Are Schools the Proverbial Cash Cows of Municipalities

We recently made a presentation of the many virtues of FIRSTLOOK™, and having explained the Platforms' Key Performance Indicators and the data the system analyses, the impression of delegates was: Schools are being used as a Cash Cow by the Municipalities, in terms of Electricity and Water billing. It was also suggested that schools should somehow be paying a reduced tariff for the services the Municipality provides for Electricity and Water.

Whilst Municipalities are an easy target, the "cash cow" statement is not necessarily true...at least, more data would be needed to justify this accusation.

Having said that, we do have sufficient data to suggest that Municipalities do not make it easy for their customers (schools), to feel "confidence and trust" of their billing. To qualify this:
  1. Many schools have extended Estimated Billing periods - we have examples of schools (in Johannesburg) where estimated bills have been presented since November 2014 (yes 25-months).
  2. Electricity tariff regime are not consistent between schools, which results in some schools paying a much higher kWh rate - in some cases, almost R4.00 per kWh (where the average is R2.50).
  3. No explanation is offered on the bills, which relates to any historical consumption.
  4. No comparison is given on the electricity and water performance of schools - how does your school compare with others in the District or Province...or even Nationally.
  5. There are examples of schools being presented with a monthly bill of almost R4million.
  6. etc...
And yet, while these issues are indeed too common, and we would clearly suggest that Municipalities need to get their act together, the issues are all easily detectable and solvable, and the Municipality simply provides a credit for cases of the incorrect billing.

On the other hand, what is very clear is that schools do not sufficiently understand their electricity and water invoices, focusing (almost exclusively) on costs. Schools must first understand consumption and take responsibility for consumption, much of which can be avoided (particularly relating to water), where consumption OUTSIDE OF SCHOOL HOURS can be as much as 50% of the total consumption - this is wasteful, in terms of the scarce resources and money.

The point made that schools should pay a lower tariff for electricity and water, we cannot presently support. We feel that a reduced tariff would simply encourage further waste and delay the introduction of efficiency measures. This is indeed the case in Metros such as Ekurhuleni, Tshwane and Mogale City, where Electricity, Water and Sewage rates are significantly lower (as much as 30%), although consumption (kWh and KL) is in many cases higher than the Johannesburg Schools.

Electricity and Water consumption and costs in Schools may be complex, but it's not complicated. We do need to address the issues from the perspective of solutions, as we already understand many of the problems.

There are several entities involved in the management of schools at a National, Provincial and Local level. To simply blame Municipalities (no angel by any means) for the many problems, would however, not be a correct conclusion.