Tariffs, Price Drivers and 2026 Rules
Fixed charges, sanctioned load and electricity duty on Indian bills
Why you pay a fixed charge per kW, how sanctioned load is decided and changed, what electricity duty and other surcharges are, with worked examples.
The fixed charge on your electricity bill is a monthly amount you pay for being connected, usually calculated per kW of sanctioned load (sometimes per connection), whether you use one unit or a thousand. Sanctioned load is the maximum load your DISCOM has agreed to supply under your connection agreement. Electricity duty (called electricity tax in some places) is a separate levy by the state government or local body, charged as a percentage of the bill or as paise per unit. Getting the sanctioned load right is the one lever on fixed charges you control; duty is set by law and you can only check that it is applied correctly.
Part of how electricity tariffs are set in India.
Why tariffs have a fixed part
A DISCOM's costs are partly fixed: wires, transformers, staff, metering and the capacity charges it pays generators whether or not power is drawn. SERCs recover some of this through a fixed or demand charge so that revenue does not collapse when consumption falls. Domestic fixed charges are usually kept low to protect small consumers, and some states have none for domestic consumers. Tamil Nadu's domestic LT-IA tariff in TNERC Suo-motu Order No. 6 of 2025 (dated 30 June 2025) shows the fixed charge as Nil.
A real fixed-charge schedule: Delhi
The DERC domestic schedule (FY 2020-21 tariff schedule, continued in the FY 2021-22 order) charges by bands of sanctioned load:
| Sanctioned load | Fixed charge (₹ per kW per month) |
|---|---|
| Up to 2 kW | 20 |
| Above 2 kW up to 5 kW | 50 |
| Above 5 kW up to 15 kW | 100 |
| Above 15 kW up to 25 kW | 200 |
| Above 25 kW | 250 |
Worked examples on that schedule:
| Sanctioned load | Calculation | Monthly fixed charge |
|---|---|---|
| 2 kW | 2 × ₹20 | ₹40 |
| 3 kW | 3 × ₹50 | ₹150 |
| 5 kW | 5 × ₹50 | ₹250 |
| 6 kW | 6 × ₹100 | ₹600 |
Moving from 5 kW to 6 kW more than doubles the fixed charge because the whole load moves into the higher band. Before asking for a load increase, check whether you really need it.
How sanctioned load is decided
When you apply for a connection you declare the connected load: the total wattage of lights, fans, appliances, pumps and air conditioners. The DISCOM sanctions a load, often rounded up to whole kW, on the basis of your declaration and its supply code. Later, the load can be revised:
- On your request — you apply for load enhancement or reduction through the DISCOM portal or office. Reductions are often approved after a site check; enhancements may need a new meter or service cable and a development charge.
- By the DISCOM — if your recorded maximum demand exceeds the sanctioned load. The Electricity (Rights of Consumers) Amendment Rules, 2023 changed how this works for smart-metered consumers: as we understand the amendment, an upward revision should happen only when maximum demand has exceeded the sanctioned load at least three times in a financial year, and higher demand recorded by a smart meter is not to be used to levy penalties for the period before the smart meter was installed. Check the amended rules and your state's supply code for the exact wording.
| Too high a sanctioned load | Too low a sanctioned load |
|---|---|
| You pay more fixed charge every month for capacity you never use | Your demand exceeds it, risking excess-demand charges and a forced load revision |
| Common after builders sanction a high load for a new flat | Common after adding ACs, an induction hob or an EV charger |
Rule of thumb (illustrative): add the wattage of the appliances you actually run at the same time on a peak evening, not everything you own. Two 1.5-ton ACs (about 1.5–2 kW each in use), a fridge, lights and fans might peak around 4–5 kW; an induction cooktop and geyser running at the same time push it higher.
Electricity duty and tax
Electricity duty is levied under state laws such as the electricity duty acts of individual states, and in some cities by the local body as an electricity tax. It is not set by the SERC. Common forms:
| Form | How it appears |
|---|---|
| Percentage of energy charge | e.g. "ED @ x% on EC" |
| Percentage of energy plus fixed charges | Duty line calculated on a larger base |
| Paise per unit | Flat amount per kWh |
| Exemption | Some states exempt small domestic consumers or subsidised units |
Because rates differ widely and are revised by state notification, check the duty rate printed on your bill against the state energy department or DISCOM's tariff page. If the bill shows duty on an amount that should be exempt, raise it with the DISCOM.
Other surcharges you may see
- FPPAS, FPPCA or PPAC — a monthly pass-through of power purchase cost changes. See FPPAS explained.
- Regulatory surcharge — approved by the SERC to recover past under-recoveries ("regulatory assets").
- Pension trust surcharge — in Delhi, a surcharge approved by DERC to fund pensions of former Delhi Vidyut Board employees.
- Meter rent — where the DISCOM owns the meter and the tariff order allows a rent.
- Late payment surcharge — interest or a percentage for paying after the due date.
Worked example: fixed part of a bill (illustrative)
A household in a state with ₹110 per kW per month fixed charge (illustrative), 4 kW sanctioned load, duty of 5% on energy and fixed charges (illustrative), and ₹1,800 energy charge:
| Item | Calculation | Amount |
|---|---|---|
| Energy charge | from slabs | ₹1,800 |
| Fixed charge | 4 × ₹110 | ₹440 |
| Duty | 5% × (1,800 + 440) | ₹112 |
| Total before FPPAS | ₹2,352 |
If this household reduced its sanctioned load to 3 kW, it would save ₹110 a month in fixed charges, ₹1,320 a year, plus duty on that amount. How to read your electricity bill maps these lines to a real bill layout; the electricity bill calculator works out the energy charge for Tamil Nadu, where LT-IA has no fixed charge.
See also: how fixed charges differ between four states and smart meters and recorded maximum demand.
Frequently asked questions
Can I reduce my sanctioned load?
Usually yes, by applying to the DISCOM. Some DISCOMs require a minimum period since the last change or check your recorded maximum demand first. Keep the acknowledgement and check the next bill reflects the new load.
Why is there a fixed charge on a locked house?
The fixed charge is for keeping the connection available. You pay it even if consumption is zero. For a long vacancy, ask your DISCOM about temporary disconnection rules and their reconnection fees before deciding.
Is electricity duty the same as GST?
No. Electricity supply is exempt from GST. Duty is a state levy under state law, collected through the DISCOM bill.
Who decides the pension or regulatory surcharge?
The SERC approves these surcharges in its orders. They should appear in the tariff order or a separate SERC order, which you can ask the DISCOM to cite.
Sources and where to check
- Ministry of Power — Electricity (Rights of Consumers) Rules, 2020 and 2023 amendment on sanctioned load
- Delhi Electricity Regulatory Commission — Delhi fixed charge bands and surcharges
- TNPDCL — Tamil Nadu tariff order and schedule of charges
- India Code — state electricity duty acts and the Electricity Act, 2003
