Block Rate Pricing

Block rate pricing structures electricity costs into usage tiers, with rates increasing or decreasing based on consumption levels.

How It Works
Consumers are charged in pricing blocks. In an inclining block system, rates rise as usage increases, promoting energy conservation. A declining block system lowers rates for larger users, benefiting industries and high-demand consumers.

Consumer & Grid Impact
By adjusting costs based on consumption, block pricing helps manage demand, incentivizing households to reduce energy use or supporting industrial users with lower rates for bulk consumption.

Adoption & Challenges
Block rate pricing is widely used in residential billing, but designing fair rate tiers requires careful planning to balance affordability, demand management, and grid sustainability.