Electricity Bill Calculation

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What are Power and Energy?

Power and Energy/Electricity are two words that are used so much for each other that many feel that they mean the same. Interestingly both of them have a very different meaning. Power is the rate at which electricity is used and energy/electricity is the actual consumption. To give an analogy, power is similar to speed but electricity/energy is the actual distance traveled.

Power and its units

Power is always represented in watt (W) or kilowatt (kW). A thousand (1000) watts make one kilowatt. So if any appliance is rated as 1.2 kW then it means that it consumes electricity at a rate of 1200 W. Now as we discussed earlier that power is the rate at which electricity is consumed and not the actual electricity consumed, Watt or Kilowatt just represent the rate at which electricity is consumed per hour. Which means that when you buy a 100 W bulb, it does not consume 100 units of electricity but consumes at a rate of 100 W.

Energy/Electricity and its units

A unit (as mentioned on the electricity bills) is represented in kWH or Kilowatt Hour. This is the actual electricity or energy used. If you use 1000 Watts or 1 Kilowatt of power for 1 hour then you consume 1 unit or 1 Kilowatt-Hour (kWH) of electricity. So the reading on the electricity meter represents the actual electricity used. Just like the odometer on your vehicle that shows the actual distance travelled by the vehicle, electricity meter shows the amount of electricity that is used. So a 100-Watt bulb if kept on for 10 hours will consume:

Know your bill calculation

Step 1: – Calculation of units consumed

It is derived on the basis of difference of current & previous meter reading & further multiplied by the applicable multiplying factor of your meter.

Step 2: – Calculation of bill period (Slab)

Bill period (Slab) is calculated for the purpose of fixed charge calculation and bifurcation of units in case of block / tariff / category change. It is derived from the difference of Current & Previous Reading dates.

Slab Calculation Process:

Bill period: 24.07.2014 to 06.08.2014

Step 3: – Calculation of Fixed Charges

Fixed Charges are the fixed amount charged for billing period according to the load, applicable rate and slab.

  • For Domestic rate category: –
  • For Sanctioned Load till 2 kW

Rate = Rs.40.00/Month

Fixed Charge = Rate x Slab

  • For Sanctioned Load > 2 – 5kW

Rate = Rs.100.00/Month

Fixed Charge = Rate x Slab

  • For Sanctioned Load > 5 kW

Rate = Rs.25.00/Month/kW

Fixed Charge = Rate x Slab x Load

Applicable Rate for 6kW = Rate x Slab x Load

Fixed Charge = 25.00 x 0.4516 x 6 = Rs.67.74

  • For Others (Agricultural / Industrial / Non Domestic) Sanctioned Load upto10 kW: –

Fixed Charge = Rate x Slab x Sanctioned Load (SL)

Where MDI exceeds SL: – 30%

Surcharge on Fixed Charge is levied

@ ((MDI- SL) x Rate x Slab) x 30%

Step 4: – Calculation of Energy Charges

Energy Charges are calculated based on the block price applicable for units consumed in the billing period

Block details for units consumed = 696

  • For Others (Agricultural / Industrial / Non Domestic) Sanctioned Load up to 10 kW: –

Step 5: – Calculation of Surcharge

Energy Charges = Rs.5029.05 …… (Refer to Step 4)

Surcharge Rate = 8% on Energy Charges

Surcharge on Energy Charges = Rs.5029.05 x 8% = Rs.402.32

Fixed Charges = Rs.67.74 …… (Refer to Step 3)

Surcharge Rate = 8% on Fixed Charges

Surcharge on Fixed Charge = Rs.67.74 x 8% = Rs.5.42

Step 6: – Calculation of Electricity Tax

(As per applicable tariff, ETAX is leviable @ 5 % on Energy Charges + PPAC (Energy Charges) + Surcharge (Energy

Charges relevant for ETAX calculation:

Energy Charges = Rs.5029.05 …… (Refer to Step 4)

PPAC on Energy Charge = 0.00 …… (Refer to Step 5)

Surcharge on Energy Charge = Rs.402.32 …… (Refer to Step 6)

ETAX = (5029.05+0.00+402.32) x 5% = Rs.271.57

Step 7: – What is the basis of calculation of current demand amount?

Total Current Demand comprises of Energy Charges + ETAX + Fixed Charges and any other charges levied by DERC like; PPAC, Surcharges etc.

Total = Rs.5776.10

Arrears / Refunds:

Arrears refers to either payment that are overdue or payments that are to be made at the end of a period. An account is said to be in arrears if the debt, liability, or obligation expected is overdue. Arrears reflected are previous billed current demand +/- adjustment remained unpaid and payable immediately. Refund constitutes previous billed provisional amount now adjusted in current bill. When the bill becomes overdue, say 30 days past the due date for payment, the account becomes in arrears and the account holder may get a late notice. There are also instances where bills or liabilities come due after the service has been provided such as utility bills, property taxes, and employee salaries. These payments are known as Payment in Arrears and occur at the end of the period, therefore, are not classified as late payments.


These are charges debited / credited in this bill due to bill revision / adjustment done – details. The total of any adjustments applied to your account since your last bill.


A subsidy is a benefit given by the government to groups or individuals, usually in the form of a cash payment or a tax reduction. The subsidy is typically given to remove some type of burden, and it is often considered to be in the overall interest of the public. Allowed as per notification released from Govt. of State if applicable.


Late payment surcharge is levied on amount remained unpaid from relevant due date till the date of payment.

Net Amount Payable:

Total of Arrears / Refund / Adjustment / Current Demand / Subsidy & LPSC


  1. Bunty B. Bommera
  2. Dakshata U. Kamble

[/vc_column_text][/vc_column][vc_column width=”1/3″][/vc_column][/vc_row][vc_row][vc_column width=”2/3″][vc_column_text]AUTHORS
1.Bunty B. Bommera
2.Dakshata U. Kamble[/vc_column_text][/vc_column][vc_column width=”1/3″][/vc_column][/vc_row]

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