Most of us are not aware of how our power bills are calculated. Even though we feel our power bills are increasing, we rarely give a thought to the methods used by power companies to calculate the bill. This has led to some unnoticeable, yet significant, benefits for the rich.
Almost all states in India use slab rates to calculate power tariffs. These rates are revised every year. Curiously, although the government sets a target revenue for the upcoming year, the rate for each slab appears to be arbitrary. Examples for Delhi, Maharashtra and Kerala slabs are as follows:
Power bills are calculated by applying the charges per unit based on the units consumed under each slab. You’ve probably noticed two things: one, the highest slab is not the same for the three states, and two, the charges under each slab appear almost arbitrary. To understand the implication of this on our bills, we need to plot the slab on the graph and compare it with five random bills.