During the recent corona virus lockdown, other than the ginormous issue of the pandemic itself, one of the issues that bogged down many people in India was the issue of high electricity bills. The common reason given by electricity supply companies unanimously was that people were home during the lockdown, hence there was a rise in consumption and hence a hike in the bill. Now if the bill was slightly higher, that was acceptable. We received a bill that was almost 5 times our average bill. Here is my theory on why everybody received such high electricity bills.
Higher electricity bills can be attributed to 3 reasons:
- Higher usage during lockdown
- Error in billing
- Bill Calculation Method
Higher usage during lockdown was the default reason given. While I don’t rule that out completely as a possibility, but the bill being exponentially higher makes this reason less likely.
Error in billing is also a possibility, but how could the billing error happen to a majority of folks all of a sudden.
So here is what I think was the most likely reason for the high bills – Bill calculation methodology.
I will show you an example where the same amount of unit consumption for two months, calculated separately costs much lower than the bill calculated combined for the two months.
Basically, for every bill charges are calculated based on units of consumption. Let us say your average energy consumption is 150 units.
Assuming you are charged (hypothetical rates for ease of calculation):
- Rs 5 per unit until you reach 100 units
- Rs 10 per unit until you reach 200 units
- Rs 15 per unit until you reach 300 units
Method 1 – Meter reading performed each month separately
Unit * Cost
100 * 5 = 500 Rs
50 * 10 = 500 Rs
For 2 months (with separate readings), total = 2000 Rs (1000 * 2)
Method 2 – Meter reading performed combined for 2 months
Unit * Cost
100 * 5 = 500
100 * 10 = 1000
100 * 15 = 1500
For 2 months (with single combined reading), total = 3000 Rs
As you can see above, the same 300 units consumed have a different bill when calculated separately versus when calculated combined. The second method resulted in a 50% hike in the bill.