A tariff is a way to charge people for their use of power. It is also called a scheduled rate or charge. The primary goals of the tariff are to return the initial financial outlay and keep the service uninterrupted. Electricity is expensive in Singapore. The electricity market allows you to enjoy the advantages of having more choices and freedom when buying your electricity. The singapore electricity tariff offers many benefits to the residents of Singapore. Read on to know more about this tariff and its characteristics.
An Introduction To Electricity Tariff
The electricity tariff is the price at which electrical energy is available to customers. The tariff includes a reasonable fee for the cost of producing and supplying electricity. The cost of producing electric energy is dependent on how much the user consumes and the conditions of his load. The main objective of electricity tariffs is to recover the cost of production, transmission, operation, and maintenance.
- Simple Tariff – Simple tariff is when there is a constant price per unit of energy utilized.
- Flat Rate Tariff – A flat rate tariff is when different customer types get a charge at different consistent per-unit prices.
- Block Rate Tariff – A given energy block charges at a specific rate under a block rate tariff and subsequent energy blocks are taxed at progressively lower rates.
- Power Factor Tariff – A power factor tariff is when the cost of electrical energy is determined by considering the load power factor of the consumer.
Different Characteristics Of Electricity Tariff
- Proper Return: A fair profit should be added to the tariff so that the total amount collected from customers covers the cost of creating and supplying electrical energy. The tariff should ensure correct return from each consumer. This guarantees power supply and a dependable level of service to customers.
- Fairness: Fairness in the tariff is necessary to ensure that different consumer types are happy with the cost of electrical energy. A large consumer uses more energy than a small consumer. The fixed costs are spread over large units, which lowers the overall cost of producing electrical energy. A large consumer should be charged less than a small consumer.
- Simple and Attractive: The tariff needs to be clear and easy to understand for the average consumer. It should also be appealing to encourage a large number of people to use power.