Demand side Management is attracting researchers willingly in 21 century because distribution sector is still weakest among all the three entities of Power System (Generation, Transmission and Distribution) in India. This paper proposes a load index based clustering (LIBC) algorithm to develop cluster based approach for splitting 24 hours' time horizon with respect to the load identification pattern of various zones having more than 700 domestic households. The peak and off peak clusters calculated by the proposed LIBC algorithm has been integrated and analyzed with the different pricing models to verify suitable tariff structure for the domestic consumer with respect to the geographical conditions. The objective is to reduce peak to average ration (PAR) of consumer. In addition the impacts of power factor have also been analyzed with existing tariff structure. The proposed LIBC algorithm is designed on the basis of centroid model and load index cluster coefficient, calculated through the load data set and validated by load profile of customers. Therefore, the deployment of the proposed algorithm is beneficial for both end users and utility companies in order to implement the automatic scheduling strategies of load under advance metering infrastructure (AMI).
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