Report by Bassam Abou Zeid, English adaptation by Karine Keuchkerian
Whatever electricity you consume at home, you have to pay for it, the more you consume, the more you pay. But when the generator bill arrives at the end of the month, consumers do not always know how it was calculated or why it increases from one month to the next.
How much does a kilowatt-hour cost? What is the fixed fee? And how much do rising diesel prices affect the bill?
A generator bill consists of the fixed fee, plus the number of kilowatt-hours consumed multiplied by the kilowatt-hour rate set by the Energy Ministry.
In August, the ministry set the kilowatt-hour rate in cities, densely populated areas, and regions below 700 meters at LBP 48,241, equivalent to 53 cents at an exchange rate of LBP 89,700 to the dollar.
The fixed fee is LBP 385,000 for a 5-amp subscription and LBP 685,000 for a 10-amp subscription.
How can consumers calculate their bills?
Let’s assume the meter reading at the beginning of the month was 1,250 and reached 1,400 by the end of the month.
Subtract the two readings: 1,400 minus 1,250.
That means the household consumed 150 kilowatt-hours during the month.
Multiply the 150 kilowatt-hours by the kilowatt-hour rate of LBP 48,241.
The result is LBP 7,236,150.
If the subscription is 5 amps, add the fixed fee of LBP 385,000.
The total bill would therefore be LBP 7,621,150, equivalent to $81.
If the subscription is 10 amps, add the corresponding fixed fee of LBP 685,000. The bill for the same amount of consumption would then be LBP 7,921,150, or $88.
The August increase in the kilowatt-hour rate was largely driven by rising diesel costs.
In July, the average price of a 20-liter canister of diesel used by the Energy Ministry to calculate generator rates was LBP 1,992,150.
In August, it rose to LBP 2,415,495.
That means an increase of more than LBP 423,000 per canister in a single month, or about 21%.
The increase was clearly reflected in the kilowatt-hour rate.
The kilowatt-hour rate in areas below 700 meters was LBP 40,746 in July and rose to LBP 48,241 in August.
That means an increase of LBP 7,495 per kilowatt-hour, or more than 18% in a single month.
To see what that increase means for consumers, let’s return to the example of a household that consumed 150 kilowatt-hours.
At the July rate, the cost of that consumption, including the fixed fee for a 5-amp subscription, was about LBP 6,497,000.
In August, for the same 150 kilowatt-hours and the same subscription, the bill rose to about LBP 7,621,000.
That is a difference of more than LBP 1.124 million, or $12.50, without the consumer using a single additional kilowatt-hour.
However, diesel prices are not the only factor driving the rate.
The Energy Ministry also takes into account the cost of transporting and distributing diesel, the dollar exchange rate, oil and filters, generator depreciation and fuel losses, operating costs, as well as the profit margin.
The fixed fee covers monthly costs that are not directly related to the amount of electricity consumed, such as workers, rent, and the distribution network.
There is also a difference depending on the region.
In villages, remote areas, and regions located above 700 meters, the ministry set the August rate at LBP 53,065 per kilowatt-hour, equivalent to 59 cents.
Using the same example, a household that consumed 150 kilowatt-hours and has a 5-amp subscription would receive a bill of LBP 8,344,750, or about $93.
Ultimately, for consumers to understand how their generator bill was calculated, they need to pay attention to three key figures: the amperage of the subscription, the amount of electricity recorded on the meter, and the official kilowatt-hour rate issued by the Energy Ministry each month.
Most importantly, a higher bill does not necessarily mean that the consumer used more electricity.
Between July and August, for example, the same 150 kilowatt-hours cost more than LBP 1 million more, with the fixed fee remaining unchanged.
The main reason in this case was the increase in the cost of diesel, which pushed up the kilowatt-hour rate and ultimately increased the consumer’s electricity bill.