How BPC robs you to stay afloat
Minister of Minerals and Energy, Lefoko Moagi says Botswana Power Corporation ( BPC) customers are categorised as Domestic, Government, Business ( small, medium and large), Mining and Water pumping.
He said the tariff structure is comprised of Fixed charge, Energy charge, Demand charge for medium to large business only, electrification levy and Value Added Tax ( VAT).
According to the minister, the charges are categorised as the fixed charge which applies to all customer categories to recover BPC administrative costs. He stated that Domestic customers are charged a lower rate than other customer categories.
“To collect the monthly fixed charge, 5thebe is charged for every kWh purchased by customers on prepaid until the applicable fixed charge is fully paid for in a given month. There is the energy charge.
“This is a charge for the actual energy consumed and applies to all customer categories. The rate is different for each customer category. This charge is meant to recover the cost of producing and supplying electricity. The energy charge for domestic customers and small business has two rates.
“A lower rate is charged for the first 200 units ( domestic) and 500 units ( small business) in a month, while a higher rate is applied on consumption above these levels. This is to cushion customers in these categories against high cost of electricity”, Moagi told Ntlo ya Dikgosi.
The minister said there is also demand charge which applies to medium and large business customers only. The charge is based on the peak electricity demand imposed on the network by a customer and is meant to recover capital investment in generation and network infrastructure. He explained that as an example, a business which switches on all its electrical equipment and appliances at the same time including those that are not needed at that particular time, will impose a higher demand on the network compared to a business which only switches on equipment which need to be in operation.
Moagi pointed out that the electricity demand by customers which occur simultaneously drive the total system maximum demand or peak demand which calls for investment in generation, transmission and distribution.
“We have the electrification levy where the charge is 10 thebe per every kWh purchased each customer. The revenue from the Levy is used by Government to subsidise electricity connection costs to enable households to pay a subsidised connection fee of P5 700 or P2 850 ( VAT inclusive) for customers who earn P2 400 monthly or less.
“Value Added Tax is payable by all customers on electricity bills ( including prepaid electricity purchases) as per legislation. There is also maximum demand which is the peak electrical power that would have been demanded from the power grid by the user during the billing period, which is usually one month,” the minister said.
The minister told Ntlo ya Dikgosi that Small Business Sector operates with a two- tier tariff to benefit small businesses from the first 500kWh at a lower tariff in order to stimulate business activity.
He indicated that Water Pumping is a special category to suit water pumping operations and seasonality in farming operations.
Electricity Tariff Rates are published by BPC annually on their website and customer are encouraged to engage BPC directly for an explanation on the tariffs applicable to their connections, the minister advised.
The minister was responding to a question from Kgosi Mosadi Seboko of Malete who had asked the Minister of Minerals and Energy to explain the purpose of the different tariffs charged on the purchase of electricity and how these are accounted for.