Solutions
Two-Part Tariff: When the rate of electrical energy is charged based on maximum demand of the consumer and the units consumed, it is called a two-part tariff
In this method, the total charge is divided into two components: fixed charges and running charges
The fixed charges depend upon the maximum demand of the consumer while the running charges depend upon the number of units consumed by the consumer.
Running charges are affected by varying load factor as these depend on the number of units consumed.
The consumer is charged at a certain amount per kW of maximum demand plus a certain amount per kWh of energy consumed.
This type of tariff is mostly applicable to industrial consumers who have appreciable maximum demand
Total charges = Rs (b × kW + c × kWh)
b = charge per kW of maximum demand
c = charge per kWh of energy consumed