Chandigarh, June 25 -- In a move that could affect how businesses are billed for electricity, the Joint Electricity Regulatory Commission has ordered the Chandigarh Power Distribution Limited (CPDL), the city's distribution utility, to abandon a contentious formula used for estimating power consumption and instead bill consumers based on their sanctioned load, at least for now. Sanctioned load refers to the maximum electricity capacity a consumer is officially allowed to use at any given time, essentially, the size of their power connection approved by the utility. For instance, a small shop may have a sanctioned load of around 5 kW, while restaurants or showrooms may require 15-20 kW, and factories even higher. This approved limit becomes the baseline for billing. In practical terms, electricity bills, especially for commercial users, have a fixed component linked to this sanctioned load and a variable component based on actual consumption. That means consumers pay a set charge per kW for the capacity reserved for them, regardless of usage, along with charges for units consumed. In Chandigarh, however, the power distribution firm relies on conversion factors of 0.85 for low-tension users and 0.90 for high-tension and extra high-tension consumers. Reason: While regulators mandated a shift to kilovolt-ampere hour (kVAh)-based billing in late 2025, many electricity meters in the city still cannot record those readings. That left CPDL relying on formulas to convert apparent power (kVA) into real power (kW), a workaround traders say introduced opacity and, in some cases, higher bills. For instance, if a consumer used 100 kWh of electricity, it was first converted into kVAh by dividing it by 0.85. That made the billed consumption about 117.65 kVAh, meaning the consumer was effectively being charged more electricity than they actually used, roughly 17.65% extra. Now, this system has been changed. Instead of using this conversion formula, billing will be done on a simple basis: 100 kWh will be treated as 100 kVAh (using a unity factor of 1). Implying, consumers will now be charged for what they actually use, without the extra added through calculations. This is why it is being seen as a relief, especially for commercial users. In its order, the commission acknowledged both the limitation and the complaints. "Where compatible meters are not available, utilities elsewhere have adopted a billing model based on sanctioned or contracted load. Chandigarh will now follow that model," the regulator noted. The decision takes effect immediately and will remain in place until smart meters capable of recording kVAh consumption are installed across all consumer categories, a process CPDL says it aims to complete by March 2028. SK Nayar, president, Indian Citizens Forum said, "It is a big relief to consumers of Chandigarh where such tariff-based meters have not been installed." The CPDL spokesperson said the JERC orders will be complied with and implemented with effect from the date of order....