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Understanding Water and Electricity Tariffs

Apr 23, 2025

Tariffs: Water and Electricity

Introduction

  • Focus: Understanding tariffs for water and electricity.
  • Importance: Example at the end is from an exam question and is crucial for understanding.

Understanding Tariffs

  • Definition: Different pricing for different usage categories.
  • Example: Water tariff calculations.

Water Tariffs

Measurement and Pricing

  • Unit: Kiloliter (1 kiloliter = 1000 liters)
  • Pricing: Given per kiloliter.
  • VAT Consideration: Excludes or includes VAT; lesson assumes 15% VAT.

Example Problems

  1. C Port's Usage:

    • Usage: 33 kiloliters
    • Calculation:
      • 0-9 kiloliters: 9 × 9.50 = 85.50
      • 10-25 kiloliters: 16 × 11.22 = 179.52
      • 26-30 kiloliters: 5 × 14.95 = 74.75
      • 31-33 kiloliters: 3 × 23.05 = 69.15
    • Total: 408.92 Rand (VAT exclusive)
  2. Megan's Usage:

    • Usage: 29 kiloliters
    • Calculation:
      • 0-9 kiloliters: 9 × 9.50 = 85.50
      • 10-25 kiloliters: 16 × 11.22 = 179.52
      • 26-29 kiloliters: 4 × 14.95 = 59.80
    • Subtotal: 324.82 Rand
    • Including VAT: 324.82 × 1.15 = 373.54 Rand
  3. Lerato's Usage:

    • Usage: 51 kiloliters
    • Calculation:
      • 0-9 kiloliters: 9 × 9.50 = 85.50
      • 10-25 kiloliters: 16 × 11.22 = 179.52
      • 26-30 kiloliters: 5 × 14.95 = 74.75
      • 31-45 kiloliters: 15 × 23.05 = 345.75
      • 46-51 kiloliters: 6 × 25.36 = 152.16
    • Subtotal: 837.68 Rand
    • Including VAT: 837.68 × 1.15 = 963.33 Rand

Electricity Tariffs

Measurement and Pricing

  • Unit: Kilowatt hours
  • Pricing: Cents per kilowatt hour
  • VAT Consideration: Includes or excludes VAT

Example Problems

  1. Filler's Usage:

    • Usage: 170 kWh
    • Calculation:
      • 0-120 kWh: 120 × 112 = 13,440 cents
      • 121-170 kWh: 50 × 135 = 6,750 cents
    • Total: 20,190 cents = 201.90 Rand (VAT not altered)
  2. Bang's Usage:

    • Usage: 238 kWh
    • Calculation:
      • 0-120 kWh: 120 × 112 = 13,440
      • 121-180 kWh: 60 × 135 = 8,100
      • 181-238 kWh: 58 × 148 = 8,584
    • Subtotal: 301.24 Rand
    • Including VAT: 301.24 × 1.15 = 346.43 Rand
  3. Anton’s Usage:

    • Usage: 302 kWh
    • Calculation:
      • 0-120 kWh: 120 × 112 = 13,440
      • 121-180 kWh: 60 × 135 = 8,100
      • 181-250 kWh: 70 × 148 = 10,360
      • 251-302 kWh: 52 × 185 = 9,620
    • Subtotal: 415.20 Rand
    • Including VAT: 415.20 × 1.15 = 477.48 Rand

Special Exam Question

  • VAT 14%: Uses older VAT rate
  • Water Tariff:
    • Categories and rates given differently, with Rand per kiloliter
    • Example: Thomas uses 10 kiloliters
    • Calculation involves understanding usage per category and adding VAT

Steps

  1. Calculate Usage in Categories: 6 kiloliters in first, 4 in second
  2. Cost Calculation:
    • First category: 6 × 11.91 = 71.50
    • Second category: 4 × 12.15 = 48.61
    • Total (without VAT): 120.11
  3. Add VAT: Multiply by 1.14 to include VAT, result is 136.93 Rand

Conclusion

  • Key Learning: Understand how tariffs are structured and how to calculate total usage costs including VAT adjustments.
  • Application: Essential for exams and real-life situations where such tariffs apply.