By Kumar David –
The tariff structure used by the CEB for several years is plain stupid. The design folks must be afflicted with brain fever. I have complained often about invalid principles but neither Chairman, nor Board, nor GM, nor the dozens of DGMs have a clue. Now thanks to corona they are all up shit-creek and a Committee of Inquiry is looking into how the CEB shat on its own doorstep. Don’t worry, nothing will come of it, like every other Task Force.
First, before giving you a real-world example let me start with stylised illustrations.
In the old intelligent days, domestic tariff slabs went like this (illustration only):
First 50 units say Rs 5 per unit (kWh)
Next 50 units say Rs 10 per unit
Next (that is 101 to say 200) units say Rs 20 per kWh
Next slab above 200 units say Rs 40 per unit
And so on with slab sizes and rates designed to earn the total revenue needed by the Corporation.
If you consumed 51 units your bill would be 50×5 + 1×10 = Rs 260.
If you consumed 101 units your bill would be 50×5 + 50×10 + 1×20 = Rs760.
If you consumed 201 units you pay 50×5 + 50×10 + 100×20 + 1×40 = Rs2790.
The Stupid Tariff that the CEB introduced a few years ago goes like this (stylised example):
Fist 50 units say Rs 5 per unit
Above 50 units but below 100 units you pay Rs 10 on all units
Above 100 but below 200 you pay Rs 20 per unit on all units
Above 200 but below say 400 you pay Rs 40 on all units.
And so on, for example.
So, if you consume 51 units you pay 51×10= Rs 510 (Instead of Rs 260 in the previous scheme)
If you consume 101 units you pay 101×20 = Rs 2020 (Instead of Rs760 in the previous scheme)
If you consume 201 units you pay 201×40 = Rs 8040 (Instead of Rs 2790 in the previous scheme)
The marginal price of the 51-st unit is 510-250 = Rs 260 for just one more unit from 50 to 51. Wow!
The marginal price of the 101-st unit is 2020-(100×10) = Rs 1020 for the last unit from 100 to 101. Lunacy!!
The marginal price of the 201-st unit is 8040-(200×20) = Rs 4040 for just one last unit from 200 to 201. Jesus!!!
Here is a real-life case – leaving out Fixed Charges and subsidies to keep it simple – which came into the clear because of Covid-19 and curfew which kept the meter reader away for three months. Consumption at a real household from 14 April 2020 to 13 July 2020 (three months) was 303 units. The meter reader, poor sod, was at his wits end what to do, so he arbitrarily decided to make it 123 units 14 April to 13 May, 123 units 14 May to 13 June and 57 units 14 June to 13 July. Leaving out Fixed Charges again, the kWh charges worked out at Rs 1572 for the first 30 days, Rs 1572 for the second month and Rs 266 for the third 30 days. Total: Rs 3410 for 3 months
That’s ok. The issue is not the amount but the irrationality of the method. If the meter reader’s subjective allocation between months had been different the charges could have been far different and the total absurdly higher or lower. If the entire 303 units had been assigned to one month the total would have been Rs 9211, if spread equally over the three months the total would have added up to Rs 3060.
Domestic consumers all over the country are now up in arms about incoherent and absurd tariff policy. It took curfew to prove that the CEB’s tariff structure is trash. The correct tariff should be a flat equal kWh charge for all. Subsidising some users does not make sense. When the poor buy sugar or onions is the price different? Welfare should be direct, not mixed into tariff systems. It gives rise to scams as well. If you get your premises registered as two places you can get away with a lower combined bill. Under current CEB tariffs, 50 units each in two premises (upstairs and downstairs say) attracts a total charge of 2×234 = Rs 468 (including two fixed charges of Rs 60 each), but a single house using 100 units will pay Rs1586 (including a fixed charge of Rs480). Why the huge difference? Take two neighbours, one normal, the other is using a frequent metering scam, that’s what this shows. Throw out the CEB’s idiot tariff! Oh no forget it! The Task Force is not up to the task.