First Look Blog

Articles written by the First Look team.


Understanding Electricity and Water Invoices

Published by Ken Nunes on 29/06/2015


Understanding your Electricity and Water invoice is important and another of the reasons First Look was developed. An initial glance at the monthly invoices we receive from the Service Provider (ESKOM and Municipality) can be quite daunting.

This article is intended as a simple guide to Members of a school’s SGB, which we trust brings some clarity and demystify the content of the bills.

The Municipality bills generally have two pages:

Page 1: A financial overview of your account with the Municipality, including the charges for the actual month.

Page 2: A technical overview of consumption for the month in question.

PAGE ONE: Page 1 contains all the following information:

1. Date:

2. Statement for: The month the bill refers to.

3. The Address of the Premises, together with associated details of the site.

4. An Invoice Number:

5. Next Reading Date: 

6. The Account Number of the Meter and an associated Pin Code for online viewing of the bills. (Electricity or Water).

7. Previous Account Balance: The total balance outstanding (this is the outstanding amount we owe the Municipality and which includes any previous non-payments of the past).

8. Less: Incoming Payment: The amount paid to the Municipality during the previous month.

9. Sub Total: Previous Balance minus Incoming Payment, if any had been made.

10. Interest on Arrears: On the outstanding balance.

11. Current Charges: The current months’ charges, details of which are on Page 2.

12. Total Amount Outstanding: The total amount that we owe, which if we pay our bills each month, should be equal to the Current Charges.

13. Further details of outstanding payments due over 90 days, 60 days and 30 days, and instructions on methods of payment, etc, complete Page 1.

Of course, looking at Page 1 as an isolated invoice tells us nothing more than what we need to know of an individual month i.e. Total Amount Outstanding. The rest of the information becomes almost peripheral to this most important detail.

This total is however merely a snap-shot of the history of your electricity account, and should not be confuse with your CURRENT CHARGE.

PAGE 2: Page 2 of the invoice contains the consumption of the previous month:

14. Reading Period: The dates, which the reading refers. This is generally a period of around 31 days and should (in principle) be the last month.

       14.1 At this point, the bill advises us if the meter reading is ACTUAL or ESTIMATED. This will be the cause of extreme confusion some months, as meter readings are estimated some months, which, when the meter is physically read (actual reading) a series of rectifications are made, denoting Reversal Charges, which may be “logical to the Municipality”, although an absolute confusion for the consumer.

       Not to labour this point, some bills would consider a period dating back several months, the outcome of which requires pages of Reversal Charges, quite impossible to follow in the context of one invoice.

15. Energy or Water Meter Reading and Consumption: The meter number (electricity or water) is stated, and the start reading and end reading consumption is detailed, together with the total kWh/KL consumed – this being the difference between the start reading and end reading.

       15.1 The start reading will be equal to the end reading of the previous month.

       15.2 For electricity in schools where the services were installed some years ago, “3 (individual) Single Phase” meters are installed instead of “1 Three Phase meter”. In this case, the numbers of all three meters are noted, with start readings and end readings, added to give the total consumption.

       15.3 More recently, these “single phase meters” have been replaced by a three phase meter, more likely a “smart meter” which can bring many advantages to the electricity consumer and service provider, although these advantages are not presently being explored.

       15.4 In the case of electricity (where a larger electricity supplies is installed), the invoice will detail a Reactive meter reading and consumption, which for schools, is generally a R0.00 cost.

       15.4.1 Reactive Charges: As a simple note of explanation, this is known as a “technical charge” attributed to consumers with a poor Power Factor (which causes Power Plants and Transmission inefficiencies) who will pay more for their electricity than consumers with a good Power Factor.

       15.5 Where larger electricity supplies have been installed and depending on the “Tariff Regime” of the school, a Demand Charge Energy Charge is detailed in KVA. This implies the customer pays a fixed charge (per KVA) and a lower energy unit charge (kWh).

16. Daily Average Consumption: This is no more that the total consumption (in kWh or KL) divided by the number of days of the reading period.

17. Charges: These are the actual Electricity or Water Charges relating to the reading period.

       17.1 In the case of Electricity and depending on the “tariff regime”, additional charges will apply:

       17.1.1 Demand Side Management Levy

       17.1.2 Service Charge

       17.1.3 Network Charge

       17.2 Again, depending on the tariff regime, the electricity bill will also detail various STEPS (up to 5) where the unit rate (kWh charge) is higher as consumption increases. This is considered the biggest incentive for efficiency and varies during summer and winter periods.

        As an example, the present Summer Rate (2015/06) Step 1: R1.3740/kWh increasing to Step 5: R1.6924/kWh. Winter Rates vary between Step 1: R1.5215/kWh and Step: 5 R1.8399/kWh.

       17.3 In the case of Water, there is an additional charge for Sewage, a monthly charge based on your consumption of Water units (KL) consumed, a standard charge per KL, although (for some reason) the actual KL price is not detailed.

       NOTE: The sewage charge assumes that all water consumed goes directly through the sewage system, which may well not be the case in the context of schools with swimming pools and water their sports fields with municipality supplied water, etc. It will certainly not be the case should there be an underground leak - an issue First Look shall be commenting on shortly.

18. VAT: Charged at 14%In the case of Electricity, some additional charges will apply, which will include:

19. 2% Surcharge and Pre-Termination notices, where VAT is also applied.

20. Current Charges: The total of the actual month charges.

As can be seen, Page 2 information can be considered complex, certainly more technical and some understanding of tariff regime, kWh and KL, and sewage charges, consumption rates, tariff regime, etc, etc. is needed.

This, in effect, is the starting point of First Look. Key Performance Indicators provides a guide to understanding Municipality Bills, giving an immediate overview of how each month relates to a period of 3-years.

In truth, the invoice is not rocket science. The details contained therein can be considered a minimum that is required of the service provider to provide. It tells us as much as we need to know, i.e. how much we need to pay!!!

We see a world where this will change over time (sooner rather than later), where consumption details of  “smart meters” of the service providers will be made available to consumers, who will then be able to look at waste and efficiency from real-time consumption data, provided by the service provider.