Pioneer Foods tariff programme worth R13,185,722.00 by 2021.

Augos reviewed every Pioneer Foods site after every tariff revision and had seven tariffs optimised and changed by early 2021. By Augos's calculation, the first round of changes saved R5,666,423.00 excl VAT in its first 12 months, and the cumulative value of the programme from inception to the end of 2021 was R13,185,722.00 excl VAT.

What was the situation?

Pioneer Foods, now part of PepsiCo South Africa, runs food manufacturing sites in several parts of South Africa. Each site sits on a tariff chosen at some point in its history, and every year the utilities revise their rates and sometimes their tariff structures. A tariff that was the cheapest option when it was chosen does not stay the cheapest by default.

The relationship goes back a long way. Augos's first Pioneer Foods site was Pronutro in Wadeville, metered from December 2009.

What did Augos do?

Augos treated tariffs as a recurring review, not a one-off project. After every tariff revision, all Pioneer Foods sites were reviewed. Augos tariff comparison prices a site's measured interval data against every Eskom and municipal tariff it qualifies for, using the South African electricity tariff database Augos has maintained for 18 years.

The first round of changes was implemented in late 2019. Each recommendation was modelled on the site's preceding 12 months of energy data, so the comparison reflected how the site actually ran across a full year. Results were reported from January 2020. A second round of changes followed in 2021.

Augos manages tariff applications with the utility on the client's behalf, as its appointed representative.

Which sites changed tariff?

Seven tariffs had been optimised and changed by early 2021. The programme note to Pioneer Foods records the effective tariff reduction at each site, based on the tariffs current at the time:

Site	Effective tariff reduction (programme note)
Mokopane	16.37%
Enterprise	15.74%
Epping Rice and Oats	13.15%
Breakfast Cereals, Atlantis	10.10%
Wellingtons, Atlantis	9.76%
Duens	9.04%
Weetbix, Atlantis	7.84%

These are the reductions recorded for these sites on the tariffs of the day. They are not a figure any other site should expect: the result depends on the site's load profile, its supply and the tariffs open to it.

The result and how it was calculated

All figures are Augos calculations, excl VAT, from the programme note.

• 2020: R5,666,423.00. The savings from the first round of changes, counting only the first 12 months after each implementation.
• 2021 round: R1,852,876.00. The saving from the 2021 changes, projected in the note to 31 December 2021.
• Cumulative to end 2021: R13,185,722.00. A two-year running total: the first round's savings counted in both 2020 and 2021, plus the first year of the 2021 round.

The method is deliberately conservative on the first figure: each change is credited with its first 12 months only, so the 2020 number does not include any saving beyond that window.

Why does a repeat review matter?

Because tariffs move. Rates change every year, utilities restructure or rename tariffs, and the way a site uses electricity changes with new lines, shifts or closures. A review after each revision catches the sites where the best option has changed. The Continental Beverages site in Bloemfontein and the Estcourt Mill are later examples from the same relationship, where a change in how the site operated made a tariff or demand change worthwhile.

What to check on your own sites

• When was each site's tariff last compared against the alternatives, and was it after the latest tariff revision?
• Is the comparison based on 12 months of measured interval data, or on a few bills?
• Does the comparison include energy, demand, network access and fixed charges, not only the energy rate?
• Has anything changed at the site since the tariff was chosen: shifts, production lines, solar PV, a closure?
• Is the notified maximum demand still right for the load?

Tariff analysis and bill verification are core to what Augos does. See how tariff optimisation works, or read how electricity tariffs work. To review your own sites, book a demo or call 087 093 6174.