Reading an electricity bill like an engineer
Time-of-use energy, kVA demand, capacity charges, power factor and estimated readings: a method for checking every line item.
- Checks
- 7
- In the order that finds the most
- Power factor
- R19,737
- A month saved, 0.80 to 0.95: 79 kVA less demand
- Overbilled
- R10,000
- One demand line, one month
Read it your way
For engineers, plant and facility managers
Seven checks in the order that catches the most errors: tariff and season, time-of-use split, kVA demand, NMD, power factor, estimated readings, then a line-by-line rebuild against the meter data.
Go to the technical lensFor CFOs, investors, developers and lenders
Correcting power factor from 0.80 to 0.95 cuts billed demand by 79 kVA, about R19,737 a month on a synthetic tariff. One misbilled demand line cost R10,000 in a single month.
Go to the commercial lensThe brief
Most businesses check the total
An engineer checks each line: quantity times rate, against the tariff schedule and the meter data. Seven checks, in the order that catches the most errors, and two worked examples on a synthetic bill.
Technical lens
Seven checks, in the order that finds the most
Energy, demand, yield, metering and savings: what the site or plant can actually do.
01Tariff and season
Confirm which tariff the account is on and which season the bill falls in; many time-of-use tariffs charge far more in a winter high-demand season. The wrong tariff or season makes every other line wrong.
02Time-of-use energy
Split the kWh into peak, standard and off-peak, multiply each by its period rate, and check the split against interval meter data. A shift in the split with no change in operations points to a meter or time-setting problem.
03Demand in kVA
Maximum demand is usually billed in kVA, as the highest half-hour average in the chargeable periods. Check the billed figure against the load profile, and which hours the tariff counts.
04NMD and capacity charges
Network capacity is often charged on the notified maximum demand (NMD) or the actual peak, whichever is higher, with penalties for exceeding the NMD. An NMD set years ago can be too high (paying for idle capacity) or too low (paying penalties).
05Reactive energy and power factor
kVA = kW ÷ power factor, so a poor power factor inflates demand charges and can add reactive-energy (kvarh) charges. Correction is often cheap relative to the saving; the worked example shows the arithmetic.
06Estimated readings
Look for readings marked as estimates. A run of estimates hides errors and ends in a large catch-up bill. Ask for actual readings, then recalculate the estimated months.
07Recalculate every line
Rebuild the bill: quantity × rate for each line, daily and fixed charges × days, then VAT. Differences larger than rounding usually trace to a wrong tariff, a wrong meter multiplier, or rates not updated on the tariff increase date.
Worked example: power factor
Synthetic site and synthetic demand charge of R250/kVA a month.
| Monthly peak | Before | After correction |
|---|---|---|
| Real power | 400 kW | 400 kW |
| Power factor | 0.80 | 0.95 |
| Billed demand | 500 kVA | 421 kVA |
| Demand charge | R125,000 | R105,263 |
Same kW, 79 kVA less demand: about R19,737 a month, before any reactive-energy charge. Divide the cost of correction equipment by that figure for a first payback estimate.
Commercial lens
What one wrong line costs
Contracts, tariffs and who carries which risk.
Synthetic bill and tariff, excluding VAT.
| Line | Quantity | Rate (R) | Recalculated | Billed | Difference |
|---|---|---|---|---|---|
| Peak energy | 38,000 kWh | 3.20 | R121,600 | R121,600 | – |
| Standard energy | 96,000 kWh | 2.05 | R196,800 | R196,800 | – |
| Off-peak energy | 74,000 kWh | 1.30 | R96,200 | R96,200 | – |
| Demand charge | 500 kVA | 250.00 | R125,000 | R135,000 | R10,000 |
| Network capacity (on NMD) | 600 kVA | 80.00 | R48,000 | R48,000 | – |
| Fixed charge | 31 days | 150.00 | R4,650 | R4,650 | – |
Every line reconciles except demand: the interval data peaks at 500 kVA but the bill charges 540 kVA. One line, R10,000 in a single month, and it only shows up when each line is rebuilt from the meter data. Across a year, and across the NMD and power-factor checks above, small lines like this are where the money is.