Understanding Incline Block Tariffs (IBTs)
Incline Block Tariffs (IBTs) are specific tariffs electricity and water consumers are charged based on usage. Essentially, it means “the more you use, the more you pay”. Say whaaaat? It sounds way more sinister than it actually is, so let’s take a few steps back.
Once upon a time, electricity was abundant. But then, the world learned about global warming and the role fossil fuels have to play in it. Now electricity carries carbon taxes and we are all encouraged to use less of it.
As a result, Eskom introduced Incline Block Tariffs (IBT) and the National Energy Regulator of SA (NERSA) approved it.
What is Incline Block Tariffs (IBTs)?
IBTs divide the price of electricity into several different blocks, which are each determined by a specific set of usage per month.
For example:
- Block 1 — 50 units and under,
- Block 2 — 51 to 350 units,
- Block 3 — 351- 600 units, and so on and so forth
Once your first 50 units of electricity run out and you purchase more during the course of a specific month, you’ll be priced according to Block 2 for the next 300 units. And after that, you’ll be charged according to Block 3 for the following i.e. 200 units purchased in excess of those initial 350 units you purchased since the 1st of that particular month. This process repeats automatically throughout the month and based on your consumption history for that month, your IBT rate is applied.
At the end of the month, the history is reset and you’ll start at Block 1 in the new month.What if I bought 350 units at the beginning of one month but only used 50?
If you are using a traditional prepaid token system: The system is automatic and because the history is reset at the end of each month it won’t save you money to buy in bulk. You will end up paying more for electricity this way even though you are using less of it.
If you are using a MyVoltage smart prepaid meter: MyVoltage is the only system where you get billed on a daily basis. This way we ensure you pay as little as possible for your electricity. As you use electricity or water, the funds deposited in your smart wallet will be deducted.
What’s the goal of IBTs?
The goal is to support low-income and low usage domestic users and protect them against high price increases. Higher consumption customers are “penalised” with higher charges based on their usage. So, if you are conscious about your consumption, you can save more by using less.
It is important to note that MyVoltage does not determine these tariffs — they are determined by The National Energy Regulator of South Africa, and implemented by the local municipalities in their by-laws.
Isn’t this just a money-making scheme?
Guess you are thinking this tariff system is unique to South Africa and our Eskom-related electricity challenges? Nope! Actually, other countries like Australia are also implementing block rates because they too want to encourage conscientious electricity usage and support lower-income groups.
How can IBTs work in my favour?
Luckily, MyVoltage can help you with this because we don’t assume – we are sure! And we, therefore, ensure that you are able to obtain real-time insights into your monthly electricity usage so that you get the best possible rate.
With MyVoltage, the billing is performed on a daily basis, thus providing you with the correct tariff for the block in which you are currently consuming electricity. By knowing how you are spending electricity monthly and saving where possible, we can help you keep costs down.
It is important to realise that with TRADITIONAL prepaid meters, IBTs are automatic and the “next” block price will kick in once you buy over a certain amount of units in a particular month. It doesn’t matter if you buy it in one transaction or multiple transactions, or at which times you consume the actual electricity.
Due to our real-time and correct billing system, a MyVoltage’s Smart Meter will therefore always give you the lowest possible electricity rate.
Understanding Incline Block Tariffs (IBTs)
Incline Block Tariffs (IBTs) are specific tariffs electricity and water consumers are charged based on usage. Essentially, it means “the more you use, the more you pay”. Say whaaaat? It sounds way more sinister than it actually is, so let’s take a few steps back.
Once upon a time, electricity was abundant. But then, the world learned about global warming and the role fossil fuels have to play in it. Now electricity carries carbon taxes and we are all encouraged to use less of it.
As a result, Eskom introduced Incline Block Tariffs (IBT) and the National Energy Regulator of SA (NERSA) approved it.
What is Incline Block Tariffs (IBTs)?
IBTs divide the price of electricity into several different blocks, which are each determined by a specific set of usage per month.
For example:
- Block 1 — 50 units and under,
- Block 2 — 51 to 350 units,
- Block 3 — 351- 600 units, and so on and so forth
Once your first 50 units of electricity run out and you purchase more during the course of a specific month, you’ll be priced according to Block 2 for the next 300 units. And after that, you’ll be charged according to Block 3 for the following i.e. 200 units purchased in excess of those initial 350 units you purchased since the 1st of that particular month. This process repeats automatically throughout the month and based on your consumption history for that month, your IBT rate is applied.
At the end of the month, the history is reset and you’ll start at Block 1 in the new month.What if I bought 350 units at the beginning of one month but only used 50?
If you are using a traditional prepaid token system: The system is automatic and because the history is reset at the end of each month it won’t save you money to buy in bulk. You will end up paying more for electricity this way even though you are using less of it.
If you are using a MyVoltage smart prepaid meter: MyVoltage is the only system where you get billed on a daily basis. This way we ensure you pay as little as possible for your electricity. As you use electricity or water, the funds deposited in your smart wallet will be deducted.
What’s the goal of IBTs?
The goal is to support low-income and low usage domestic users and protect them against high price increases. Higher consumption customers are “penalised” with higher charges based on their usage. So, if you are conscious about your consumption, you can save more by using less.
It is important to note that MyVoltage does not determine these tariffs — they are determined by The National Energy Regulator of South Africa, and implemented by the local municipalities in their by-laws.
Isn’t this just a money-making scheme?
Guess you are thinking this tariff system is unique to South Africa and our Eskom-related electricity challenges? Nope! Actually, other countries like Australia are also implementing block rates because they too want to encourage conscientious electricity usage and support lower-income groups.
How can IBTs work in my favour?
Luckily, MyVoltage can help you with this because we don’t assume – we are sure! And we, therefore, ensure that you are able to obtain real-time insights into your monthly electricity usage so that you get the best possible rate.
With MyVoltage, the billing is performed on a daily basis, thus providing you with the correct tariff for the block in which you are currently consuming electricity. By knowing how you are spending electricity monthly and saving where possible, we can help you keep costs down.
It is important to realise that with TRADITIONAL prepaid meters, IBTs are automatic and the “next” block price will kick in once you buy over a certain amount of units in a particular month. It doesn’t matter if you buy it in one transaction or multiple transactions, or at which times you consume the actual electricity.
Due to our real-time and correct billing system, a MyVoltage’s Smart Meter will therefore always give you the lowest possible electricity rate.
