---
title: "HV vs LV supply tariff for a factory"
subject: "Utilization of Electrical Energy"
chapter: 6
key: "semester_7/utilization_of_electrical_energy:factory-hv-vs-lv-tariff"
source: https://www.bctengineer.com/q/semester_7/utilization_of_electrical_energy/factory-hv-vs-lv-tariff
site: BCT Engineering
---

# HV vs LV supply tariff for a factory

Utilization of Electrical Energy · Chapter 6: Demand Side Management

- Asked in: 2079 Baisakh, 8 marks
- Answer checked by Claude Opus 5.5 (high effort) on 2026-10-14
- Page: https://www.bctengineer.com/q/semester_7/utilization_of_electrical_energy/factory-hv-vs-lv-tariff
- Whole chapter: https://www.bctengineer.com/md/semester_7/utilization_of_electrical_energy/chapter-6

## Question

A factory works for 16 hours a day for 300 days in a year. The following two systems of tariff are available:
• High voltage supply at Rs. 1 per unit plus Rs. 50 per month per kVA of maximum demand.
• Low voltage supply at Rs. 60 per month per kVA of maximum demand plus Rs. 1.1 per unit.
The factory has an average load of 250 kW at 0.8 power factor and a maximum demand of 300 kW at the same power factor. The high voltage equipment costs Rs. 500 per kVA and losses can be taken as 5%. Interest and depreciation charges are 12%. Calculate the difference in the annual cost between the two systems.

## Short answer

Annual energy 1,200,000 kWh, max demand 375 kVA. LV cost: demand Rs 270,000 + energy Rs 1,320,000 = Rs 1,590,000. HV cost includes 5% losses: demand 394.74 kVA, energy 1,263,158 kWh, plus equipment charge Rs 22,500, total Rs 1,522,500. Difference Rs 67,500; HV is cheaper.

## Answer

**Data:** working hours = 16 × 300 = 4800 h/year; average load 250 kW; maximum demand 300 kW at 0.8 pf.

$$
\begin{aligned}
\text{Energy used} &= 250 \times 4800 = 1{,}200{,}000\ \text{kWh} \\
\text{Max demand} &= \frac{300}{0.8} = 375\ \text{kVA}
\end{aligned}
$$

#### Low voltage supply
$$
\begin{aligned}
\text{Demand charge} &= 60 \times 12 \times 375 = \text{Rs } 270{,}000 \\
\text{Energy charge} &= 1.1 \times 1{,}200{,}000 = \text{Rs } 1{,}320{,}000 \\
\text{Total} &= \text{Rs } 1{,}590{,}000
\end{aligned}
$$

#### High voltage supply
With HV supply the consumer owns the transformer and switchgear, and their 5% losses are metered on the HV side. The HV equipment is rated for the factory's 375 kVA maximum demand.
$$
\begin{aligned}
\text{Max demand on HV side} &= \frac{375}{0.95} = 394.74\ \text{kVA} \\
\text{Energy on HV side} &= \frac{1{,}200{,}000}{0.95} = 1{,}263{,}158\ \text{kWh} \\
\text{Demand charge} &= 50 \times 12 \times 394.74 = \text{Rs } 236{,}842 \\
\text{Energy charge} &= 1 \times 1{,}263{,}158 = \text{Rs } 1{,}263{,}158 \\
\text{Cost of HV equipment} &= 500 \times 375 = \text{Rs } 187{,}500 \\
\text{Interest and depreciation} &= 0.12 \times 187{,}500 = \text{Rs } 22{,}500 \\
\text{Total} &= 236{,}842 + 1{,}263{,}158 + 22{,}500 = \text{Rs } 1{,}522{,}500
\end{aligned}
$$

| System | Annual cost (Rs) |
|---|---|
| Low voltage | 1,590,000 |
| High voltage | 1,522,500 |

**Answer: Difference in annual cost = Rs 67,500; the high voltage supply is cheaper.**

(If the HV equipment is instead rated for 394.74 kVA, its annual charge is Rs 23,684 and the difference becomes Rs 66,316.)

## Check yourself

The answer's key points as multiple-choice questions, with the correct option and why.

1. What is the maximum demand in kVA used for the LV supply?
   A. 300 x 0.8 = 240 kVA
   B. 300 / 0.8 = 375 kVA
   C. 250 / 0.8 = 312.5 kVA
   D. 300 kVA
   Answer: B. kVA = kW / pf = 300/0.8 = 375 kVA. (Key point: Maximum demand in kVA)

2. How is the yearly energy found?
   A. Max demand x 4800 h
   B. Average load 250 kW x 4800 h = 1,200,000 kWh
   C. 300 kW x 8760 h
   D. 250 kW x 300 days
   Answer: B. Energy uses the average load and working hours: 250 x (16 x 300) = 1,200,000 kWh. (Key point: Energy used per year)

3. How are the 5% losses accounted for on the HV side?
   A. Demand and energy are divided by 0.95 because losses are metered on the HV side
   B. Demand and energy are multiplied by 0.95
   C. Only the energy is changed
   D. Losses are ignored
   Answer: A. The HV meter sees the load plus losses, so 375/0.95 = 394.74 kVA and 1,200,000/0.95 = 1,263,158 kWh. (Key point: Effect of 5% losses on HV side)

4. Which system is cheaper and by how much?
   A. LV, by Rs 67,500
   B. HV, by Rs 67,500
   C. HV, by Rs 22,500
   D. They cost the same
   Answer: B. LV costs Rs 1,590,000 and HV Rs 1,522,500 including Rs 22,500 interest and depreciation, so HV saves Rs 67,500. (Key point: Result)

## Close variants set in other exams

- [MV vs LV supply tariff for a 2-shift factory](https://www.bctengineer.com/question.md?key=semester_7%2Futilization_of_electrical_energy%3Afactory-mv-vs-lv-tariff) — Utilization of Electrical Energy, chapter 6, asked 2×

## Related in other subjects

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- [EVA; 10 days, 50 labour days at Rs 1000](https://www.bctengineer.com/question.md?key=semester_7%2Fproject_engineering%3Aeva-numerical-labour-days-1000) — Project Engineering, chapter 4, asked 2×