Electricity Bill Glossary

Connected load is the sum of the wattage of everything that can draw power on your premises. You declare it when applying for a connection, and the DISCOM sanctions a sanctioned load against it. For low-tension (LT) domestic and small commercial consumers, fixed charges are usually billed per kW of sanctioned load. High-tension (HT) and large consumers instead contract a contract demand in kVA and are billed on maximum demand.

Electricity duty is a state tax, not a DISCOM charge. It is added to your bill as either paise per unit or a percentage of the energy charge, and the rate is set by your state government — so it varies from state to state and by consumer category. Because it is a government levy, it is typically calculated on the energy charge (and sometimes the fuel surcharge) but not on itself. Some categories, such as agriculture or lifeline domestic slabs, are partly or fully exempt.

The fixed charge recovers the cost of keeping capacity available for you — wires, transformers and the sanctioned load reserved for your connection. It is billed even in a zero-consumption month. Common structures are a flat amount, a rate per kW of sanctioned load, or (for larger consumers) a rate per kVA of maximum demand. For HT consumers this "demand charge" is often the single largest line on the bill.

DISCOMs buy power at prices that move with fuel costs and market rates. When the actual cost differs from the cost baked into the approved tariff, the regulator lets the DISCOM recover (or refund) the gap through the FPPA — a surcharge that changes every month or quarter. It is applied in one of two ways depending on the state's tariff order:

• Per unit — a flat paise-per-unit amount added to every unit consumed.
• Percentage — a percentage of your energy (or energy + fixed) charge.

A negative FPPA is a credit that reduces your bill. Our calculator applies each DISCOM's current FPPA automatically. The same concept is also called FPPCA, FAC or simply the fuel surcharge.

Ordinary meters record kWh (real energy). Many commercial and industrial connections are instead billed on kVAh — apparent energy, which is kWh ÷ power factor. Because a low power factor makes kVAh larger than kWh, kVAh billing automatically charges you more when your power factor is poor, replacing the separate power-factor penalty. Improving power factor (for example with capacitors) brings kVAh close to kWh and lowers the bill. Pick the kVAh basis in the calculator if your meter and tariff use apparent energy.

If you miss the due date, the DISCOM adds a Late Payment Surcharge — typically a percentage (often around 1.25–2% per month) of the unpaid amount. In a multi-month arrears situation it compounds on the running balance, so a small overdue amount can grow noticeably. Paying by the due date avoids it entirely. Our calculator can add LPSC and arrears to estimate a realistic total payable.

Demand meters record the peak load your connection pulls, averaged over a rolling window (commonly 15 or 30 minutes). The highest such value in the month is your maximum demand. The billed demand is usually the higher of your recorded demand and a contracted minimum (often a percentage of contract demand), and the demand charge is levied on it. Drawing more than your contracted demand can trigger an excess-demand penalty at a multiple of the normal rate.

The minimum monthly charge guarantees the DISCOM a baseline recovery per connection. When your energy charge plus fixed charge for the month add up to less than the specified minimum — common in vacant premises or very low-usage months — the bill is raised to the MMC. It is often expressed per kW of sanctioned load, so a higher sanctioned load raises the floor. This is why a barely-used connection still generates a bill.

On connections metered through a current transformer (CT) or potential transformer (PT), the meter sees only a scaled-down fraction of the real current or voltage. The multiplying factor converts the meter's raw reading back to actual consumption: units = (present reading − previous reading) × MF. For almost all direct-metered domestic connections MF = 1, so the subtraction alone is your usage. On CT-metered commercial or HT connections MF is typically greater than 1, and a wrong MF is a serious billing error worth checking on your bill.

With net metering, your solar system feeds surplus generation back into the grid and a bidirectional meter tracks both directions. You pay energy charges on net import = imported − exported − banked credit. If you export more than you import in a month, the surplus is banked as a unit credit carried to the next month (usually settled annually). Fixed and demand charges still apply on your sanctioned load regardless of solar. Estimate your savings with the rooftop solar calculator.

Power factor measures how effectively your load turns supplied power into useful work. A purely resistive load (heater, incandescent lamp) has a PF near 1; motors, pumps and transformers pull it lower. A low power factor means the DISCOM must supply more apparent power (kVA) for the same real work, so tariffs discourage it — either through a power-factor penalty/incentive or by billing on kVAh, which rises automatically as PF falls. Capacitor banks are the usual fix.

When your connection is approved, the DISCOM sanctions a load based on your declared connected load. This sanctioned figure is what fixed charges and the minimum charge are calculated on. Regularly drawing more than your sanctioned load can attract an excess-demand penalty and, over time, a demand for load enhancement. It appears on your bill as "Sanctioned Load" or "Contract Demand" and is entered as the load in our calculator.

Most Indian domestic tariffs are billed slab-wise — the technical name is "telescopic". If the slabs are 0–100, 101–300 and 300+ units, a consumer using 250 units pays the first-slab rate on the first 100 units and the second-slab rate only on the next 150 — not the higher rate on all 250. This is the opposite of a "slab-benefit-lost" tariff, where crossing a threshold applies the higher rate to every unit, creating a cliff. Knowing which one your DISCOM uses explains why a bill can jump sharply near a slab boundary. Our calculator applies each DISCOM's slabs exactly as published.

Under a Time-of-Day tariff, the day is split into blocks — typically peak (a surcharge on the base rate), normal, and off-peak (a rebate). Your meter records units in each block separately, and running heavy loads off-peak lowers the bill. ToD is becoming mandatory for larger consumers and is being extended to domestic consumers under national tariff reforms. Enter your peak / normal / off-peak units in the calculator, and see the Time-of-Day billing guide for a full worked example.