Understanding Electricity Tariff Regimes

Large consumer v business tariff
Having previously discussed the theme of Is Your School Paying too much for Electricity, we have just completed a study of the Municipal Electricity Accounts of another Primary School in Johannesburg, which perfectly highlights the serious problem of Incorrect Tariff Regime.

As a Principal and SGB, you are of course expected to understand the different tariff regime the Municipality attributes to your school's Electricity Account. Indeed, the example detailed in the image above, clearly illustrates the school paying over R100,000.00 each year, which could definitely be avoided.

The Municipality of Johannesburg attributes tariff depending on the school's electricity consumption. This generally falls under one of the following tariff regimes:

LARGE CONSUMER TARIFF: 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…”

The image above illustrates two Electricity Accounts at the same school. (Several Schools actually have two electricity accounts, generally caused by adding new buildings over the years). 

In the example, the accounts have very similar annual kWh consumption, although each account is on the different tariffs mentioned above. i.e. one account on Large Consumer Tariff, the other on Business Tariff.

The resulting electricity costs however, vary dramatically:

2017: Large Consumer Tariff: 89,007 kWh at a Cost R315,822.00 - Business Tariff: 83,983 kWh at a Cost of R206,502.00

2018: Large Consumer Tariff: 100,007 kWh at a Cost R315,906.00 - Business Tariff: 83,992 kWh at a Cost of R217,126.00

2019 (to June): Large Consumer Tariff: 48,606 kWh at a Cost R195,165.00 - Business Tariff: 42,126 kWh at a Cost of R115,013.00

Of course, there is no technical reason for the school to be on two different tariffs. The Large Consumer Account has been incorrectly attributed by the Municipality, which has gone unquestioned since at least 2012 and effectively means that over the intervening 8 years, the schools has supported an additional R800,000.00.

To change this is a very labourious process, implying monitoring, reporting, analysis, justifications and far too many meetings with the Municipality. The reward is however massive reductions on Electricity Costs, which will eventually pay for the various Efficiency Measures being implemented, such as LED Lighting and Solar PV, which will reduce the overall Electricity costs by over 60%.

Suntricity is ready and able to assist your school. Please do not hesitate to contact Hendry van Branden (Suntricity CEO) on 011 534 8695 or schedule a meeting by e-mail: mail@suntricity.co.za.