Is your school paying too much for Electricity?

Many of the schools we speak to in Johannesburg feel that the cost of their electricity is too high.

There are two main reasons for high electricity cost in schools:

1. You may be on the wrong tariff.

2. You are consuming too much kWh.

While ITEM 2 is within the control of the individual school to become more efficient, ITEM 1 is rather complex, although relatively simple to determine.

All the schools being monitored by Suntricity, fall under one of two tariff regime.

LARGE CONSUMER: The Municipality defines a Large Consumer tariff as: “...applicable to Business consumers, with supply capacities exceeding 100 kVA”. 

BUSINESS TARIFF: Similarly, the Municipality defines a Business Tariff Consumer as: “...applicable to supply consumption capacities not exceeding 100 kVA…”

Your school’s tariff regime is not distinguish on the invoice you receive from the Municipality each month. However, you can determine this by just checking the details on Page 2 of the invoice.

Large Consumer Tariff Invoices will contain the following:

Demand charge Energy charge 70.000 kVA @ R170.78 - R11,954.60

It is worth noting the Energy Charge in the Large Consumer Tariff regime is as follows:

Energy charge 9,151.000 kWh @ R1.1431 (Billing Period 2017/03) = R10,460.51
Note that the Demand charge Energy charge is more that the kWh (electricity consumption) charge.

Business Tariff Invoices however, will typically contain the following:

Charges for 6,881.000 kWh are based on a sliding scale for a 28 day period:

Step 1 459.959 kWh @ R1.6478 ( Billing Period 2017/03 ) Step 2 459.959 kWh @ R1.8086 Step 3 919.918 kWh @ R1.8966 Step 4 919.918 kWh @ R1.9658 Step 5 4,121.246 kWh @ R2.0296

There are other charges that apply in both tariff regimes, which represent a small percentage of the overall cost of your electricity bills.

Looking closely at the detail, you will note that, the LARGE CONSUMER TARIFF charges the lower kWh rate of R1,1431 (in the example above (for March 2017), and for the BUSINESS TARIFF, various STEPS (Step 1 to Step 5 in the example above for March 2017) apply, where the kWh charge is much higher between Step 1 - R1.6478 to Step 5 – R2.0296.

Therefore, if your schools is on the LARGE CONSUMER TARIFF, and your KVA charge has been the minimum applicable 70KVA for the past 12-months or more, it is absolutely certain that you are on the wrong tariff regime and you need to change.

More importantly, it probably means that you can save up to 40% of your electricity cost, just by changing to the correct tariff regime.

An interesting question arrises: If your school has been on the incorrect tariff regime for say 2 or 3 or 5-years, are you entitled to retrospectively claim a credit? After all, your school did not ask to be on the incorrect tariff regime, which may have cost your school R400,000...your tariff is automatically applied by the Municipality, who must surely be held responsible for the error.

One of the services provided by Suntricity is to analyse and resolve your tariff regime: