Electricity bill analysis
When sorted by purchasing parity, electricity, which is expensive in our country, is cheap when purchasing parity is not included in the calculation. This subject can have different results depending on the point of view. Therefore, let’s look at how we can minimize our electricity bill with what we have, rather than this issue. Starting to write, hoping that these lines will be an inclusive resource for the person who wants to do invoice analysis. Under the headings below, first explain the electricity bill and then explain how the optimization will be done.
2) Facility Types
3) Voltage Levels
5) Invoice Items
6) Supplier Types
7) Invoice Optimization
Accrual Multiplier: If the meter is at medium voltage level, it is the value obtained by multiplying the used current and voltage transformer coefficients. It is used for converting the consumption value read by the meter to real consumption.
Contract Power: It can also be expressed as agreement power. It corresponds to the contractual power of the facility in the connection agreement. Its unit is kW.
Rated Value: It is the highest power value instantly drawn by the facility during the billing period. It can be measured by installing meters measuring the nominal value instead of standard meters. Its unit is kW.
Eligible Consumer: It is the name given to the type of customer who supplies electricity with a special agreement.
National Tariff Consumer: It is the type of customer who purchases electricity at national tariff prices without any agreement.
Market Clearing Price (MCP): It is the hourly reference price determined in the day ahead market.
Renewable Energy Resources Support Mechanism (YEKDEM) Fee: It is the price created to support the plants with guaranteed generation. YEKDEM is announced monthly within the following 2 months.
Electricity Market Regulatory Authority (EMRA) Excels: Published on the EMRA website once every 3 months and 4 times a year. The national tariff, each of which I will mention under the title of “Invoice Items”, includes electricity prices, distribution costs, power charges and reactive penalties.
Energy Markets Management Inc. (EPİAŞ) Transparency Platform: It is the platform where PTF and YEKDEM fees are announced via web and mobile applications.
2) Facility Types
Electricity prices vary according to users. These types of users are as follows:
Residence: Houses and common areas of buildings are evaluated within this scope.
Industry: The producers operating in the organized industrial zone and the facilities located outside the organized industrial zone and having an “Industry registration certificate” are subject to industrial prices.
Business: Companies that do not have an “industrial registration certificate” are users of business premises. The companies’ office is subject to the business tariff even if it is a house.
Agricultural Irrigation: It includes real and legal persons who use electrical energy to irrigate agricultural lands.
General Lighting: It is the consumer who uses electricity to illuminate the areas used by the public.
Lighting: It is the type of user that uses electricity for the illumination of highways and customized access controlled highways.
3) Voltage Levels
It refers to the voltage level at which the meter is located.
LW: It is the type of facility to which the meter is connected at low voltage level.
MV: It is the type of facility to which the meter is connected at medium voltage level.
The point to be considered here is that the voltage level to which the facility is connected to the network and the voltage level to which the meter is connected may be different. For example, the facility is connected to the network from the MV level and the meter may be at the AG level.
In order to save money on the electricity bill, the tariff suitable for the facility should be found and it should be followed up regularly. There are 4 different tariff types: single term single term, single term thrice, double term single term and double term thrice.
Single Term: It is the standard tariff parameter. In single-term tariffs, the distribution fee is higher than the unit price and there is no power charge and power overrun fee that I will mention in the “Invoice Items” section.
Double Term: It is the modified tariff parameter. Distribution fee unit price is lower in these tariffs. These tariffs include power charges and excess power charges.
Single Time: It is the standard tariff parameter. In these tariffs, the electricity price is the same at all hours of the day.
Three Time: It is the modified tariff parameter. Electricity prices change in three different time periods of the day. These zones are between daytime (06.00-17.00), peak (17.00-22.00), night (22.00-06.00).
There are a few rules I would like to mention here. Switching between tariffs can be made three times a year. Customers powered by low voltage cannot use the binary tariff. Plants that use arc furnaces and destabilize the network are compulsorily subject to double-term tariff. Eligible consumers and lighting customers cannot use the three-time tariff.
5) Invoice Items
There are a lot of items in the electricity bill. Basic items have been reflected in the invoice as “Energy Price” and “Taxes” since 2016. But there are sub-breaks under these two terms. It is important to know what these sub-breakdowns are in order to make an accurate invoice analysis. Now I will explain what these items are.
Active Energy Cost: Refers to the raw electricity cost. It is basically obtained by multiplying the unit price of electricity and consumption. I will talk about how the electricity unit price is determined under the title of “Supplier Types”.
Distribution Fee: It can also be used as a system usage fee. It is the equivalent of the services provided during the process of electricity coming out of the producer and coming to you. The distribution price is obtained by multiplying the unit price and consumption. Distribution price unit price; It is available in the period excel published by EMRA for the facilities outside the OIZ, and in the word format document published by the EMRA for the OIZs in the facilities within the OIZ. The cost of loss and leakage is included in this item.
Power Price: It is the item obtained by multiplying the contract power and the power price unit price. This item is reflected only in double term tariffs.
Power Excess Cost: It is reflected if the nominal value exceeds the contractual power. It is obtained by multiplying the difference between the nominal value and the contract power by the unit price of the power exceeding price. This item is reflected only in dual term tariffs.
Reactive Penalty Fee: It is the penalty reflected only if the reactive rate limits are exceeded in facilities with a contract power of more than 9 kW. While the inductive penalty limit (Inductive consumption / Total consumption) is 20%, the capacitive penalty limit (Capacitive consumption / Total consumption) is 15%. Whichever of these limits is exceeded, it is obtained by multiplying the total reactive or inductive consumption by the reactive penalty unit price. If both limits are exceeded together, it is obtained by multiplying the more than the inductive or capacitive consumption by the reactive unit price.
Transformer Loss Coefficient: The loss in the transformer is reflected in this item in facilities that are connected to the network only from MV and whose counter is in LV. This amount is calculated according to the “Transformer Loss Coefficient Calculation Methodology”.
YEKDEM Difference Fee: If the facility is an eligible consumer, it is invoiced according to the YEKDEM estimate of that period in the invoicing period. After the announcement of the YEKDEM price of that period, the difference between the estimated and announced YEKDEM costs is added as plus or minus to the invoice of the month in which YEKDEM is announced. Different calculation methods are mentioned under the title of “Supplier Types”.
Energy Fund: Its rate is 1%. It is obtained by multiplying this ratio with the active cost.
TRT Share: There is no TRT share among industrial consumers. In other facilities, the rate is 2%. It is obtained by multiplying this ratio with the active cost.
Municipal Consumption Tax: It is also expressed as electricity and air gas. Facilities outside the municipal boundaries and adjacent areas and facilities serving the public such as hospitals and mosques are not subject to this tax. The rate for industrial consumers is 1%. In other facilities, the rate is 5%. It is obtained by multiplying this ratio with the active cost.
Value Added Tax (VAT): It is the tax type used to tax the final consumer. Its rate is 18%. It is obtained by multiplying the sum of all costs by this ratio.
Invoice Amount: Obtained as a result of adding up all costs.
6) Supplier Types
While the price of the electricity provided by electricity suppliers affects the active cost among the invoice items, it does not affect the distribution cost. Since it affects the active cost, it also affects all taxes.
There are two different ways to buy electricity in the electricity market. The first way is to become a national tariff customer and purchase electricity from the regional electricity retail company. The second way is to be a free consumer and to make special agreements with EPAŞ or supplier companies and purchase electricity. There are different pricing types within the second route. I will mention the most used of these below. The only difference between these ways is that the companies that issue the invoices change. It has no effect on physical infrastructure.
National Tariff: Standard is customer. The company that issued the invoice is the regional electricity retail company (EPAŞ). 1 time in 3 months by EMRA National Electricity tariff prices, including four times a year to all of Turkey is described to be the same price. In other words, electricity prices are fixed and the same in Edirne and Iğdır during January, February and March. You can find these prices on the EPDK website.
Eligible Consumer: It is the customer who makes bilateral agreements. The contracted company issues the invoice. This company can be an electricity distribution company, a company with a supplier license, or a company with a generation license. Companies with a supply license usually receive a letter of guarantee proportional to the current invoice amount prior to the deal. There are different models for billing as follows.
• Monthly PTF + Monthly YEKDEM + Commission: It is the unit price of electricity reached by adding the commission rates (around 2%) applied by the supplier company to the monthly PTF and YEKDEM fees announced. The active cost is obtained by multiplying the unit price by the monthly consumption.
• Hourly PTF + Monthly YEKDEM + Commission: Generally, the facilities located in the OIZ are invoiced by the OIZ management in this way. Hourly consumption is multiplied by hourly PTF. Monthly consumption is multiplied by YEKDEM and commission. The active cost is obtained by adding these two numbers.
• Fixed Price: It is the method of selling electricity at a fixed price by the supplier during the bilateral agreement agreement. The supplier company makes an estimate according to the past and current PTF and YEKDEM prices and sets a fixed price accordingly. The active cost is obtained by multiplying the unit price by the monthly consumption.
7) Invoice Optimization
It can be difficult to grasp the above terms all at once. I think it would be useful to go over it a little bit. Now I will give you an example of a standard facility invoice that can be optimized. Then we will optimize together. This facility receives electricity at national tariff and is billed from OG. Although the facility is an industrial enterprise, it is outside the OIZ and it is subject to the trade house tariff since it does not have an industrial registration certificate. It is connected to the network at medium voltage level and its meter is in MV. It is getting electricity at national tariff. Contract power is 378 kW and rated value is 190 kW. It is subject to a single term, one time tariff. It has a consumption of 100 MWh (100,000 kWh), a capacitive consumption of 20 MWh (20,000 kWh). The invoice for this facility for October 2020 is calculated as follows:
Invoice Items One. Price (krş / kWh) or Rate Amount
Active Energy Cost 57.555 ₺57,555
Distribution Fee 18.2267 ₺18,227
Reactive Penalty Fee 30.601 ₺6,120
Energy Fund 1% ₺576
TRT Share 2% ₺1,151
Municipal Tax 5% ₺2,878
VAT Base ₺86,506
VAT 18% ₺15,571
The electricity bill of this facility is quite suitable to be optimized. Optimization can be achieved by performing the following steps.
1) By making a bilateral agreement, electricity can be purchased with the price of PTF + YEKDEM + 2% Commission (423.2 TL in October 2020) and the active cost can be reduced.
2) Saving in distribution costs can be achieved by switching to the double term tariff and changing the contract power to 200 kW.
3) It can be ensured that the facility is subject to an industrial tariff by issuing an industrial registration certificate.
4) The reactive penalty can be reset by arranging the compensation system and making the capacitive consumption 10 MWh.
As a result of these transactions, the electricity bill of the facility is as follows:
Invoice Items One. Price (krş / kWh) or Rate Amount
Active Energy Cost 42.32 ₺42,320
Distribution Fee 9.38 ₺9,376
Power Cost 311.60 ₺623
Power Excess Cost 623.20 ₺0
Reactive Penalty Fee 30.601 ₺0
Energy Fund 1% ₺423
TRT Share 0% ₺0
Municipal Tax 1% ₺423
VAT Base ₺53,165
VAT 18% ₺9,570
Total $ 62,735
As you can see, we were able to save a huge amount. This facility was an example that could be optimized a lot. However, there are two suggestions for you to optimize invoice at any facility:
• Receive offers from different supplier companies and make an electricity purchase contract with one of the reliable ones using the PTF + YEKDEM + Commission model. Because when purchasing electricity with a fixed price, the profit margin will probably be higher because the supplier estimates the risk better than you. This will save you 15-20% compared to the national tariff.
• Switch to the double term tariff. You cannot use three-time tariffs because you have switched to bilateral agreements. Your tariff will be double term and single time. Save on distribution cost by changing the contract power during the year according to its nominal value. This will save you around 3-4% compared to the single term tariff.
Wish you sunny days!