ARMS Limited has five separate electricity tariffs bands with prices rising accordingly based on usage.
The bands are as follows:
0-2,000 units: 10.47c per unit.
2,001-6,000 units: 12.98c per unit.
6,001-10,000 units: 16.07c per unit.
10,001-20,000 units: 34.20c per unit.
Over 20,000 units: 60.76c per unit.
While these rates are for cumulative consumption over an entire year, ARMS instead splits the allocation for the different bands across the bills that the consumer receives during this period.
This means that if a residence is billed every two months, the first 2,000 units are divided between six bills, amounting to an allocation of 333 ‘cheap’ units per bill at 10.47c, 666 units at 12.98c and 666 units at 16.07c and so on.
If, for example, only 200 units are consumed in a two-month billing period, the remaining 133 ‘cheap’ units at 10.47c/unit are lost, as ARMS does not carry them over to the next bill.
How can this impact you?
Taking an extreme example, let’s say you are away for 10 months of the year and have turned off all your appliances, resulting in zero units being consumed.
Upon returning for the final two months of the year, you use up 2,000 units.
Going by the annual billing method, the 2,000 units you use in November and December should be charged at 10.47c per unit.
Your total bill for the year should be €209.4c (2,000 units multiplied by 10.47c). However, with the system ARMS uses, the 2,000 units used during the final two months will end up being billed as follows:
333 ‘cheap’ units @ 10.47c = €34.86.
666 units @ 12.98c = €86.44.
666 units @ 16.07c = €107.02.
335 units @ 34.20c = €114.57.
This leaves you with a total bill of €342.89, €133.49 more than if you had been able to use your 2,000 ‘cheap’ units across the entire year instead of pro-rata like ARMS bills them.
What about normal usage patterns?
Consumption tends to peak during the summer months and around the Christmas period.
This means you can end up being charged at higher rates simply because ‘cheap’ unused units would have been lost during periods of lower consumption.
A draft report by the Auditor General found variances of between €10.74 and €468.90 in ARMS pro-rata calculation of bills, when compared to the annual calculation method.
The Auditor General said these “extra charges” could be costing consumers €4.6 million on electricity bills. Water bills, which are calculated using different tariff bands, also varied by €1.9 million between the pro-rata billing used by ARMS and the annual method.
What have the government and opposition said?
Former prime minister Joseph Muscat had acknowledged in 2018 that “anomalies” existed in the ways ARMS was calculating bills. He had promised redress for the anomalies in 2019.
Since then, the billing method has remained unchanged and Robert Abela’s government has remained silent about the redress promised by his predecessor.
The Nationalist Party last week pounced up the Auditor General’s findings, seeing it as validation of its own overbilling claims.
Opposition leader Bernard Grech has promised to refund some €50 million “stolen” by the government since 2013 through this overbilling.