Here’s a chart to prove that Konrad Mizzi is lying about percentages in those letters sent out abusively in ARMS envelopes
People have been ringing, emailing and posting comments here to talk about the letters they have received from Health and Energy Minister Konrad Mizzi, who has apparently now taken over the role of CEO of Enemalta, the Water Services Corporation and ARMS and is writing to customers about prices.
They follow the standard format of telling you that the tariff on electricity will be down by 25% and the tariff on water down by 5% but your projected discount will be (LARGE POINT SIZE HERE) 30%, 33%, 27%, 28%, 32% & c & c.
That is a mathematical impossibility. I explained it in a previous post using simple figures, and then immediately understood why the maths O-level failure rate in Malta is one of the highest in Europe as a bewildered stream of comments came through.
I’m one of those people who find numbers mind-numbing. I day-dreamed or read novels right through maths lessons and now zone out when people start talking numbers. But even I can understand at once that when you have one percentage discount on one lot of stuff and another percentage discount on another lot of stuff and then combine the two, the overall percentage has to be somewhere between the two percentages. It can NEVER be higher or lower. That’s impossible.
So let’s try again, this time with three different fictitious bills for the sake of comparison.
JOHN’S BILL
John has a water bill of Eur100 which is discounted by 5%.
His electricity bill is Eur100 too and it’s discounted by 25%.
What is John’s overall discount?
His bill for the two, without the discount, is Eur200.
His bill for the two, discounted, is Eur170 (100 – 5 = 95) + (100 – 25 = 75)
This is a saving of Eur30 on Eur200.
30 of 200 is 15%
John’s overall discount is 15%.
MARY’S BILL
Mary has a water bill of Eur500 which is discounted by 5%.
Her electricity bill is Eur1000 and is discounted by 25%.
What is Mary’s overall discount?
Her bill for the two, without the discount, is Eur1500.
Her bill for the two, discounted, is Eur1225 (500 – 25 = 475) + (1000 – 250 = 750)
This is a saving of Eur275 on Eur1500.
To work out the overall percentage discount, multiply the saving by 100 and divide the resultant figure by the non-discounted total. So, 100 x 275 = 27,000. Divide that by 1500 and you get 18.33.
Mary’s overall discount is 18.33%.
JANET’S BILL
Janet has a water bill of Eur1000 which is discounted by 5%.
Her electricity bill is Eur500 and is discounted by 25%.
What is Janet’s overall discount?
Her bill for the two, without the discount, is Eur1500.
Her bill for the two, discounted, is Eur1,325 (1000 – 50 = 950) + (500 – 125 = 375)
This is a saving of Eur175.
Let’s work out the overall percentage discount: 100 x 175 = 17,500. Divide that by 1500 and you get 11.67.
So Janet’s overall discount is 11.67%.
Try it with any number of computations and combinations of water and electricity figures, and even try different levels of discount just for the hell of it, and you will see for yourself that the overall percentage can NEVER be higher than the highest percentage discount you’re dealing with, which in this case is 25%.
Otherwise, for those who are more numerically inclined or who are of a scientific bent and whose teeth are set on edge by my Janet-and-John sums, the resident physicist on this website has produced what he calls the simple chart shown here. This is his explanation.
The total percentage discount varies according to two quantities: the water bill and the electricity bill. So you have a result which is a function of two variables.
I have shown this result as a contour plot. The x and y axes are self-explanatory. The lighter the shade on the plot, the greater the discount. The discount ranges from 5% to 25%, and that’s it. No 30% fairytales.
To find your percentage discount, you find the spot on the plot corresponding to your original water bill and electricity bill. The contour lines are at 1% intervals.
In order to convince the doubting Thomases, I have plotted the result for water or electricity bills from one millionth of a mil to one million euros.
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And you seriously think that the target population for those letters (aka the gullible lejbourites) are not mathematically challenged? La qed jghidilhom hekk Komrade Konrad, huwa vangelu!
So now we know how we’ll get 25% off our bills: bad maths and questionable marketing.
The letter I received shows that I will have a discount of 35%. I wish this was true, but as éverybody knows, it´s a fake.
I completely agree with you, the total savings can never exceed 25% and will always be significantly less.
Furthermore the actual saving will be even less than what you calculated as you left out a constant to the equation.
The Water and Electricity bill is made up of 2 variables and 1 constant (you used just 2 variables in your example.) These are, the cost of the water used, the cost of the electricity used and finally the rental of the meter (which is a fixed yearly cost of €65 per annum for single phase and €300 per annum for 3 phase.)
Therefore
John has a water bill of Eur1000 per annum which is discounted by 5%.
His electricity bill is Eur1000 per annum too and it’s discounted by 25%.
He pays €65 per annum for the meter
What is John’s overall discount?
His bill for the two, without the discount, is Eur2065.
His bill for the two, discounted, is Eur1765 (1000– 50 = 950) + (1000 – 250 = 750) + 65
This is a saving of Eur300 on Eur2065.
300 of 2065 is 14.52%
John’s overall discount is 14.52%.
(Discount would be 13% if john had a 3 phase electricity supply instead.)
Small correct. The service charge for 3-phase is €195 for residential.
Therefore John’s discount would be 13.67% if he had a 3-phase supply.
Dear Daphe, we believe in Joseph because Joseph believes in us. Why worry on the %s
it’s even worse. The discount is ONLY calculated on the CONSUMPTION, and not the total bill (which includes the consumption plus meter rent) .
Well, I think that the majority of the Maltese do not want to be fed a scientific and objective explanation, which goes against their beliefs, but rather stick to their unrealistic arguments fed to them by politicians.
A case in point is when I try to explain to the ill-informed that we are on the receiving end from the European Union, whilst their idea is that we pay huge amount of taxes to the EU and then we receive a fraction from what we pay in terms of EU aid.
Electricity prices are not all coming down by 25%.
The tariff for the first 2,000 units will be reduced by 35%. The tariff on usage of between 2,000 and 6,000 units will be reduced by 25% and the tariff on consumption of between 6,000 and 10,000 units will be reduced by 15%.
Then it’s not only the numbers on the letter that are wrong, but the whole concept behind the letter. Such a stupid letter.
Why didn’t the Minister just refer to the expected savings for the specific meter?
More specfically, why didn’t the Minister issue the bills?
I refer to my comment on your earlier post. Maybe the 30 something% includes the eco reduction which was introduced by the P.N. administration and which Konrad Mizzi is trying to pass as his own idea.
fanfuckingtastic – what a government.
I can’t believe one has to go to such lengths to explain elementary mathematical concepts that should be intuitive.
the formula is 0.25 X + 0.05 Y = Z (X+Y)
X being your electricity spend; Y your water spend and Z the actual overall percentage decrease over both your water and electricity spend. Z is the figure you are questioning.
Whilst your claim that Z cannot be greater than or equal to X+Y is in fact correct, in realistic terms the percentage decrease is far closer to the 25% mark than you portray it to be in your 3 examples – reason being that water spend is far far less than electricity spend for both domestic and commercial cases. For instance if my electricity bill is in the region of EUR 400 for a quarter, the spend on water throughout the same period would be around EU 60. That’s approximately 15% of my total spend. Whereas in the 3 examples you chose to give in your argument the water percentage of total spend are 100% (John), 50% (Mary) and 200% (Janet)…which is why your calculations have yielded an overall percentage that is further from the 25% mark than any realistic bill.
Therefore although the ’25 +5% is not equal to 30%’ claim is correct or a ‘fairytale’ as you call it – effective figures are not as far off as they are made to seem here.
I guess that 25% and 5% refers to the total amount by which the total energy and water expenditure in Malta is foreseen to be decreased due to tariffs´ review.
In fact, tariffs´ reduction is differentiated by consumption band and type of consumer.
For example a residential consumer staying within the consumption limit of 2MWh will pay 0,1365 Euro/kWh instead of 0,21 Euro/kWh.
It means a discount of 35%.
Depending on the Energy Bill – Water Bill mix, a 33% is possible (and someone could have subscribed only an energy contract for whatever reason – maybe the water is on his/her landlord or husband/wife – so in theory also 35% is possible).
You can find figures here:
http://www.enemalta.com.mt/index.aspx?cat=2&art=5&art1=9
http://www.enemalta.com.mt/enemaltastorage/images/files/miscellaneous/electricity%20tariffs%20applicable%20between%201st%20january%202010%20and%2030th%20march%202014.pdf
For example a residential consumer staying within the consumption limit of 2MWh will pay 0,1365 Euro/kWh instead of 0,21 Euro/kWh.
It means a discount of 35%.
Please note that within th elimit of 2MWh the consumer never paid at the rate of 21c per unit but at 16c per unit
Daphne, your calculations are correct.
However, you are assuming that the discount is linear. But in fact, it is not.
That for water is constant at 5%, whatever your consumption.
That for electricity varies from a minimum of 2% to a maximum of 35%, depending on your consumption. The more you consume, the less discount you get.
The advertised 25% discount on electricity bills is some sort of national average (you’ll have to ask them what they averaged).
And whatever the actual discount one is going to benefit from, that discount will still be partly neutralised.
What Konrad Mizzi failed to mention is that the Eco-reduction no longer features in the W&E bills.
What FP said, together with what chris and Mark Thorogood said. I believe that this time it is your calculations that are wrong Daphne.
It seems we’ve missed all a key word in Konrad Mizzi’s letter and some people are getting a discount of more than 25% on their electricity.
The letter says: “Electricity tariffs are being reduced by an AVERAGE of 25%.” The water discount is fixed at 5%.
That could explain the higher overall percentage we’ve been seeing in some cases.
Here are a couple of examples:
KERMIT’S BILL
Kermit has a water bill of Eur100 which is discounted by 5%.
His electricity bill is Eur250 and is discounted by 40%.
What is Kermit’s overall discount?
His bill for the two, without the discount, is Eur350.
His bill for the two, discounted, is Eur245 (100 – 5 = 95) + (250 – 100 = 150)
This is a saving of Eur105 on Eur350.
105 of 350 is 30%
Kermit’s overall discount is 30%.
MISS PIGGY’S BILL
Miss Piggy has a water bill of Eur50 which is discounted by 5%.
Her electricity bill is Eur250 and is discounted by 35%.
What is Miss Piggy’s overall discount?
Her bill for the two, without the discount, is Eur300.
Her bill for the two, discounted, is Eur210 (50 – 2.50 = 47.50) + (250 – 87.50 = 162.50)
This is a saving of Eur90 on Eur300.
90 of 300 is 30%
Miss Piggy’s overall discount is 30%.
Good job Konrad didn’t reduce both bills by 50%
The base data is incorrect. The discount on water is fixed at 5% but that on electricity units can go up by up to 35% depending on usage. Suggest you visit https://mita.gov.mt/billsavings and use the available online calculator for a better explanation.
But your reasoning about the mix on percentages and that the end result can’t be more than the greater of the two is correct.
The mix in the letters sent is between 5% and 35% and not between 5% and 25%. The 25% mentioned in the letter is the forecast national average saving for families while the 5% for water is fixed across.
Next question: Now that Joseph Muscat has also LIED about the reduction in tariffs, on top of everything else, and the reductions as promised or mislead haven’t happened, when is his resignation going to be tendered?
Have the bills been issued?
Konrad, we need to see the bills.
I got a similar letter stating that the utility bills of a vacant property I own will be cut by 35%.
The letter claims that the calculation is based on past consumption.
Since my consumption has been nil for a few years, the percentage is clearly misleading unless they intend also cutting the fixed service charge for the meters.
Assuming that the first band of electricity consumption quota is what is needed for decent comfort, discounts are to be politically interpreted on only that band (which is supposedly deemed to cater for basic needs).
Over and above the first band caters for consumers opting for extra comforts who anyway can afford, enjoying bigger discounts.
And the minister of education has just declared a 10% discount on school uniforms.
Is this made up from a 2% reduction on five different pieces in the uniform?
2% on shoes, 2% on shirt, 2% on trousers or skirt, 2%on ties, 2% on jackets.
The total according to progressive mathematics is 10%.
DCG: Your mathematical reasoning on percentages is, of course, correct.
This reminds me of the celebrated novel “Fontamara” by Ignazio Silone where the poor peasants of Fontamara, Sicily, at the time of the fascist “ventennio”, are tricked by the secretary of the “comune”, in league with the rich landowner who wanted to deviate a watercourse for his advantage to the detriment of the peasants who had been using the water for generations and on which they depended for their livelihood.
The secretary decides that two thirds of the water should go to the landowner — impresario — and two thirds of the rest to the peasants.
The secretary told the latter that two thirds is more than half and they and the landowner were both getting two thirds.
An arrangement advantageous to all, says he. The naïve peasants accept the deal, happy that they would get two thirds which is more than half, and only discover they were deceived.when the water coming to their land has diminished dramatically.
In plain simple Maltese, the higher your consumption the more you are punished for you get a lesser percentage. The less you consume the higher the average works out to be. But then a high percentage of a small number gives small results and savings turn to peanuts.
I have worked out my projected electricity consumption (an average of 12 units per day=4433 units per annum) and applied the old rates against the new rates and the reduction is 29% (works out to about 60 cents less per day or if I smoked, that’s the price of three cigarettes).
So I cannot agree with your conclusion in my own case and for others like me. I am assuming that the new rates on my bill are correct and will not change sometime after 24th May. And I am assuming I am good at maths.
What irks me is that this government is refusing to acknowledge that the BWSC plant commissioned a few months during the previous administration has saved some 50 million Euros per annum due to its modern levels of efficiency.
That is why I credit the previous administration with these savings. Muscat has simply written out the cheque.
Four more years of savings amounts to roughly what we got from selling part of Enemalta to Beijing. Considering that the interconnector is around the corner, it was a silly thing to sell Enemalta off to a foreign dictatorship.
The letter I received informed me that for the same consumption I should expect a 23% reduction.
If my consumption remains the same and the reduction I get is not 23%, which I very much suspect will happen, would I have right to insist on a discount of 23%?
The percentage reduction will be even less. 5% and 25% reduction is on the unit price. There will be no reduction on the meters.
I have worked my last bill which I received on the 30th April. Yesterday I was informed that my discount would be of 31%.
What they did not say, and all of you have missed is the fact that the 31% or whatever discount is being mentioned include the ECO discount.
So in reality the discount being given is the difference between the variable eco reduction and the presumed discount that we will see on the bill. My real net discount worked on real cosumption and the advertised net rates published work out at 9.97% on electricity and if you include the metre charge, which has not been changed as yet, this discount works out at 8.6%.
I worked also my water bill and the saving is 2.73% on consumption and if I factor in the meter charge for the period this discount goes down to 2%.
My total bill worked on the new rates show a total overall discount of 8.45%. If I remove the meter charges the consumption discount is 10.23%. This reflects a daily discount of just 17 cents (or the old 7 cents) per day.
Simple maths show that if the pre 31st March 2014 cost per unit was 16.1 cents per unit, the discounted price at 25% was 12.08cents per unit.
If you were to just get this figure and give a discount of a further 25% the price would work out at 9.06 cents, which price is even less than the price that Electrogas will be charging per unit of 9.67 cents.
Under the last government, my water and electricity bill showed a 25% eco-reduction (discount) on a regular basis.
Why are we being treated like a bunch of fools and the PN does not expose these type of gimmicks?
I used the calculator provided on the website energy.gov.mt and got a 15% reduction instead of the 24% reduction Konrad promised in the letter he sent me.
But I expected this even the first time that they had announced it since the reduction was going to be on the units used and not on the total bill, therefore no reduction for the service charges, and apart from that they had said that the reduction will be according the amounts used but the PL did not put an emphasis on this and emphasised that there will be a 25% reduction in electricity and 5% in the water bill.
Your maths is right however I thought Konnie promised an average of 25%. This means that I can get a discount of 28% on electricity and 3% on water.
So basically, Konnie tal-Gass is not telling us how much we are saving on electricity and water separately but he combined the figures together. Why? To make it sound more appealing to the masses.
Daphne I guess your workings are incorrect.
You have to deduct the meter charge first for both water & electricity before working out the percentages.
When you do so and work out the 5% decrease on water and 25% on electricity you will find that the actual percentages against your workings are MUCH LESS.
[Daphne – Those were illustrations of how percentages work when averaged out. So the meter charge is absolutely irrelevant.]
My father received TWO of these ‘discount letters’. One stated 33% and the other 28%.
Will he be saving 61% ?
Daphne your working percentages are 100% correct. What happened is that who formulated the letter did not know what he is doing and is misleading everyone. The reason is that the water 5% is stable and for everyone. What flows is the electricity and that can go higher or lower depend consuming. So the final percentage as shown on the letter should be taken for the electricity.