Cenored

TARIFF CHARGES EXPLAINED

SERVICE CHARGE

The service charge (traditionally referred to also as basic charge) is a fixed charge that has the purpose of covering all administrative costs of the particular type of power supply point. In addition it is often designed to recover some of the fixed network costs relating to the type of supply point in question, e.g. the cable costs for house connections or the overhead lines for farm connections. This does include amongst others the costs of

  • reading and controlling of electricity revenue meters,
  • preparation, printing and posting/delivering of accounts
  • reconciliation of accounts with payments, administration of debit orders
  • day to day administrative tasks inclusive of inquiries, notifications etc.

One should consider for example, that it is typically easier and faster to read and collect data on residential installations than for instance industrial installations which are further apart and take longer to access. In particular meter reading on farms is most expensive due to the time and distance involved for a single reading.

 

CAPACITY CHARGE

The capacity charge is a fixed charge that has the purpose of covering all fixed costs related to the size of the particular type of power supply for small to medium power users (i.e. related to how much capacity is made available to the customer). It contributes towards

  • covering the capacity/demand charge from the CENORED’s supplier, NamPower
  • repair, maintenance and replacement of the electricity infrastructure which is made up of transformers, switchgear, system protection, cables and overhead lines and metering installations
  • covering the standing electrical losses of transformers
  • encouraging the customer to carefully consider the size of his/her installation.

The capacity charge is typically for smaller supplies and is proportional to the size of the tariff circuit breaker. CENORED does generally not prescribe capacity size to the customer, since the customer should have his/her own specialist such as an electrician or engineering consultant to assist. Under sizing will normally lead to nuisance tripping of on overload. Over sizing will increase the cost to the customer unnecessarily. It is therefore vitally important that the capacity asked for by the Client is correct for his/her needs.

 

DEMAND CHARGE

The demand charge is a partly variable charge (with a minimum amount based on 70% of the notified demand of the supply point) that has the purpose of covering all fixed costs related to the size of the particular type of power supply for large power users. It contributes towards

  • covering the capacity/demand charge from the CENORED’s supplier, NamPower
  • repair, maintenance and replacement of the electricity infrastructure which is made up of transformers, switchgear, system protection, cables and overhead lines and metering installations
  • covering the standing electrical losses of transformers
  • encouraging the customer to carefully consider the size of his/her installation.

Large power users are metered in kVA, referred to as the demand charge. As for the capacity charge, CENORED does generally not prescribe capacity size to the customer, since the customer should have his/her own specialist such as an electrician or engineering consultant to assist. Under sizing will normally lead to nuisance tripping of on overload. Over sizing will increase the cost to the customer unnecessarily. It is therefore vitally important that the capacity asked for by the Client is correct for his/her needs.

 

ENERGY CHARGE

The energy charge is a variable charge, depending on actual consumption, and has the purpose of covering at least all variable costs in the power supply system attributed towards the particular power supply. It contributes particularly towards

  • covering the energy charge from CENORED’s supplier NamPower
  • covering the Local Authority Surcharge, an amount which is payable to respective local authorities in lieu of operating income they derived when the electricity networks resorted under them.
  • encouraging the customer to carefully consider the consumption of energy

The energy charge is often used to cover some of the fixed cost. In the case of pre-payment meters, this is the case and covers both the capacity and service charges.

 

ECB LEVY

This is a levy payable directly to the Electricity Control Board (ECB) of Namibia. The ECB was established by law to regulate the electricity supply industry in Namibia. Amongst other functions, the ECB approves all electricity tariffs applicable in Namibia and licenses electricity distribution & supply.

 

GENERAL

At present CENORED is trying to simplify and harmonize tariffs in its license area. This process cannot be completed within a year. For instance local authority surcharges apply in certain areas and not in others.   Also, the various types of charges represent a mix of the above charges. As such CENORED is working with the ECB to harmonise tariffs over a period of time, typically 3 years.