial (shops and offices) and Industrial (manufacturing units). With rates being lowest for residential consumers and highest for industrial consumers. Within these categories there are separate rates for LT and HT. So if we have to list down, following categories will be available in most states:

  • Domestic-LT: for most individual residential connections.
  • Commercial-LT: for small shops and offices. Also for hotels, guest houses, theaters, etc.
  • Industrial-LT: for very small manufacturing units (like bakery, stone cutting, poha mills, etc).
  • Domestic-HT: Bulk supply for residential colonies.
  • Commercial-HT: for bigger offices, film studios, etc.
  • Industrial-HT: for most heavy industries.

Many a times the categories are also differentiated depending on the connected load and the tariffs increase if the connected load is higher.

Cross subsidies and need for different tariffs

While cost of generation, transmission and distribution are the same, but the tariffs charged for different consumers is different. For example, if the average cost of service is Rs 3/unit, the domestic consumer may be charged at Rs 2.5/unit while an industrial consumer may be charged at Rs 3.5/unit. In this case, it is said that the domestic consumers are cross-subsidized by industrial consumers. These cross subsidies have been put in place in the country to make sure that the common man is not burdened much with the rising electricity costs. Industries and business take the most burdens of higher electricity costs. And thus the tariffs are different for different categories of consumers.

About the Author:
Abhishek Jain is an Alumnus of IIT Bombay with almost 10 years of experience in corporate before starting Bijli Bachao in 2012. His passion for solving problems moved him towards Energy Sector and he is keen to learn about customer behavior towards Energy and find ways to influence the same towards Sustainability. .

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