---
title: "MV vs LV supply tariff for a 2-shift factory"
subject: "Utilization of Electrical Energy"
chapter: 6
key: "semester_7/utilization_of_electrical_energy:factory-mv-vs-lv-tariff"
source: https://www.bctengineer.com/q/semester_7/utilization_of_electrical_energy/factory-mv-vs-lv-tariff
site: BCT Engineering
---

# MV vs LV supply tariff for a 2-shift factory

Utilization of Electrical Energy · Chapter 6: Demand Side Management

- Asked in: 2073 Chaitra, 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-mv-vs-lv-tariff
- Whole chapter: https://www.bctengineer.com/md/semester_7/utilization_of_electrical_energy/chapter-6

## Question

A factory works for 2 shift (8 hours per shift) a day for 285 days in a year. The following two system of tariff are available. (i) Medium voltage supply at Rs 12 per unit plus Rs 1300 per month per kVA of maximum demand. (ii) Low voltage supply at Rs.650 per month per kVA of maximum demand plus Rs.13 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. 700 per kVA and losses can be taken as 5%. Interest and depreciation charges are 10%. Calculate the difference in the annual cost between the two systems.

## Short answer

For 1,140,000 kWh and 375 kVA maximum demand, LV supply costs Rs 17,745,000. MV supply, including 5% transformer losses, costs Rs 20,584,145. Difference is Rs 2,839,145 per year, so LV is cheaper.

## Answer

**Data:** working hours = 2 × 8 × 285 = 4560 h/year; average load 250 kW; maximum demand 300 kW at 0.8 pf.

$$
\begin{aligned}
\text{Energy used} &= 250 \times 4560 = 1{,}140{,}000\ \text{kWh} \\
\text{Max demand} &= \frac{300}{0.8} = 375\ \text{kVA}
\end{aligned}
$$

#### Low voltage supply
$$
\begin{aligned}
\text{Demand charge} &= 650 \times 12 \times 375 = \text{Rs } 2{,}925{,}000 \\
\text{Energy charge} &= 13 \times 1{,}140{,}000 = \text{Rs } 14{,}820{,}000 \\
\text{Total} &= \text{Rs } 17{,}745{,}000
\end{aligned}
$$

#### Medium voltage supply
The consumer installs the transformer and switchgear (rated for the 375 kVA demand); their 5% losses are metered on the MV side.
$$
\begin{aligned}
\text{Max demand on MV side} &= \frac{375}{0.95} = 394.74\ \text{kVA} \\
\text{Energy on MV side} &= \frac{1{,}140{,}000}{0.95} = 1{,}200{,}000\ \text{kWh} \\
\text{Demand charge} &= 1300 \times 12 \times 394.74 = \text{Rs } 6{,}157{,}895 \\
\text{Energy charge} &= 12 \times 1{,}200{,}000 = \text{Rs } 14{,}400{,}000 \\
\text{Equipment cost} &= 700 \times 375 = \text{Rs } 262{,}500 \\
\text{Interest and depreciation} &= 0.10 \times 262{,}500 = \text{Rs } 26{,}250 \\
\text{Total} &= \text{Rs } 20{,}584{,}145
\end{aligned}
$$

| System | Annual cost (Rs) |
|---|---|
| Low voltage | 17,745,000 |
| Medium voltage | 20,584,145 |

The MV demand charge (Rs 1300/kVA/month) is double the LV one, so it outweighs the Re 1/unit lower energy rate.

**Answer: Difference in annual cost = Rs 2,839,145 (about Rs 28.4 lakh); the low voltage supply is cheaper.**

## Check yourself

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

1. How many working hours per year are used?
   A. 8 x 285 = 2280 h
   B. 2 x 8 x 285 = 4560 h
   C. 16 x 365 = 5840 h
   D. 2 x 285 = 570 h
   Answer: B. Two shifts of 8 h for 285 days gives 4560 h. (Key point: Working hours)

2. How is the LV annual cost built up?
   A. 650 x 12 x 375 + 13 x 1,140,000 = Rs 17,745,000
   B. 650 x 375 + 13 x 1,140,000
   C. 1300 x 12 x 375 + 12 x 1,140,000
   D. 650 x 12 x 300 only
   Answer: A. Demand charge is monthly rate x 12 x 375 kVA, plus energy at Rs 13 per unit. (Key point: LV cost)

3. Why is the MV supply costlier despite a Re 1 lower energy rate?
   A. Its MV demand charge is double the LV one, outweighing the energy saving
   B. Its energy is zero
   C. Losses are ignored
   D. Interest is 100%
   Answer: A. Rs 1300 vs Rs 650 per kVA per month; MV total is Rs 20,584,145 against Rs 17,745,000, so LV is cheaper by Rs 2,839,145. (Key point: Why LV wins)

## Close variants set in other exams

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

## Related in Utilization of Electrical Energy

- [Annual charge and pf improvement (Rs 1300/kVA tariff)](https://www.bctengineer.com/question.md?key=semester_7%2Futilization_of_electrical_energy%3Apf-improvement-1200kva-1300-tariff) — Utilization of Electrical Energy, chapter 6, asked 3×
- [Which motor is more economical (two-part tariff)](https://www.bctengineer.com/question.md?key=semester_7%2Futilization_of_electrical_energy%3Aeconomical-motor-two-part-tariff) — Utilization of Electrical Energy, chapter 6

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