How to reduce notified maximum demand: Eskom and municipal guide

To reduce notified maximum demand (NMD), the account holder applies to Eskom or the municipality for a lower supply capacity, accepts the utility's quote and terms, pays any fees and deposit adjustment, and signs a new supply agreement. Capacity-based charges follow the NMD on that agreement, not the demand a site actually draws, so a site that has shrunk keeps paying for capacity it no longer uses until it applies. The process is simple on paper and slow in practice, and the change is only real once a bill shows the new NMD.

What is notified maximum demand, and why does it cost money?

NMD is the capacity, in kVA, that a site has agreed with its utility. The utility keeps that capacity available, and charges that are calculated per kVA of capacity follow the NMD. When a site closes a line, stops production or loses a tenant, its measured demand falls but those capacity charges do not. Nothing changes automatically: rezoning or a change of use does not move a site's tariff or capacity. The customer has to apply.

When should you consider an NMD reduction?

Consider a reduction when your measured demand has sat well below your NMD for a sustained period and is expected to stay there. Typical triggers are a plant closing or downsizing, production moving to another site, a building changing use, or a supply whose NMD was set for a load that never arrived. Augos bases its recommended NMD on the site's measured demand, so the new figure reflects how the site actually runs.

Sometimes a lower NMD is not the best answer. A different tariff, one that does not carry capacity charges at all, can be worth more. The Continental Beverages case below is an example.

How do you reduce NMD with Eskom?

The steps Augos has followed on Eskom supplies are:

1. NMD restatement report. Augos analyses the measured demand and recommends a new NMD and, where it fits, a new tariff.
2. Application. The client applies to Eskom with a letter naming Augos as its representative.
3. Budget quote. Eskom issues a budget quote for the new NMD and tariff.
4. Acceptance. The client accepts the quote.
5. Payment. The client pays the conversion fee and any increase in the security deposit.
6. Supply agreement. The client signs a new electricity supply agreement.
7. Metering change, if needed. Some tariff moves need new metering before billing can change.
8. First bill at the new NMD. The change is confirmed when the bill shows it.

What costs should you budget for?

Budget for three things. First, a conversion fee: on Sidewinder Dry Ice and Gas's Eskom supply it was R1,230.43 excl VAT. Second, a possible security deposit increase: on the same supply the deposit was recalculated upward as part of the change, even though the NMD went down. Third, commitment: the new NMD carried a minimum liability period of 12 months. Where new metering is needed, that adds time before the first bill at the new NMD.

How does it work with a municipality?

Municipal NMD reductions follow the same logic: a written request on the client's behalf, confirmation from the municipality, and a first bill at the new capacity. Some municipalities apply changes from a set date. At Pioneer Foods' Estcourt mill, the municipality confirmed the change would take effect from 1 July 2025, the date its new tariffs took effect.

Real cases

Sidewinder Dry Ice and Gas, Blackheath, Cape Town (Eskom). The main supply had an NMD of 300 kVA on Miniflex. Augos's NMD restatement report of September 2025 recommended 175 kVA, with a projected saving of R6,708.75 a month, R80,505 a year. The client applied in September/October 2025. Eskom issued a budget quote on 4 May 2026 for 175 kVA on Miniflex, and the client accepted and signed the electricity supply agreement on 22 June 2026. The change is approved but awaiting Eskom's next billing run: the September 2026 bill was still at 300 kVA.

Sidewinder Property Holdings, Blackheath (Eskom tenant supply). This supply had an NMD of 140 kVA on Miniflex Interval with very low demand. The move is to 100 kVA on Eskom Businessrate 3, which needs new metering. Eskom quoted in June 2026 and the client accepted on 22 June 2026. Augos projects R85,268 a year. Installation and billing are pending.

Pioneer Foods Estcourt Mill (Inkosi Langalibalele Local Municipality, KwaZulu-Natal). With the plant shutting at the end of May 2025, Augos requested a reduction of the NMD from 1,500 kVA to 250 kVA on the client's behalf. The site was on Scale 7 (Industrial TOU) with a demand rate of R170.96 per kVA on its bills. In an email of 23 May 2025 the municipality noted the reduction, effective 1 July 2025. On June 2025 consumption, Augos calculated charges of R445,309.23 at 1,500 kVA against R231,609.23 at 250 kVA, a monthly saving of R213,700.00 (ex VAT). The difference is the demand charge on 1,250 kVA at R170.96 per kVA. Read the Estcourt case study.

Pioneer Foods Continental Beverages Factory B, Bloemfontein (Centlec). Production stopped at the end of October 2024 and the site became a warehouse with a refrigeration-led load. Instead of only cutting capacity, the client applied in December 2024, with Augos managing the application, to move from Centlec's TOU Elecflex 3 to Commflex, Centlec's business time-of-use tariff, which carries no demand charge or network access charge. The change took effect on 1 August 2025. On August 2025 consumption, Augos calculated R83,352.72 on Elecflex 3 against R22,848.25 on Commflex, R60,504.47 a month (ex VAT). Of the charges Commflex does not carry, R49,352.79 was the network access charge (474.82 kVA at R103.94) and R13,461.18 the demand charge, partly offset by Commflex's higher energy rates per kWh. Read the Continental Beverages case study.

What to check before you apply

• Your current NMD. Find it on your bill or supply agreement.
• Your measured demand. Look at at least a year of half-hourly demand, including seasonal peaks, before choosing a new figure.
• Future plans. Allow for expansions, new equipment or tenants. The new NMD carries a minimum liability period, 12 months on the Eskom supplies above.
• Tariff alternatives. Check whether a tariff without capacity charges, or a different tariff for the lower capacity, is worth more than the reduction alone.
• Metering. Confirm whether the new tariff needs a meter change.
• Cash. Budget for the conversion fee and a possible deposit increase.
• The first bill. Confirm the new NMD is billed. Approval is not the same as a billed change.

Augos has maintained a South African electricity tariff database for 18 years and manages NMD and tariff applications with Eskom and municipalities as the client's appointed representative. Read more about tariff optimisation.

To check whether your site is paying for capacity it does not use, book a demo or call Augos on 087 093 6174.