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ELECTRICITY & COGENERATION REGULATORY AUTHORITY
Kingdom of Saudi Arabia
ACTIVITIES AND ACHIEVEMENTSVITIES AND CHIEVEME
OF THE AUTHORITY
IN 2014
October 2015
Our Mission
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To insure that supplies of electricity and desalinated water products provided to consumers in the Kingdom are:
AdequateReliableOf high quality, andFairly priced.
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© Electricity & Cogeneration Regulatory Authority King Fahd Library Indexing During Publication
Electricity & Cogeneration Regulatory Anuthority 2014 Activities and Achievements Report 2015 - Riyadh 297x210mmREDMEC 1658-3523
1. Electricity & Cogeneration Regulatory Authority-Reports-Saudi Arabia AZ
2. Dewey 1428-2329
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ACTIVITIES AND ACHIEVEMENTS
OF THE AUTHORITY IN 2014
October 2015
Kingdom of Saudi Arabia
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TABLE OF CONTENTS
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Subject Page
SUMMARY OF THE REPORT
Chapter 1 : THE SECTOR AND THE INDUSTRY
Chapter 2 : OVERVIEW OF THE AUTHORITY
Chapter 1 : CONSUMER CARE
Chapter 2 : SERVICE PROVIDERS AFFAIRS
Chapter 3 : TARIFFS
Chapter 4 : LAWS AND REGULATIONS
PART IGENERAL BACKGROUND
PART IIACTIVITIES AND ACHIEVEMENTS OF THE AUTHORITY
IN 2014
1-1 The Electricity and Water Desalination Sector
1-2 The Electricity and Water Desalination Industry
2-1 The Authority’s Goals and Remit2-2 Organizational Structure of the Authority
1-1 Publishing the Updated Edition of the "Provision of Electricity Service Manual"
1-2 Field Visits to Facilities of a Service Provider
1-3 Review and Handling of Consumers Complaints
2-1 Electricity and Water Desalination Industry Incidents2-2 Transgressions Against Service Providers Facilities
3-1 Implementation of the Power Factor Improvements Incentives
4-1 Project to Update the Electricity Law
4-2 Publication of the Updated Edition of the “Provision of Electricity Service Manual”
4-2-1 Reducing the Period for Connecting New Service
4-2-2 Changing the Billing Mode of Small Value Bills
3-2 Review of Capital and Operational Expenses of the Saudi Electricity Company (SEC)
3-3 Review of Costs of the Saline Water Conversion Corporation (SWCC)
3-4 Computation of the Income Requirements of the Power and Water Utility Company for Jubail and Yanbu (MARAFIQ)
1-2-1 The Electricity Industry
1-2-2 The Water Desalination Industry
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Subject Page
Chapter 5 : LICENSING
Chapter 6 : ELECTRICITY AND WATER DESALINATION PLANS
Chapter 7 : SERVICE QUALITY AND PERFORMANCE MONITORING
4-2-3 Connection and Consumption Agreements
4-2-4 Updating the Rules for Recording Consumption and Collecting Debts
4-2-5 Adoption of New Circuit Breaker Capacity Standards
4-2-7 The Estimated Bill
4-3 Preparation of a Framework for Regulation of Electricity Generation and Desalinated Water Production Using Atomic and Renewable Energy
4-2-8 Serving Consumers who Have a Critical Need for Electricity
4-5 Water Desalination Regulation
4-6 Code Supervision Committees:4-6-1 The Saudi Transmission Code
4-6-2 The Saudi Distribution Code4-6-3 The Water Desalination Code
5-1 Permits
5-2 Licenses5-3 Exemptions from Licensing5-4 License Forms for New Activities
6-1 Implementation of the Electricity Industry Restructuring Plan
6-3 Study of Water and Electricity End Use Patterns6-4 Study of the Technologies of Combined Heat and Electricity Production
6-5 Study to Develop a Roadmap to Establish a Competitive Electricity Market
7-1 Auditing Licensees’ Performance KPIs
7-2 Plan for Enhancing Reliability of the Electricity Network
7-3 Review and Development of the Major Performance KPIs in the Kingdom
7-4 Strategy for Smart Meters and Smart Grids in the Kingdom
6-2 Long Term Plan for Water Desalination and Electricity Generation Projects, and Determination of their Fuel Needs
4-2-9 Tampering with the Electricity Meters
Commercial Purposes
4-2-10 Rights of Way of Transmission Lines and Safe Distances Around Distribution Networks
4-2-6 Electricity Service Connection to Buildings Located Outside Planned Areas or Outside Network Coverage Areas
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PART IIIREPORT OF THE ELECTRICITY INDUSTRY DISPUTE RESOLUTION
COMMITTEE
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Chapter 8 : PUBLIC RELATIONS AND INFORMATION
Chapter 9 : HUMAN RESOURCES AND FINANCIAL AFFAIRS
Chapter 10 : e-BUSINESS AND IT
Chapter 11 : OTHER ACTIVITIES
Chapter 1 : GENERAL BACKGROUND
Chapter 2 : ACTIVITIES OF THE COMMITTEE
8-1 Second Publicity Campaign to Inform Consumers of their Rights and Responsibilities8-2 The Electronic Bill Pamphlet
8-3 Social Media Sites and the Internet
8-4 The Electricity Industry Statistical Yearbook8-5 Participation in Exhibitions that are Held Concurrently with Other Activities8-6 Media Interviews
9-1 The Work Environment9-2 Training and Scholarships9-3 Human Resources Development Project9-4 ECRA’s Budget9-5 The General Reserve
10-1 IT Plan and Restructuring 10-2 e-Business Development10-3 ECRA’s Website and Portal project10-4 Business Intelligence Initiative
11-1 Glossary of the Body of Knowledge on Infrastructure Regulation11-2 Cooperation with Regional and International Organizations11-3 Cooperation with King Abdulaziz City for Science and Technology (KACST)
1-1 Composition of the Committee1-2 Jurisdiction of the Committee1-3 Modus Operandi of the Committee
2-1 Cases Received by the Committee:
2-2 Comparison with the Previous Year of Cases Received by the Committee and Cases Resolved
2-3 Analysis of Cases by Type of Complaint
2-1-1 Cases on the Docket from Previous Years2-1-2 Cases Received by the Committee in 2014
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PART IVTHE ELECTRICITY AND WATER DESALINATION INDUSTRY IN 2014
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APPENDIX
Subject Page
Chapter 1 : THE ELECTRICITY INDUSTRY
Chapter 2 : THE ELECTRICITY TARIFF
Chapter 3 : WATER DESALINATION
Chapter 4 : PRIVATE SECTOR PARTICIPATION IN THE ELECTRICITY AND WATER Desalination Industry
Appendix : AUTHORIZATIONS, LICENSES, AND EXEMPTIONS FROM LICENSING
THE BOARD OF DIRECTORS
EXECUTIVE MANAGEMENT
1-1 Generation1-2 Transmission1-3 Distribution1-4 Service Connection to Consumers1-5 Growth Trends in the Past Decade1-6 Fuel Types Used in Energy Production1-7 Energy Unit Cost 1-8 Government Efforts to Reduce Electricity Sale Price to Consumers1-9 Average Energy Unit Sale Price
2-1 A Brief History of the Electricity Tariffs in the Kingdom
3-1 Production of Desalinated Water 3-2 Transportation of Desalinated Water3-3 SWCC Annual Desalinated Water Production 3-4 Production Capacity Factor3-5 Electricity Generation In SWCC3-6 SWCC Restructuring Plan
4-1 The Electricity Industry4-2 The Water Desalination Industry
2-2 The Current Tariff2-3 Residential Monthly Bill Data
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SUMMARY OF THE REPORT
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ORT This report consists of four parts:
Part I : Gives a general background of the electricity and water desalination* sector in Saudi Arabia including brief definitions of its components, and a brief overview of the Electricity & Cogeneration** Regulatory Authority (ECRA).
Part II : Reports the Authority’s activities and achievements in 2014.Part III : Lists activities of the Electricity Industry Dispute Resolution Committee***
in 2014.Part IV : Presents a description of the state of the electricity and water desalination
industry**** in 2014, and other issues related to this industry.
The following is a summary of the most significant activities and achievements of the Authority in the fiscal year 2014 within the purview of its mandate, listed in the order appearing in Part II of this report:
Summary of the Report
Consumer Care Publication of the updated edition of the “Provision of Electricity Service Manual”. A high level delegation from the Authority visited SEC facilities in the Jazan Region. The visit included meetings with company officials in the Customers Services Offices to learn firsthand the reasons for the inferior quality of service in the region compared to the other regions of the Kingdom as evidenced by the company’s performance KPIs. The visit resulted in an agreement with SEC to take specific measures to improve service quality in the region and throughout its franchise area. Receiving 599 consumer complaints regarding the Saudi Electricity Company (SEC) services, and resolving about 87% of those complaints. Continuing cooperation with the Ministry of Social Affairs to increase the number of beneficiaries of the social security system who receive assistance for partial payment of the electricity bill. Pursuing with the competent authorities adoption of ECRA’s proposal to expand the categories of beneficiaries of the electricity bill partial subsidy.
* Water Desalination: The process of producing desalinated water without concomitant production of electricity or steam.
** Cogeneration: The simultaneous production of electricity and desalinated water (or steam, or both steam and desalinated water) used in other production processes.
*** Electricity Industry Dispute Resolution Committee: A committee, independent of the Authority, formed by a Council of Ministers decision.
**** The electricity and water desalination industry: Electricity services that Persons undertake or intend to undertake. The services include electricity generation, cogeneration, transmission of electricity, its distribution, supply and trading; water desalination, its transportation to points of distribution, and trading in desalinated water.
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Tariffs
Commencing implementation of the schedule of costs of using the electricity transmission network. Cooperating with the service providers to implement the decision regarding incentives to enhance the “power factor”. Commencing work to update the study of capital and operational expenses of SEC. Completing review of capital and operational expenses of SWCC. Computing the income required by Marafiq.
Codes and Regulations
Participating with relevant entities to review the proposed changes to the Electricity Law. Developing a comprehensive regulatory framework for the codes, procedures, and license forms required for the electricity and water desalination projects that use Atomic and renewable energy. Adopting 21 amendments to several articles of the Saudi Electricity Transmission Code, and approving four requests for exceptions to some articles of the code. These actions were taken upon recommendations of the code supervision committee. Holding four workshops to publicize the Saudi Electricity Distribution Code, and commencing translating it into Arabic.
Reviewing the data base of desalinated water transmission lines, and starting work on development of detailed codes for sea water desalination.
Service Providers Affairs
Investigating the electricity incidents that resulted in nine fatalities in the service provider facilities, and proposing action that may prevent their reoccurrence. Review cases of transgressions against facilities of the electricity service
damages and compensations to the service providers. Review of disputes among service providers, and use mediation to resolve them.
Licensing
By the end of the fiscal year 2014, the Authority issued the following permits, licenses, and exemptions from licensing: Ten permits for electricity generation, cogeneration, and water desalination. Forty licenses for electricity generation, transmission, trading, and distribution; cogeneration; water desalination; and ownership of an electricity network. Nineteen exemptions from licensing for power generation, cogeneration, and water desalination plants.
Continuing work on preparation of the final form of the principal buyer license.
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Electricity and Water Desalination Plans
Signing a memorandum of understanding (MoU) with SEC that outlines a roadmap to insure the company's commitment to fully implement all parts of the Development of the Electricity Industry Restructuring Plan. The MoU includes specific dates for implementing the various elements of the plan. Continuing work on developing the Long-term plan for desalinated water and power generation projects, and their fuel needs.
Continuing work on the study of end uses of water and electricity consumption in the Kingdom. Commencing a study of the technologies of combined heat and electricity production. Developing a road map to achieve the electricity competitive market.
Quality of Service and Performance Monitoring
Auditing licensees performance KPIs, and providing them with recommendations to improve performance. Implementing the plan to enhance reliability of the electricity network in the Kingdom. Starting steps to implement the “Strategy for smart meters and smart grids in the Kingdom”.
Public Relations and Information
Implementing the second TV, press, and other media campaign to educate consumers and inform them about their rights and responsibilities. Issuing a pamphlet about the electricity bill. Creating accounts for ECRA on Twitter and Facebook, and creating a page on Wikipedia about ECRA in both Arabic and English. Publication of the 6th edition of the Electricity Industry Statistical Yearbook. Participating in several exhibitions that were held concurrently with conferences and symposia in order to disseminate information about the Authority. Holding TV interviews and publishing articles in newspapers to inform consumers about the importance of conservation of electricity and water; and to answer the general public’s inquiries about the electricity and water desalination industry and its regulation.
Human Resources and Finances
The numb
year reached 62. They received 110 loans totaling more than SR2.2 million. Work on the human resources (HR) development project was completed. It included reviewing the organizational structure of the Authority, analyzing all
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e-Business and IT
Development of an IT plan for the Authority, and restructuring the IT department. Updating the email system, and beginning the work on updating the electronic
Preparing to implement projects for ECRA’s site, the electronic gateway, and business intelligence.
Other Activities
Completing the work on translation of the Glossary of the Body of Knowledge on Infrastructure Regulation in collaboration with the Public Utilities Research Center (PURC) of the University of Florida, USA, and loading it on the web, Starting a project with King Abdulaziz City for Science and Technology (KACST) to assess the quality of electric power in the Kingdom.
staff positions, developing career paths, reviewing the procedure for employees’ performance evaluation, and other HR procedures. Total ECRA revenues from licensing fees were SR140.8 million. Total ECRA expenses for the year were SR132.7 million, of which SR20 million was allocated for construction of the Authority’s permanent headquarters building.
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PART I
GENERAL BACKGROUND
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The Sector and the Industry
1-1 The Electricity and Water Desalination Sector*
The electricity and water desalination sector* consists of the following components:
Consumers: Natural or corporate persons who purchase products of the electricity and water desalination industry for their own use.
Ministry of Water and Electricity: Has responsibility to propose public policies and draft plans and programs to develop the electricity and water desalination industry.
Electricity & Cogeneration Regulatory Authority (ECRA): Regulates the industry and issues licenses to any person who engages in any of the activities of the electricity and water desalination industry. It also monitors performance of the licensees, sets rules and regulations that govern the relationships between the licensees, and between them and the consumers. The following chapter contains details of the Authority’s goals, responsibilities, and areas of interest.
Electricity and Water Desalination Industry: Composed of entities licensed by the Authority (such as SEC, SWCC, MARAFIQ, and other entities as shown in this report) to engage in any of the electricity activities. These activities include. electricity generation, desalinated water or steam production (concomitant with generation of electricity), transportation of these products, their distribution to consumers, or trading in them.
* Some people confuse the term electricity and water desalination sector with the term electricity and water desalination industry and use both of them interchangeably as synonyms. The correct use is that the sector includes the consumers, the Ministry, the Authority and the industry, while the industry is one component of the sector.
Chapter 1
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1-2 The Electricity and Water Desalination Industry
The electricity and water desalination industry consists also of two components:
1-2-1 The Electricity Industry
At present, SEC is the dominant player in this industry, as will be shown in Part IV of this report. It is a joint stock company whose shares are publicly traded on the Saudi Capital Market. The Saudi Government along with Saudi Aramco jointly own more than 81% of SEC’s shares. The company is engaged in electricity generation, and distribution to consumers. The National Electricity Transmission Company* has the responsibility to transport electricity from the generation plants to the distribution networks.
SWCC supplMARAFIQ supplies Yanbu Industrial City with its needs of electricity and desalinated water as well as other services.There are also a number of independent generation plant owners who supply electricity to large consumers directly.
In the past few years, a number of IPPs and IWPPs were built. Another group of these projects is currently under construction or under bidding. These projects sell their electricity production to SEC and their water production to SWCC.
ECRA’s Board adopted a plan for the electricity industry restructuring development**. The plan envisages unbundling the current vertically integrated structure into independent entities for generation, transmission, and distribution. This is done to create an environment that will be attractive for private sector investment, will entice
specialization of management. It is obvious that competition will be most pronounced in the areas of generation and provision of service.
1-2-2 The Water Desalination Industry
SWCC is the dominant entity in this area. Currently it is a government agency. However, a few years back it embarked on an ambitious program to privatize some of its operations. Preparation of the plans was completed and they were submitted to the higher government authorities for approval.
Implementation of the restructuring plans will introduce competition, a practice hitherto unknown in the kingdom in this area.
There are several IWPPs that have been completed and have begun production, while a number is either under construction or in bidding. These projects will provide a
* In 2011 The National Electricity Transmission Company was established as a limited liability corporation, wholly owned by SEC.
* * See (The Electricity Industry Restructuring Development Plan) on page 54.
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2-1 The Authority’s Goals and Remit
The Electricity & Cogeneration Regulatory Authority (ECRA) was established in 2001* with the aim of insuring that consumers in the Kingdom obtain electricity supplies; and products of cogeneration and water desalination that are adequate, reliable, of high quality, and at reasonable prices.To carry out this objective the Authority monitors the performance of service providers, within a regulatory framework that is consistent with the government’s laws, its decisions and policies, and the applicable standards in the Kingdom as well as international best practices.
The main goals of the Authority are: Protection of the public interest and the rights of consumers. Promotion of consumer oriented electricity, water desalination, and cogeneration services that protect the consumer’s right of choice among competing service providers. Encouragement of private sector investors to participate and invest in the development of the Saudi electricity and water desalination industry, protecting the interests of those investors, and enabling them to realize fair economic returns on their investments.
Formation of a clear, transparent, stable, and non-discriminatory regulatory framework for the electricity and water desalination industry. Creation of a favorable environment that encourages legitimate and fair competition among providers and suppliers of the electricity and water desalination industry.
The Electricity Law and the Authority’s Charter delineate the responsibilities
responsibilities cover four areas as follows:
Supply Matters: They include the following:
Issuing licenses for generation, transmission, distribution, retailing, and trading of electricity and cogeneration services as well as production, trading, and transportation of desalinated water. Monitoring licensees’ compliance with their license requirements and conditions. working in the areas of the activities of the electricity and water desalination
* The Authority was established by Council of Ministers Decision Number 236 issued on 13 November 2001. On 5 July 2004 the Council of Ministers, by Decision Number 163, assigned to the Authority the additional responsibility of regulating the cogeneration industry. Consequently, the Authority’s name was revised to the current appellation of "Electricity & Cogeneration Regulatory Authority" (ECRA). On May 21, 2007 the Council of Ministers enacted a new charter for the Authority, through the Council’s Decision Number 154, that included addition of the regulation of production and transportation of desalinated water to the existing ECRA remit.
Overview of the AuthorityChapter 2
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PART I
industry. This process facilitates review of the industry costs and proposing measures to control them.
Coordination of the infrastructure of the electricity and water desalination industry. Developing expansion plans of the electricity and water desalination industry.
Consumer Issues: They include the following:
Assessment of tariffs charged for supply of the electricity and water desalination industrymodifying whatever tariffs fall within its purview while for other tariffs submitting proposals to the government. Protecting interests of stakeholders in the electricity and water desalination industry. Setting the rules that govern relations among licensees, and between licensees and consumers. Investigating and resolving complaints by involved parties, and exerting efforts to resolve them. Improving the electricity and water desalination industry’s general performance.
Technical Issues: They include the following:
Developing and issuing codes and standards for the electricity and water desalination industry.
Insuring compliance of the licensees with these codes and standards. Developing performance KPIs for the electricity and water desalination industry service providers, and monitoring these KPIs.
Monitoring implementation of the electricity and water desalination industry development plans.
Insuring adequacy of the R&D activities of the electricity and water desalination industry.
Promoting measures for energy conservation (in coordination with the Ministry of
Handling other relevant technical matters.
Organizational and Administrative Tasks: They include the following
electricity and water desalination industry. Developing regulations for expansion of the infrastructure of this industry. Encouraging private sector participation and investments in the electricity and water desalination industry. Issuing periodic reports to the Council of Ministers on the electricity and water desalination industry’s performance, production costs, and electricity and water desalination industry’s tariffs.
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2-2 Organizational Structure of the Authority
E nancially and administratively autonomous organization, supervised by a board of directors chaired by the Minister of Water and Electricity, with the Governor of the Authority as deputy chair, six members from senior government
Mineral Resources, Commerce & Industry, Economy & Planning, and SWCC; and
entitled “The Board and Executive Management”, (page 141) shows composition of the Board in 2014.
As per Article 7 of the Authority’s Charter, the board is the ultimate authority to supervise ECRA’s affairs. The board responsibilities include adopting policies and plans for ECRA's operations; pursuing implementation of laws, regulations, and directives related to public policies as well as the approved plans of the electricity industry and the cogeneration and water desalination projects.
The Authority is headed by the Governor who is appointed by a Royal Order at the ministerial rank of “Distinguished Grade”. He is the chief executive and operating
The following departments report directly to the Governor:
Information technology: Oversees procurement of all ECRA’s needs of IT hardware and software; and has responsibility for their maintenance, updating, and security at all times.
Public Relations and Information: Maintains communication with the press and other media outlets to disseminate ECRA news and information. It also coordinates
prepares informational materials about the Authority, and oversees execution of public relations campaigns.
Internal Auditing Unit: Undertakes means and measures to protect cash and other
accounting records. It also insures effectiveness and adequacy of administrative
guarantees compliance with the rules, instructions, policies and approved plans of
while at the same time assuring integrity and effectiveness of the internal auditing regime.
The Governor is assisted by three vice-governors, and a number of permanent and temporary advisors and consultants.
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Each vice-governor heads a sector of ECRA’s operations as follows:
Vice-Governor for Consumers and Service Providers AffairsSupervises the following two departments:
Consumer Care- which undertakes the following responsibilities: Investigating consumer complaints and claims of violations by service providers. Preparing cases for referral to the Electricity Industry Dispute Resolution Committee. Periodically reviewing causes of consumers’ complaints and disputes in order to suggest appropriate rules and procedures to eliminate them.
Service Providers Affairs-which has the following responsibilities: Handling documentation of service providers’ rights and obligations. Reviewing disputes and claims of violations by a service provider against another, or against the Authority.
Preparing cases for referral to the Electricity Industry Dispute Resolution Committee. Periodically reviewing causes of service providers’ complaints and disputes in order to suggest appropriate rules and procedures to eliminate them.
Vice-Governor for Regulatory Affairs
Oversees the following departments:
Technical Affairs- which has the following responsibilities: Preparing technical studies dealing with regulating the electricity and water desalination industry. Preparing standards of performance for licensees, and overseeing their compliance with these standards.
Legal and Licensing Affairs- which has the following responsibilities: Receiving applications for authorizations, licenses, and exemptions from licensing. Overseeing compliance of licensees with the requirements and conditions of the Law and their licenses. Preparing contracts and agreements. Drafting and reviewing proposed rules, procedures, regulations, and forms used for the industry. Representing the Authority and defending it in litigations and courts.
Economics and Tariff Affairs- which has the following responsibilities: Conducting studies on the economics of the electricity and water desalination industry.
Preparing studies for tariff reviews. Developing indicators and incentives for consumers and service providers to encourage conservation and improve performance. Maintaining the Electricity National Register and updating its contents periodically.
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Vice-Governor for Support Services
Oversees the following departments dealing with the Authority’s internal and
Financial Affairs- which includes the following functions: Budgeting. Accounting. Auditing. Treasury.
Human Resources- which handles the following functions: Employment. Salaries and wages. Training and scholarship programs. Health insurance, and travel. Personnel services.
Administrative Support- which includes the following functions: Mail services. Purchasing. Storehouse. Reproduction, photocopying, document scanning, and binding. Transportation. Central archives.
which has the following functions: Overseeing space utilization. Operation and maintenance of the building. Supervising janitorial services, and building security.
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Public Relations&
Information
Governor
External Auditor
Consumer Care
Economics & TariffsLegal & Licensing
Finance HR
PropertyManagement
AdministrativeSupport
Technical Affairs
Service Providers
Vice-Governor,Consumers and Service
Providers Affairs
Vice-Governor,Regulatory AffairsVice-Governor,
Support Services
Board of Directors
Figure (1): Organization chart of the Authority
Governor's Of ce
Internal Auditing
Consultants
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PART II
ACTIVITIES AND ACHIEVEMENTS
OF THE AUTHORITY IN 2014
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The Authority adopted an approach to the execution of its responsibilities that balances consumer rights and the legitimate interests of the service providers in order to maximize the public interest. This approach is based on the Authority's mission to insure that electricity and desalinated water supplies are adequate, of high quality, high reliability, and available at reasonable economic costs. At the same time, the approach has to be consistent with the requirements of the Development of the Electricity Industry Restructuring Plan, which aims to create an environment that encourages the private sector to participate in the development of the electricity and water desalination industry.
fostering the interests of consumers and protecting their rights included the following:
1-1 Publishing the Updated Edition of the “Provision of Electricity Service Manual”
During the report year the Authority published the updated edition of the “Provision of Electricity Service Manual” which regulates the relationship between the
to all categories of consumers.
Section 4-2 of Chapter 4 in Part II (page 44), gives details for the most salient updated points of the manual.
1-2 Field Visits to Facilities of a Service Provider
Field visits are one of the most important means of interaction with the public and with the staff of the service providers. Through these visits, the Authority is able to
by the service providers.
isit locations are determined through statistical analysis of consumer complaints as well as through information gleaned from special studies that indicate trouble areas.
During the report year a high ECRA delegation, headed by the Governor, visited Jazan Province. The delegation met with HRH the Governor of the Province, members of the Provincial Council, and many citizens. The visit also included tours of a number of customers’ service centers, and several generation plants. The tours were aimed at assessing the quality of customer service, and discussing several aspects of customers’ complaints. Extensive meetings were held with the regional representatives of SEC and the company’s contractors where measures to improve the level of customer service were discussed. The discussions also covered ways and means to expedite execution of electricity projects in the Province.
Consumer Care
Chapter 1
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1-3 Review and Handling of Consumers Complaints
The Authority works continuously to improve the quality and reliability of the electricity service offered to consumers through a program to measure the service providers’ performance using approved measures (KPIs). (See Section 7-1 of Chapter 7 in this Part II on page 62). It also carries out analytical and statistical studies of consumer’s complaints, regarding the quality of service, which are submitted to MoWE, the Authority, the service provider, or published in the media. In order to attain the highest levels of consumer satisfaction with the service, ECRA pays particular attention to consumer complaints. It regards this as one of the most important channels to measure the quality of electricity service. The Authority exerts
goal of improving the service and reach a high level of consumer satisfaction through the following measures: underlying them, and work on resolving them.
reach satisfactory solutions.
While in the region, the delegation also visited the Shuqaiq desalination plant and the desalination plant in Farasan Island. The delegation members met with workers in the
faced by the service provider in running these plants.
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Insuring effectiveness of the service providers’ procedures to handle complaints. Insuring that all customers are treated fairly within the approved laws and regulations. Utilizing results of complaint analysis to:
introduce enhancements to the “Provision of Electricity Service Manual” or performance KPIs – as needed. design public relations campaigns carried out by the Authority.
During the report year, the Authority received 599 complaints concerning various aspects of the electricity service offered by SEC. The complaints are listed according to the SEC business sector (Figure 2) in which the complaint originated.
Figure (2): SEC business sectors
ArabianGulf
DammamBuraidah
Riyadh
CentralSector Eastern Sector
Southern Sector
WesternSector
HayelMadinah
MakkahJeddah
RedSea
Taif
Al-Baha
AbhaJazan
FarasanIslands
Najran
Arabian Sea
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Table 1 shows the number of complaints categorized by complaint type and the SEC business sector where it originated.
and SEC business sector where it originated
Complaint Type
Service Connection
Billing and Tariffs
Removal of CableNetworksService Outage
Quality of Service
Other Complaints
Total
17
50
2
2
0
2
73
64
60
17
35
14
7
197
63
68
9
30
4
4
178
62
32
26
17
7
7
151
206
210
54
84
25
20
599
Eastern Central
The SEC Business Sector Where the ComplaintOriginated
Western SouthernTotal
By the end of the report year, the Authority resolved 87% of these complaints; the remainder are still under study, review, and follow up.
Studying the information in the table, the Authority noted the following: The total number of complaints received in 2014 increased markedly, by approximately 33%, compared to the previous year. The number of billing and tariff complaints increased by around 12% from the previous year. In particular, in the central business sector, this category of complaints increased by 161%. This dramatic increase is attributed to SEC’s continued intensive programs of auditing bills and in situ meter examinations. As a result of this effort, the company was able to determine if the meters were malfunctioning or they had been tampered with. Consequently, the company took measures to correct the situation of those meters. Complaints concerning new service connections rose by approximately 110% compared to the previous year. This type of complaint included the following: Complaints of delay in getting the connection. Complaints regarding the high cost of the service connection.
The increased level of complaints regarding delays in service connections is attributed to problems of SEC’s subcontractors who do the actual connections. These problems include questions regarding effectiveness of SEC’s supervision
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The category labeled “Other Complaints” in Table 1 includes complaints regarding requests for transfer of meters to other locations, requests for establishing emergency centers, objections to the value of compensation for eminent domain actions connected with the rights of way for electricity lines, trenching in front of houses, and other such complaints.
Figure (3) shows the percentage distribution of the various complaints. It is evident from the chart that complaints about billings and tariffs, and about service connections represent about 70% of the total number of complaints received by the Authority.
Figure (3): Percentage Distribution of the Type of Complains
35%
9%
14%
4%Quality of Service Other Complaints
ServiceConnecttions
Billings and Tariffs
ServiceOutages
Relocationof CableNetworks
3%
35%
and its ability to deliver materiel to the subcontractors in a timely manner. ECRA issued directives to the company to take corrective measures in order to shorten the service connection time.
With respect to complaints regarding the increased cost of service connection, it is attributable to SEC’s use of new circuit breaker capacities. The effect of introducting the new capacities became apparent upon implementation of the decision to switch the voltage standard in the Kingdom from (127/220V) to (230/400V). As a result of this change, ECRA adopted new standard breaker capacities that provide better matches with the actual loads of the buildings and facilities requiring the service. (See Section 4-2-5 page 47). The number of complaints regarding service outages increased by about 11%, compared with the previous year. Most of these complaints originated in the Central and Western sectors.
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Viewing the complaints by the SEC business sector from which they originated (Figure 4), it becomes evident that complaints were distributed about equally between the Central, Western, and Southern sectors, while the Eastern sector was the source of the least number of complaints. 30%
25%
12%
Eastern Sector
Southern Sector
Western Sector
CentralSector33%
Figure (4): Percentage Distribution by the SEC Sector
where they Originated
During the report year, the Authority continued its efforts with SEC to deal with the problems which were revealed in the study of causes of power outages (especially in the electricity transmission and distribution operations). The Authority emphasized the need for service quality improvements in general, and the problem of delay in service connection in particular.
Based on the information derived from measurement and auditing of performance KPIs (Section 7-1, page 62), the Authority continues to urge SEC to implement the recommendations which outline the required procedures for service performance improvements. The Authority pointed out to SEC that implementation of many of these recommendations does not necessarily require investments of large amounts of capital. ECRA expects that its diligent pursuance of these issues with SEC will result in mitigation and resolution of these problems and complaints.
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System*
Pursuant to the cooperation agreement between ECRA and the Ministry of Social Affairs (MoSA), the Authority during the report year continued the work of following up and development of the program of partial subsidy of the electricity bills for
During the the program increased from around 350,000 meters to around 409,000 meters. Work is still in progress with MoSA and other government agencies to increase this number to a half million meters in the next few years.
Partial Subsidy
During the report year, the Authority took advantage of the experience it gained
of the social security system to develop a proposal to provide similar assistance to
evidence of their limited monthly incomes. The proposal was submitted to higher authorities for consideration.
This effort by ECRA stemmed from its responsibility to foster the public interest and rationalize government subsidy to the electricity industry by directing it to the really needy categories. This process will make it possible in the future to develop rational tariffs that maintain the balance between social considerations and the electricity industry need for adequate income to insure its sustainability, without the need for subsidy from the public treasury. The rationalized tariffs also encourage conservation practices.
widowed or divorced women, families of persons in the penal system, and those without a provider. At the time of the report this group numbered around 700,000 persons, representing about 10% of residential electricity consumers.
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* See Section 6-1 the “Electricity restructuring development plan”, page 54.
The Development of the Electricity Industry Restructuring Plan* envisions the existence of a large number of entities (the so-called service providers) that are active in the various aspects of this industry, i.e., generation, transmission, distribution, or service provision. As steps to implement the plan accelerate, the number of entities licensed to undertake electricity activities has grown. ECRA realized from the beginning the need for a department that will promote the interests of the service providers and advance issues and matters of importance to them.
Thus a department was created which focuses on the following areas: Documenting the rights and responsibilities of the service providers. Reviewing violations and complaints between service providers and attempt to resolve them through mediation. Pursuing violations against the service providers’ facilities, and undertake appropriate legal actions with respect to the violators. Overseeing adherence of the service providers to the conditions of their licenses and requirements of the Development of the Electricity Industry Restructuring Plan.
Pursuing adherence of the service providers to the approved standards of service quality, health and safety, and environmental protection. Investigating electricity and water desalination industry incidents. Adjudicating disputes that arise between the service providers.
During the report year, the activities of the Authority in the area of service providers’ affairs included the following:
2-1 Electricity and Water Desalination Industry Incidents
ECRA made safety one of its top concerns, as required by its mandate under the Electricity Law. It thus made it one of the primary requirements to grant licenses to entities operating in the arena of the electricity and water desalination industry.
Statistics for safety incidents at SEC recorded by ECRA in 2014 reached an alarming level. They resulted in a large number of deaths and injuries. The statistics
incidents, nine deaths and thirty-six injuries. This is a rate of
ECRA received no reports of incidents in the water desalination industry.
The large increase in the number of incidents at SEC in the report year is attributed to a fundamental change in the procedure of reporting incidents and documenting them which ECRA introduced and required the company to implement. The
Service Providers Affairs
Chapter 2
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their causes. Subsequently, it becomes possible to take corrective measures and suitable recommendations to deal with these causes and prevent recurrence of the incidents.
activities of SEC.
Figure (5): Distribution of SEC's Safety Incidents in 2014
30
35
2931
5
GenerationTransmissionDistribution
Num
ber
IncidentsInjuriesDeaths
31
2 3 4 2
25
20
15
10
5
0
procedure requires the company to document the accidents that take place whether as a result of its own activities, or those of its subcontractors.Good documentation makes it possible to fully investigate incidents, and determine
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Incidents, deaths, and injuries were distributed among SECs business sectors as shown in Figure (7).
activity.
By analyzing the parties that contributed to the incidents (Figure 6), it becomes evident that staff of SEC’s subcontractors were responsible for most incidents, deaths, and injuries.
Figure (7): Distribution of SEC's Safety Incidents in 2014
Figure (6): Distribution of SEC's Safety Incidents in 2014
30
2225
5
OthersSEC personnelSubcontractorpersonnel
10 10
2 3 1 2
25
20
15
10
5
0
Num
ber
IncidentsInjuriesDeaths
Party causing the accident
02
43
12
4
10 11
2
1314
79
468
10121416
Eastern Central Western
Business Sector
Southern
Num
ber
IncidentsInjuriesDeaths
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directives to SEC. The directives included the following: Emphasizing development of administrative procedures. Reiterating the necessity of complying with work order procedures and work permits. Emphasizing the imperative of wearing personal protection clothing. The imperative of training and qualifying the company staff and those of its subcontractors on safety procedures. The necessity of performing risk analysis before undertaking a job. Emphasizing knowledge and experience transfer between the various company departments as well as its subcontractors. Disseminating to all staff of the company and its subcontractors the results of the lessons learned from past incidents.
company facilities, SEC’s compliance with these directives.
2-2 Transgression against the Service Providers FacilitiesThe “Committee for Review of Complaints and Violations of Transgressions against Service Providers Facilities” was constituted by a decision of ECRA’s Governor. The decision was based on the authority delegated to the Governor by the Minister of Water and Electricity. It was included in Executive Order Number (1/86) issued by the Minister of Water and Electricity on 18 September 2012 to ratify the Bylaws of Rules of Affadavits and Estimation of Costs of Repairs, Compensations, and Determination of Penalties for Breaches against Service Providers Facilities. The bylaws were issued in compliance with requirments of the “Protection of Public Utilities Law”.
The aim of forming the committee was to curb transgressions against facilities of the service providers. Such transgressions result in lowering the overall service quality
reckless actions are not limited only to the expenses incurred by the service providers but extend to the entire national economy.
During the report year the committee received from SEC 218 alleged cases of transgression against its facilities. These cases are classifeid into three main categories (Table 2) as follows: Allegations of meter tapmering. Allegations of changing main circuit breaker capacity. Allegations of transgression on the network.
Table (2): Number of Allegations of Breaches againstSEC Facilities Received by ECRA in 2014
AllegationMeter Tampering
Changing Main Circuit Breaker CapacityInfringements against Network
Total
1019
108218
Number
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affordable to end-users, and at the same time they enable the service providers to cover their costs and receive a fair economic return on their investments. In order to achieve these objectives ECRA’s responsibilities include the following: Developing a methodology for tariff setting and for periodic review of the adopted tariffs. Designing and preparing a tariff structure. Developing an overall tariff policy statement for the Kingdom. service providers in the Kingdom.
Developing a comprehensive cost accounting system in order to assess service providers’ costs which ultimately affect the tariff paid by consumers.
resources against early depletion, and protection of the environment, as well as economic factors require that all countries embrace policies which are sustainable for
by providing consumers with incentives to improve their utilization of the electricity system, and apply conservation measures that reduce their costs while at the same time
ECRA’s tariff activities in 2014 were as follows:
3-1 Implementation of the Power Factor Improvements Incentives
Improvements of the equipment power factor* by the consumer result in reduction of power losses in the public network, thus leading to an increase in available capacities that makes it possible to provide service to new consumers without the need for additional investment by the service provider or the increase of capacities of the transmission and distribution networks.
The data collected by the Authority from a sample of industrial consumers in the Kingdom indicated that an improvement in the power factor** from the current levels (0.75, on average) to 0.85 will lead to liberating generation capacities*** estimated at
alone of not less than SR4 billion, as well as savings of other investment costs that would have been required to enhance the transmission and transportation networks, savings in costs of fuels and operation, and reducing the energy loss in the network.
* The Power Factor real power used by the consumer to the apparent power. (The apparent power is the sum of the real power and the reactive power which the consumer imports from or exports to the public network, depending on his type of consumption).
** Improvements in the power factor result from having the consumer produce his needs for reactive power on his premises, at his own expense, in return for suitable incentives for him, rather than importing the reactive power from the public network.
*** The liberation of generation capacities results from the fact that the service provider does not need to provide the consumer with reactive power when the latter generates it himself. Providing reactive power by the service provider
real power. It also increases power losses in the transmission and distribution networks. The international practice is for each consumer to import from the public network as little reactive power as possible.
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But improvements in the power factor require the consumer to make substantial investments to acquire in his premises equipment that produces reactive power. Therefore, it is necessary to offer him incentives to entice him to make the needed investments. According to international practices, the incentives for improving the power factor are usually offered through tariffs. They are designed so that the consumer recovers his investment in a short period of time. Thus, in the long run, he realizes sizable savings, and therefore, both the consumer and the service provider gain.
In accordance with international practices, ECRA’s board adopted a decision in 2012 for a program of incentives to improve the power factor which included the following provisions: The decision shall be applicable to any non-residential consumer (i.e., industrial, commercial, and government consumers) connected to a transmission or distribution network and whose contracted load exceeds 1 megavolt ampere (MVA). Such a consumer shall be required to attain a power factor of not less than 0.85 A tariff of SR0.05/kVArh of additional reactive power shall be applied when the monthly consumption of reactive power exceeds 62% of real power (This percentage of consumption is equivalent to a power factor less than 0.85). This tariff shall come into force 18 months after publication of the decision in
In all cases, the tariff shall not be applied until six experimental cycles of billings have been executed for a customer in order to demonstrate to him the costs of the reactive power. minimum permissible limit for the power factor shall be 0.90. Then ten Hijri years henceforth the minimum will be 0.95.
During the report year, the Authority, in cooperation with the service providers, embarked on implementation of the decision as of May 1, 2014.
3-2 Review of Capital and Operational Expenses of the Saudi Electricity Company (SEC)
One of the most important elements of ECRA’s mission statement is to insure that consumers of products of the electricity and water desalination industry in the Kingdom are provided with adequate supplies at fair prices. In the framework of this task, the Authority continuously monitors costs of the products and services of the various activities of the electricity industry (i.e, generation, transmission, distribution, and service provision).
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During the report year, the Authority commenced an update of a previous study*, which it initially made in 2010, of SEC’s capital and operational expenses as well as its investment instruments. The update will include evaluation of the company’s subcontracted works in order to determine whether such a method is advantageous for the company in terms of improving service quality and reducing costs. The update study is expected to be completed in 2015.
3-3 Review of Costs of the Saline Water Conversion Corporation (SWCC)
During the report year, the Authority completed a review of the capital and operational expenses of the desalination plants of the Saline Water Conversion Corporation (SWCC) for the years (2014-2016). In the coming year 2015, the Authority plans to review the costs of desalinated water transportation from the desalination plants to the distribution networks. The study is expected to be completed in 2016
3-4 Computation of the Income Requirements of the Power and Water Utility Company for Jubail and Yanbu (MARAFIQ)
During the report year, the Authority undertook a process to compute the required income for the Power and Water Utility Company for Jubail and Yanbu (MARAFIQ). The work included the electricity activities (generation, transmission, and distribution), and the water desalination activity. The Authority’s effort involved comprehensive review of all elements of the capital and operational expenses. The review included indices to determine the extent of the need for the capital or the operational expenses,
The Authority carried out a comparison of the company’s required income from the electricity activity with the actual income collected in accordance with the approved tariffs. The comparison showed that the tariffs provide the company with adequate income.
With regard to the water activities, the Authority provided the results of computations to the water regulator in the Royal Commission for Jubail and Yanbu which is responsible for setting the water tariffs within the company’s franchise area.
* The previous study showed that the rate of SEC’s capital expenses was acceptable, and consistent with comparable entities around the world. On the other hand, the study showed that a comparison of the company’s operational expenses with utilities in 18 countries (such as USA, Canada, Australia, France, Malaysia, South Korea, Oman, and Jordan) showed that SEC’s expenses for generation and transmission were lower than the comparable companies. In the distribution activity, however, SEC’s expenses were higher. This was attributed to the company’s low level of investment in this activity compared to investments in generation and transmission. The Authority is working with the company to remedy this situation.
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In the area of laws and regulations, the Authority’s activities in 2014 included the following:
4-1 Project to Update the Electricity Law
The Electricity Law was issued in 2005, and a minor amendment to it was made in 2010.Pursuant to a Royal Directive to review and update all the Kingdom’s laws, a team of specialists was formed in 2012 by the Ministry of Water and Electricity (MoWE). The team included members from ECRA. The charge of the team was to review the Electricity Law
in keeping with international best practices in the electricity and water desalination industry. The review aims also include incorporating the requirements of the electricity and water desalination industry, especially with regard to the regulations concerning water desalination, as well as incorporating the requirements of using atomic and renewable energy in electricity generation and water desalination.
The team completed its work in 2013.
During the report year, the Authority participated with the other relevant parties in deliberations of the proposed amendments in accordance with the standard procedures of promulgating laws in the Kingdom.
4-2 Publication of the Updated Edition of the “Provision of Electricity Service
Manual”
During the report year, the Authority published the updated edition of the “Provision of Electricity Service Manual” which regulates the relationship between the consumer and the service provider and outlines the procedures for providing the service to all
categories of consumers.
The update included a digest of the lessons ECRA gained from implementing
and service providers’ complaints and suggestions. The update also included best
regional and international practices.
The most salient updates of the manual in the aspects concerning the consumer may be summarized in the following:
Laws and RegulationsChapter 4
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4-2-1 Reducing the Period for Connecting New Service
The period for connecting new service was reduced from 60 calendar days to 30 workdays (which means a reduction of 30%). This reduction came as a result of studies of the analysis of consumers’ complaints, data gleaned from auditing the service providers’ performance KPIs, study of international practices, and taking into consideration the abilities and responsibilities of the service provider.The objective of the reduction was to improve the quality of service and increase consumer satisfaction. The Authority considers this reduction a step in a phased process to reach its ultimate goal of setting a ceiling of twenty workdays for new service connection.
4-2-2 Changing the Billing Mode of Small Value Bills
Analytical studies of monthly electricity consumption bills showed that the value of a large number of these bills does not exceed SR100. Issuing these bills and delivering them to consumers constitutes a great burden on the service providers
performance, and consequently affecting the service providers performance of their duties towards consumers.
In order to deal with this issue of bills whose values do not exceed SR100 monthly, the manual contained approval for discontinuing printing of these bills and instead substituting the following actions:
Making the bills available in all the various collection outlets. Billing the consumer through the electronic collection system “Sadad”*
Making the bills available through the service providers’ internet site. Delivering the bills through SMS to the consumers’ mobile phones.
The manual carried statements emphasizing that all classes of consumers continue
* SADAD Payment System is the Electronic Bill Presentment and Payment (EBPP) system established by the Saudi Arabian Monetary Agency (SAMA) to be the national (EBPP) service provider for the Kingdom.
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4-2-3 Connection and Consumption Agreements
A special appendix to the manual contained two agreements: one for the electricity service connection and the other for electricity consumption. The two documents
provider. They govern the relationship between them unequivocally. They also provide the opportunity to inform those requesting new service of the necessary connection requirements. The Authority placed advertisements in the local newspapers soliciting public comments on the documents prior to their adoption and inclusion in the manual.
4-2-4 Updating the Rules for Recording Consumption and Collecting Debts
In additi
been, for a long time, the subject of suffering by both the consumer and the service provider:
provider used to register the meter in the name of the property owner. This practice
energy consumption debts, either because of the delinquency of tenants in paying costs of the electricity service or because of their failure to pay for it when they move out of the rented property. The second problem is possession by some consumers of more than one meter. The service provider used to record the consumption costs of each meter as a separate and independent indebtedness.
The Authority dealt with these two issues in the manual update in the following manner: Directing the service provider to register the meter in the name of the actual consumer, rather than the name of the property owner.
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Directing the service provider also to record debts of all meters registered in the name of a consumer as a single indebtedness and adding up the debts of all meters together in one record.
Undoubtedly, these actions will assist in achieving the goal of controlling the issue of providing the service and disconnecting it in accordance with the provisions of the manual, and protecting the property owners from the consequences of tenants failure to pay electricity bills before moving out.
4-2-5 Adoption of New Circuit Breaker Capacity Standards
Costs of new electricity service connection to buildings depend on the circuit breaker capacities that are installed. In the past, breaker capacity tables contained a limited set of standard capacities which were used to connect the service. Therefore, in some instances the installed breaker at the consumer facility had higher capacity than his actual load and was thus charged higher costs accordingly. In other instances, the installed breaker was smaller than the actual load which resulted in frequent service outages. It also resulted in charging the customer less than the costs of his actual load.After adopting the standard voltages of (220/400V) throught the Kingdom, the need arose to review the breaker capacities tables in order to bridge the gap between the connected load (actual load) and the contracted load (the breaker capacity).
To deal with this issue, the revised edition of the “Provision of Electricity Service Manual” contained tables with new standard breaker capacities. The introduction of these tables was aimed at achieving the following objectives
Bridging the gap that existed under the former procedure. Realizing a greater degree of fairness in the interaction between the consumer and the service provider. Giving the consumer the opportunity to determine his required loads by utilizing the services of a licensed professional.
4-2-6 Electricity Service Connection to Buildings Located Outside Planned Areas or Outside Network Coverage Areas
The revised edition of the manual included a procedure for electricity service connections to buildings located outside the planned areas, or outside network
exceeding 1000 meters from an existing medium voltage network.
The procedure included adoption of standards for participation of the consumer who seeks the service connection in the costs of building that part of the connection that lies outside the network. The procedure takes into consideration fairness in distributing the costs of building the additional portion of the network between the various
connections to facilities outside his network.
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4-2-7 The Estimated Bill
During the years of working with the previous edition of the manual, the Authority
the meters by some consumers, or planting trees directly in front of the meters.To obviate these problems, the revised edition of the manual included several rules that enable the service provider to issue an estimated monthly bill which is used until hindrance to the meter reading is removed. The rules contain conditions that require the service provider to alert the consumer to the situation. Furthermore, after the meter reading hindrance is removed, the consumer’s right to take advantage of the “consumption bracket system” is protected for the entire period when the estimated bill was used.
in that it allows the service provider to collect his dues without delays, and protects the consumer against accumulation of bill amounts
4-2-8 Serving Consumers who Have Critical Need for Electricity
Continuity of service is an essential and urgent requirement in facilities housing persons whose life depends on electrical equipment, or whose life may be endangered by electricity outage.
In consideration of such circumstances, the revised edition of the manual included a
service provider to insure continuity of electrical service to this category of consumers in the case of scheduled service outages and to minimize the effect of emergency outages. The manual also contained special provisions to handle the situations in which such persons are encumbered with regard to payments of their electricity bills.
4-2-9 Tampering with the Electricity Meters
To deal with cases of electricity meter tampering by some consumers, or tampering with the connections and equipment for the purpose of fraudulently obtaining electricity service without fully (or partially) paying for it, the revised edition of the manual contained provisions that delineate the procedures to be taken by the service provider when he discovers such tampering. The procedures outline the responsibility of each party so that no one suffers the consequences of the tampering except the party that caused it. The provisions were written so that they are consistent and in conformity with the “Bylaws of Rules of Affadavits and Estimation of Costs of Repairs, Compensations, and Determination of Penalties for Breaches against Service Providers Facilities”
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4-2-10 Rights of Way of Transmission Lines and Safe Distances around Distribution Networks
It is implicitly assumed that safety of people and properties was taken into consideration in building the electric networks in general, and overhead lines in particular. In this regard, the revised edition of the manual contains tables setting the right of ways for overhead lines and the safe vertical and horizontal distances of the overhead networks from buildings, roads, and other facilities.
The mawhen building new networks. As for the existing networks, he must remedy any situation that constitutes a danger to persons or properties and insure that the network remains within the approved safe limits.
4-3 Preparation of a Framework for Regulation of Electricity and Desalinated Water Production Using Atomic and Renewable Energy
During the report year, the Authority completed a study to develop a regulatory framework for the activities of electricity generation, cogeneration, and water desalination production from projects using atomic and renewable energy. The study involved development of bylaws, procedures, and license forms for the aforementioned activities of these projects. The work was carried out in cooperation with King Abdullah City for Atomic and Renewable Energy (K.A.CARE).
The most responsibilities, as a regulator, and the extent of their convergence or divergence from those of K.A.CARE. The study outlined proposals for the changes that are required to be made to the Electricity Law, its Implementing Regulations, the Saudi Transmission Code, and other related regulations issued by ECRA. Also, during the study, license forms were developed for trading in products of electricity and desalinated water for projects that use atomic and renewable energy to produce
the existing licenses for generation, transmission and distribution.
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Commercial Purpose
During the report year, the Authority worked with the Ministry of Petroleum and Mineral Resourcesand commercial purposes. The Authority also participated in meetings at the Bureau of Experts at the Council of Ministers to review the proposed draft law.
4-5 Water Desalination Regulation
The Authority’s mandate includes responsibility to regulate production of desalinated water, delivering it to the storage points for the distribution networks, and trading in desalinated water.
In compliance with this responsibility, the Authority commenced work during the report year, with the Saline Water Conversion Corporation (SWCC), on a comprehensive study of water desalination. The study aims to develop a regulatory framework that will assist the Authority in carrying out its responsibilities and monitor performance of the licensees. In addition, the study will also cover the following areas: Evaluation of the modus operandi of SWCC in the areas of planning, execution,
administrative, and human resources aspects.
Comparing SWCC’s performance with similar local, regional, and international organizations.
Review and evaluate progress of SWCC’s current privatization plans Develop a regulatory regime to assist the Authority in carrying out its regulatory responsibilities with respect to SWCC.
The study includes evaluation of the current status of SWCC, making recommendations
and improve the economics of its production.
4-6 Codes Supervision Committees:
Each code supervision committee undertakes periodic reviews and updates of the code under its supervision to insure its compatibility with technical, economic, and legal developments in its industry. The committee charges include studying licensees’ requests for exemptions from certain code provisions and submitting its recommendations to the Authority. They also include proposing changes to the code. Membership of the committee is composed of ECRA’s staff and licensees’ representatives.
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4-6-1 The Saudi Transmission Code
During the report year, the committee held four meetings during which it made twenty
recommended four exceptions from the code articles. The Authority’s Board accepted all recommendations.
In particular, the committee recommendations that were approved by the Board included eighteen recommendations regarding requests submitted by K.A.CARE to enable connection of the renewable energy sources to the Saudi National Grid. The Authority convened meetings and workshops that were attended by staff from K.A.CARE, the National Electricity Transmission Company NETC, and other relevant entities to study and examine the K.A.CARE requests, and review the methodology of making revisions.
4-5-2 The Saudi Distribution Code
The committee holds its meetings quarterly. During the report year, the committee convened four workshops to introduce the code. It also started work on translating the code into Arabic. Furthermore, the committee considered adding new articles to the code dealing with the quality of electric energy.
4-5-3 The Water Desalination Code
The committee held three meetings during the report year in which it reviewed and updated the database of the desalinated water transportation lines of SWCC and the other licensees. The committee also started working with a consultant that was hired by the Authority to prepare a regulatory framework for desalinated water. The committee’s work with the consultant covers development of detailed bylaws to implement the code and insure compliance with its provisions. The committee completed preparation of the general outline of a workshop that will be held in the
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5-1 Permits
To encourage investment in the electricity and water desalination industry, the
Authority issues permits to interested parties to allow them to commence preliminary
preparatory work (including feasibility studies, planning, and technical investigations)
before they start actual activities.
5-2 Licenses
The Electricity Law and the Charter of the Authority require that any person engaged in any of the following activities has a valid license issued by the Authority in order to legally conduct his activities in Saudi Arabia:
Generation, transmission, distribution, trading, retail, export or import of electricity;. Cogeneration or trading in cogeneration products; and Water desalination, its transportation to the points of distribution, or trading in desalinated water.
The objectives of the licensing process are to streamline the development of the electricity and water desalination industry and monitor the quality and reliability of the services which are of paramount importance to the consumers as well as to the national economy as a whole.
The Authority issues licenses and monitors licensees’ performance, and takes appropriate measures to enforce the provisions of the Electricity Law on violators of the license conditions as well as to enforce the requirements to protect the public interest.
The Authority also requires licensees to comply with technical, legal, and environmental protection requirements.
The licensing framework covers requirements and conditions for each type of license, details of rights, duties and obligations of licensees, and details of monitoring procedures. The Electricity Law and its Implementing Regulations require that all procedures and the basis of monetary charges be as transparent as possible.
Licenses are issued before the licensee commences construction work on the licensed activity.
LicensingChapter 5
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5-4 License Forms for New Activities
In 2014, tPrincipal Buyer’s license. It also commenced developing the Independent System Operator’s (ISO) license. Both of the two licenses are closely tied to the Development of the Electricity Industry Restructuring Plan that is being implemented by the
for approval in 2015.
5-3 Exemptions from Licensing
The Elecwithout a valid license from the Authority. The Implementing Regulations of the Law allow for exempting a licensee from the licensing requirement if the generation plant is not connected to a transmission network or a distribution network and all its output is exclusively used by the owner of the plant. The exemption also applies to a transmission network and a distribution network under similar conditions.
ECRA’s website (www.ecra.gov.sa) contains forms to request authorizations and licenses for activities in electricity generation, transmission, retailing, trading and distribution; as well as activities in cogeneration and water desalination and its transportation to the distribution points. The website also includes a listing of all licenses issued by the Authority, and the rules adopted by ECRA’s Board of Directors for calculating license fees.
At the end of 2014 the number of permits, licenses, and exemptions from licensing issued by the Authority are as shown in Table (3).
The Appendix contains details about about these permits, licenses, and exemptions.
Type ofDocument
IssuedWater Desalination
Cogeneration
Electricity
Activity Type
Permit
License
Exemptionfrom
Licenses
4
14
-
Generation
-
2
13
Transmission
-
2
-
Distributionand
WholesaleTrading Ownership of
TransmissionSystem
Production Transportation Trading
10
40
19
Total
-
2
-
-
1
-
-
1
-
-
3
-
4
9
5
2
6
1
Table (3): Summary of the Number of Permits, Licenses, and Exemptions from Licenses Issued by the Authority in 2014
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During 2014 ECRA’s activities included work on the following plans for the electricity and water desalination industry.
6-1 Implementation of the Electricity Industry Restructuring Plan
The Development of the Electricity Industry Restructuring Plan approved by ECRA’s Board outlines the major steps for unbundling the main activities of the electricity industry (i.e., generation, transmission, and distribution) and moving it from the current vertically integrated structure (Figure 8) into an environment of competitiveness on an economic basis through the following steps: Creation of an independent transmission company that maintains an open and unbiased policy of access to the transmission system for use by all producers and large consumers without discrimination. Creation of a special entity known as the “Principal Buyer”, to manage the electricity industry’s income, and enter into clear and transparent contracts with all service providers (in the areas of generation, transmission, and distribution), which are reviewed and approved by ECRA. The Principal Buyer is responsible for overseeing that all parties abide by the contracts. Designing a clear, transparent, and fair electricity “wheeling” tariff for the transmission system. Introducing competition in wholesale electricity services to the distribution companies and large consumers.
consumers.
Figure (8): Organizational structure of the current vertically integrated monopoly of the electricity industry in the Kingdom.
S di El t i it CSaudi Electricity Company(SEC)
Generation(SEC)
Generation(SWCC)
Generation(Other Entities)
Transm
Distribution
ersConsum
Electricity and Water Desalination PlansChapter 6
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Figure (9): Structure of the electricity industryafter completion of Phase I of the restructuring plan
implementation of the plan.
Through ECRA’s efforts in the past few years to pursue implementation of the plan, SEC established the National Electricity Transmission Company (NETC), a limited liability company wholly owned by SEC (the holding company). NETC commenced operations in 2012.
Saudi Electricity Company
IndependentGeneration
IndependentGeneration
IndependentGeneration
IndependentGeneration
IndependentGeneration
DistributionCompany
DistributionCompany
DistributionCompany
GenerationCompany
GenerationCompany
GenerationCompany
Transmission
Consumers Consumers Consumers
Cogeneration
Cogeneration
Cogeneration
Cogeneration
Cogeneration
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In spite of continued and persistent efforts by the Authority to pursue with SEC its compliance with the timetable of implementation of the various elements of the
obligations according to the plan's timetable. In view of this situation, it became imperative
conclusion of these meetings, ECRA and SEC signed a Memorandum of Understanding (MoU) on December 29, 2013. The MoU contained the company’s commitment to undertake the following actions:
Begin immediately taking administrative, financial, and legal steps to activate the National Electricity Transmission Company (NETC), and enabling it to become a fully operational entity in all aspects of financial, legal and operational matters. These actions are to be taken in order to permit NETC to assume all its responsibilities before the end of the Year 2015. Create an entity called the “Independent System Operator” (ISO) before the end of 2014. The ISO will be responsible for preparing the electricity system development plans, as well as operating the system. He will also be responsible for developing the control centers, and operating them. Create, within the SEC’s organizational structure, an entity called the “Principal Buyer” before the end of 2014. The Principal Buyer shall report directly to SEC’s President and CEO. He will be given sufficient administrative, financial, legal, and accounting manpower to enable him to assume full independence of his responsibilities and operations, in accordance with the license that ECRA will issue to him before the end of 2015. Commence immediately the processes of establishing four companies that will take over ownership and operation of SEC’s generation assets, in accordance with rules agreed upon with ECRA. Each of the generation companies will be fully operational and assume its full duties and responsibilities independently, with its own independent board of directors before the end of September 2015. Commence immediately the establishment of a distribution company which shall own the distribution networks all over the Kingdom, develop the system networks, and operate them. The distribution company will be fully operational and assume its full duties and responsibilities independently, with its own independent board of directors before the end of September 2015. This new company will prepare plans for its eventual breakup into several regional distribution companies in the same manner
the Electricity Lawcompany shall submit to the Authority its proposed plan of the breakup for approval before the end of September 2015.
The issue of implementation of the electricity industry restructuring plan is of paramount interest to the highest level of government authorities. On February 2, 2015, the Council
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of Ministers directed ECRA to “work with the Saudi Electricity Company in order to execute the contents of the MoU signed between the Electricity & Cogeneration Regulatory Authority and the Saudi Electricity Company on December 29, 2013.”
In spite of the clear tardiness in implementation of the restructuring plan and deviation from the agreed schedule, the Authority will continue to press SEC to insure its compliance with the directive of the Council of Ministers, and implement the plan in accordance with the schedule stipulated in the MoU.
With comwhich consists of unbundling the activities, will be completed. In preparation for this situation, ECRA undertook a study to develop a roadmap for transitioning the electricity industry to the electricity competitive market. The study included evaluation of the current status of the electricity industry, and the requirements of transition to the second phase of the plan. This phase involves permitting competition in the wholesale market, and establishing the parallel market. The study also included determining the necessary conditions for transitioning to the third (and last) phase of the restructuring plan, which is development of the competitive electricity market. The situation will then be characterized by the existence of several entities competing in generation, distribution and service provision to consumers (Figure 10). It will also be characterized by the presence of competition in retail, and the establishment of a spot market for electric energy trading, while at the same time a parallel market will continue to exist for supply and trade on a bilateral basis.
Regulator Generation
Generation
Generation
Generation
Generation
Competitive ElectricityMarket
RetailerRegularConsumers
RegularConsumers
RegularConsumers
Large Consumers
Retailer
Retailer
Retailer
Independent SystemOperator (ISO)
SystemOperator
Bilateral EnergyPurchase Agreements
Transmission
Market Operator
Figure (10): Electricity industry’s structureafter full implementation of the plan
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6-2 Long Term Plan for Water Desalination and Electricity Generation Projects, and Determination of their Fuel Needs
During the previous year, the Authority lead a team* to update the long term plan for water desalination and electricity generation projects, and determination of their fuel needs for the years 2016 to 2040.
The scope of the study includes determination of the demand for electricity and
transport electricity and desalinated water, and determination of the system’s fuel needs. The study takes into consideration all sources of energy, the most appropriate
fuel utilization, and minimizing environmental impacts of electricity generation and water desalination production. The plan also takes into consideration introduction of the atomic and renewable energy sources, and their impact on the existing plans using traditional energy sources.
The study will determine the share of each source of energy in meeting demand for electricity and water, the appropriate transportation means to minimize costs and enhance security of supply, the locations for building the new plants, and the most appropriate technology for each site of electricity generation or desalinated water production. These determinations will all be based on running economic analyses of various alternative scenarios.
During the report year the team continued its work on the study completing determination of demand for electricity and water. In this task, the team took into consideration projections of future growth of the economy and the population using top-down analysis, and looked into the impact of conservation programs on the demand curve.
The team also developed a database that lists all water production sources, water desalination and electricity generation plants, electricity transmission lines, and water transportation pipelines.
In the coming year 2015, the team will continue the work of updating the plan. It will undertake a study of end use patterns of water and electricity (See the following Section 6-3), which will provide detailed data about water and electricity end use patterns. Furthermore, it has developed mathematical models to select the optimum technologies for production of desalinated water and electricity generation. The outcome of this study will be used for updating the electricity and water supply plan, developing load management methods, and designing tariffs.
* The following entities participated in the team: Ministry of Petroleum and Mineral Resources, Ministry of Electricity and Water, Saline Water Conversion Corporation, Saudi Electricity Company, Saudi Aramco, and National Water Company.
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Work on this project is expected to be completed by the end of 2016.
6-3 Study of Water and Electricity End Use Patterns
In the context of the long term plan for water and electricity generation projects and determination of their fuel requirements, the need arises for accurate determination of their demand, as well as determination of the cost of providing these services to the various consumer categories. Carrying out these tasks requires undertaking studies to obtain detailed data concerning end uses of water and electricity in order to develop programs for their demand-side management and set their demand priorities.
The study aims to provide the following information:
Purposes of Using Electricity and Water:This includes proportions of use for the following purposes: yard washing, garden irrigation, and industrial purposes. Using electricity for lighting, air-conditioning, heating, and other uses.
Areas of Usage:To determine proportions of electricity and water use in cities, towns, villages, hamlets, and urban settlements.
Types of Use:To determine proportions of electricity and water use in residential areas, hotels, industrial plants, commercial establishments, and government buildings.
Time of Use:To determine the quantities of water and electricity use throughout the day; as well as weekly, monthly, and seasonal patterns.
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During 2013 the Authority created a work team* to undertake a study to determine the electricity and water end use patterns. The study seeks to obtain detailed information regarding the consumption patterns and trends in the various regions of the Kingdom. It will collect data through the use of accurate measurements of consumption as well as through development of mathematical and statistical models. The collected data will be used to predict future loads and develop programs for
During the report year, the team completed the scope of work for the study. The
cities of Riyadh, Jeddah, and Dammam. This phase was designed to develop measurement systems, and the statistical models that will be used in the second phase of the study, which will cover the entire Kingdom.
The study is expected to be completed in 2016.
6-4 Study of the Technologies of Combined Heat and Electricity Production
The continued growth of demand for electricity, creates a need for building new generation plants to meet this growth, which in turn necessitates higher consumption of fuels, thus increasing the level of local environmental pollution. Considering these factors, especially in the context of the long term plan for water desalination and electricity projects and determination of their fuel needs, it becomes imperative to
electricity and water desalination industry, whether from the supply side, or from the demand side.
The combined heat and power production technology is considered one of the
technology depends on the simultaneous production of electricity and heat from a single fuel source. Heat is then recovered from the combustion process in the generation units for use in some processes that have an added value.
For the reasons outlined above, the Authority began during the report year a study, in association with the entities participating in the long term plan for water and electricity (Section 6-2, page 58), to develop a national strategy to bolster use of a combined heat and power technology that is suitable for the electricity industry in the Kingdom.
technologies, and adopting optimum alternative technologies that aid in reducing
During the study, the Authority organized a number of workshops and meetings with
* The team includes a number of specialists from the Authority, and representatives from the following entities: Ministry of Petroleum and Mineral Resources, Ministry of Electricity and Water, Saline Water Conversion Corporation, Saudi Electricity Company, Saudi Aramco, and the National Water Company.
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* See Section 6-1 “Implementation of the Electricity Industry Restructuring Plan” page 54.
the stakeholders to collect their views and comments regarding the subject matter of the study.The following are the salient points of the study:
Evaluation of the available alternatives for the combined heat and electricity production technologies. Evaluation of the applicability of the various technologies in the Kingdom, and
Determining the various obstacles to implementation, and also determining the policies and regulatory framework that enhance overcoming those obstacles.
6-5 Study to Develop a Roadmap to Establish a Competitive Electricity Market
The third and last phase of the Electricity Industry Restructuring Plan* concerns creation of a competitive electricity market. This is the ultimate aim of the plan which is to liberate the electricity market from the dominant forces and insure achieving the required income for the electricity industry. Success in reaching this goal will enhance the ability to attract foreign and domestic investments in the electricity industry.
During the report year, the Authority signed a contract with an international consulting
market. The work also includes determining the structural changes that will be needed in the electricity industry's components and inputs in order to achieve the desired goal of a competitive electricity market. Such changes involve things like a fuel supply policy that includes setting its prices at levels that provide incentives for
electricity market also requires revising the tariffs and liberating them. These steps must be taken in tandem with direct government subsidies such that the electricity industry realizes a fair income that encourages continued investment, while achieving the government’s policy of directing subsidies to the deserving classes of consumers.
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One of ECRA’s main responsibilities is monitoring the performance of licensees to insure that the following objectives are achieved: Quality and reliability of service. Commitment of licensees to undertake the following: Compliance with the Electricity Law, and conditions and requirements of the licenses to protect the public interest. Compliance with technical regulations (such as the codes and manuals) issued by the Authority. Responding to consumers’ complaints and handling them in a reasonable time span. Reducing the number and extent of service outages. Expeditious restoration of service when outages do occur, and Continual investment to provide service to new customers.
In order to achieve these goals the Authority prepared key performance indicators (KPIs) and standards for every electricity activity which all service providers must meet at a minimum. A * based on the KPIs was also developed so that
penalties are assessed from those who underperform them.
In 2014, the Authority performed the following activities in the area of quality of service, and performance monitoring:
7-1 Auditing Licensees’ Performance KPIs
In the past few years, the Authority developed a system for the electricity industry’s performance KPIs that enables it to effectively monitor the performance of entities that have been licensed to work in the areas of electricity generation, transmission and distribution. The basic aim of these indicators is to determine the performance level that the electricity industry must reach in order for the service it provides to its consumers to rise to levels comparable to what is achieved in the industrially developed countries. Furthermore, these KPIs will have technical and regulatory importance once the competitive electricity market is established.
* The has not been activated yet.
Service Quality and Performance MonitoringChapter 7
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During the report year, the Authority audited the performance KPIs data for 2013 at
The Authority selected twenty six performance KPIs for the various electricity industry activities (generation, transmission, distribution, customer service).
The Authority issued reports on the results of auditing. The reports contained recommendations to improve those activities whose performance levels were less than the minimum acceptable.
The reports were sent to the licensees. They were directed to implement the recommendations for improving the process of KPI calculations. The auditing results were also published on the Authority’s website.
The Authority reviews the licensees’ compliance with the recommendations during the annual auditing to insure their implementation.
ECRA will continue annual auditing of data for the various sites for the purpose of
formulated, the data collection methodologies, and the KPIs calculations.
In general, there were noticeable improvements during the report year in the licensees’ processes and procedures for calculation of the KPIs. These processes and procedures included various aspects such as assigning responsibilities, providing the needed
The results of auditing of the performance KPIs varied between the licensees. Some
SN
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Total Number of Sites Visited
Number of Sites
2155
1
1217
Licensed Entity - Licensed Activity
SEC – GenerationNational Electricity Transmission Company – Transmission
SEC – Distribution
Power and Water Utility Company for Jubail and Yanbu (MARAFIQ) – Customer Service
Saudi Aramco – GenerationSWCC- Generation
SEC – Customer Service
Table (4): Sites where electricity industry activities performance KPIs were audited
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SWCC
Ava
ilabi
lity
Fact
or (
%)
SEC
(Sim
ple C
ycle)
SEC
(Ste
am C
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SEC
(Com
bine
d Cy
cle)
MA
RFIQ
(Sim
ple C
ycle)
MA
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(Com
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2010 2011 2012
Target(Minimum 85%)
100%
90%
95%
80%
85%
70%
75%
60%
65%
2013
Figure (11): Results of measurements of the availability factor of the generation system for the years 2010-2013
* The availability factor of a power plant is the amount of time that it is able to produce electricity over a certain period, divided by the amount of the time in that period.
** At the present time, there are three types of electricity generation plants in the Kingdom:Simple Cycle Plants:the fuel is used to turn the turbines. The advantage of this type of plant is the ability of the generator to reach its maximum capacity quickly after start. Thus, this type is used usually to meet peak demand.
35-45%.Steam Cycle Plants: A type of generation plant where fuel is used to turn water to steam. The steam is then used to turn the generation turbines.Combined Cycle Plants:is recycled and used to run a steam turbine to generate electricity (the second cycle). This type of plant has a higher rate of fuel
the true meaning of some KPIs, incomplete data, lack of raw data records, and similar
through its directives that are issued to them during the annual KPIs audit and review process.
Figure (11) shows results of measuring the availability factor*, which indicates the availability of licensees’ generation plants** to generate electricity during the years 2010-2013.
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Figure (12) indicates results of measuring the average time it takes to provide electricity service connection to new consumers in a number of major cities and regions in the Kingdom in the years 2011-2013
In order to improve this indicator and encourage the service provider (SEC) to minimize the service connection time, the Authority undertook a number of regulatory actions that were included in the revised edition of the “Provision of Electricity Service Manual” (Section 4-2, page 44). The actions also included adoption of the service connection agreement which delineates the duties and responsibilities of the service provider and the consumer. The Authority expects
connection times.
Bah
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Target30 work days(Maximum)
Figure (12): Results of measurements of the KPI of average electricity service connection to new customers
in the years 2011-2013
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Figure (13) shows the average time of electricity outage (in minutes) for each client of SEC in the main regions and cities of the Kingdom in the years 2010-2013.
As is shown in Figure 13, there is a slight improvement in continuity of the service provided to consumers Kingdom-wide, while in the Jazan and Al-Jawf regions the improvement is substantial. Nevertheless, the level achieved in many areas is far below the desired target of a maximum of 150 minute per year.
2010 2011 2012 2013
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awad
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Riy
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Reg
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Riy
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Ave
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in th
e K
ingd
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Figure (13): Comparisons of average time of electricity service outages per consumer annualy for the years 2010-2013
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Figure (14) illustrates the average number of outages per consumer per year during the same period.
2010 2011 2012 2013
0
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Num
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of I
nter
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Bah
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adh
Reg
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Ria
ydh
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Ave
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Kin
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-wid
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TargetTwo (2) outages per year
(Maximum )
Figure (14): Average number of electrical service outages per year per consumer for the years 2010-2013
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Figure (15) shows the average time of outages per year for the transmission network licensees for the years 2010-2013.
index increases, the lost power increases due to outages in the various components
service decreases. A decrease in the value of the index signals improvement of the service.
variation of the service performance level between regions. To overcome this
with SEC implementation of the projects, programs, and procedures for enhancing reliability of the electricity network in the Kingdom as described in the following section.
National Transmission CompanyMARAFIQ
Out
age
Tim
e
0
10
20
30
40
50
60
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80
2013201220112010
(Min
utes
)
Figure (15): Average time of outages per year for the transmission network licensees for the years 2010-2013
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7-2 Plan for Enhancing Reliability of the Electricity Network
To insure provision of secure and reliable electricity service, the Authority formed a work team* to draft a plan to enhance reliability of the electricity network in the Kingdom, particularly in the areas where the performance KPIs indicated that the service level was inadequate.
e the possible areas of improvement, the team carried out the following tasks: Statistical AnalysisWhich included the following:
Reviewing the KPIs data, and analyzing them statistically. Reviewing the outages reports, and determining their recurring causes. Determining the worst performing regions and sites.
Evaluating Network AssetsWhich included the following:
Reviewing maintenance procedures and volume of work.
Studying the Methods of Network Operations and Operational RequirementsWhich included the following::
Reviewing the control centers procedures and outages response. Reviewing the protection system. Meeting the responsible staff. Studying adequacy of the required manpower and equipment.
Reviewing Methods of Network PlanningWhich included the following:
Method of demand forecast and load control. Standards of planning, security of supplies, and emergencies. Replacement and assets life-cycle policy. Evaluation and execution of new projects.
Analysis of outages data showed that over 50% of the outages times were attributable to about 500 feeders that connect the distribution substations with the consumers. This number of feeders represents about 5% of the total number of feeders in the SEC network, i.e. 5% of the feeders cause more than 50% of the outages.
* The team consisted of a number of experts from ECRA, and representatives from the Ministry of Water and Electricity, SEC, and National Transmission Company (NTC). .
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The team completed drafting of the plan which included a number of administrative and technical recommendations to be implemented by SEC and the National Electricity Transmission Company.
The plan reco
Firstly: Recommendations to Improve Administrative Procedures, Resource Management, and Supervise Contractors
These recommendations do not require large capital investments because they are of an administrative nature and include:
performance.
Reviewing the procedures and requirements of resource planning. Determining the required manpower for supervision of projects. Management of materiel and in-store inventory auditing. Development of electricity networks inspection processes and their
automation.
Secondly: Recommendations Related to Management of Scheduled Outages and
These recommendations include: Using mobile generators to shorten the outage times. Increasing coordination between various company departments to carry out
maintenance, improvements, and new connections jobs, in order to reduce the number of scheduled outages.
Advising subscribers in advance of the timings for scheduled outages.
Thirdly: Recommendations for Review of the Protection Systems, and Connection Points between Transmission and Distribution Networks
The study demonstrated the importance of reviewing the overhead distribution network protection system, expediting installation of autoreclosers and sectionalizers, and training personnel to use them properly.
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It is expected that these recommendations will contribute to reduction of outages resulting from transient causes.
Fourthly: Developing Regulatory Standards and Policies that Serve as a Basis for Building of Plans
The study showed the need to develop standards for supply security that take into consideration reliability of the electricity network. It also showed the need to include these standards in the transmission and distribution codes, and monitor compliance with them. Furthermore, the study emphasized the importance of developing a clear policy for replacement of old equipment.
One of the plan requirements is submittal of periodic reports to the Authority regarding implementation of the recommendations. This requirement is set within a monitoring framework that was designed to insure implementation of the recommendations as well as monitoring the level of improvements of performance KPIs of the electricity service provision.
Immediately upon completion of drawing up the plan, the Authority held a number of meetings with SEC and NTC to move forward on implementing the recommendations contained in the plan.
During the report year, SEC and NTC undertook the following measures: Implement expedited actions to remedy the worst performing feeders. The actions included surveying the feeders, inspecting and maintaining them, and including them in improvement projects. Reducing the number of subscribers connected to each feeder to a maximum of one thousand subscribers per feeder. Organizing a number of workshops in the various SEC business regions to implement or draw up procedures and programs for implementation of the plan recommendations. Submit preports periodically to the Authority outlining the actions taken to implement the plan recommendations
The Authority is carefully monitoring, through analysis of the performance KPIs, the steps taken by the two companies to implement the plan.
7-3 Review and Development of the Major Performance KPIs in the Kingdom
In 2009 the Authority commenced annual auditing of the licensees’ performance KPIs. During the years since then, actual auditing practices highlighted a number of observations regarding the KPIs. Consequently, the Authority decided to engage
framework of the KPIs.
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current regulatory framework. It includes the following:
for the licensees’ technicians to classify the events that are related to KPIs. This will increase accuracy of the KPIs calculation process. Review the KPIs objectives in order to compare the major cities to the remote villages, and the summer season with the other seasons. performance KPIs manual as
well as in the auditing process, incentives, and KPIs targets.
The review process aims also at adding new activities that are not covered by the current regulatory regime, such as: Health, safety, and environmental KPIs. Guaranteed standards to the individual consumer, and any compensation that may accrue to him as a result of failure of the service provider to adhere to a certain service performance KPI. KPIs for load management programs, and smart meters installation.
Execution of the study commenced by collecting data, and holding meetings between the specialists of ECRA and the consultant. A number of international practices in the subject area of the study were discussed in these meetings. The study tasks included also organizing workshops with the licensees specialists to discuss possible outcomes, and proposals for the current KPIs. These activities were held in preparation for ECRA’s adoption of the changes, and development of new KPIs for the activities that are not currently covered by the regulatory regime.
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7-4 Development of Strategy for Smart Meters and Smart Grids in the Kingdom*
During 2013, the Authority developed a national strategy for smart meters and smart grids. The salient outcomes of the study were as follows: Determining the challenges facing the electricity industry in the Kingdom and the role smart grids and smart meters play in overcoming these challenges. Reviewing the available smart meter and smart grid technologies in order to evaluate their suitability for the Kingdom’s electricity industry and consumers. Determining the basic functional requirements of smart meters for use in the Kingdom.
The strategy was built to achieve four main purposes: Improving the reliability of the network and the quality of service, increasing the
Reducing complaints arising out of issuing the electricity bills, issuing them in a timely manner, and reducing the costs of reading more than seven million meters monthly. Enabling the renewable energy sources, and facilitating their integration into the electricity system. conservation of electricity consumption.
* The Study for Development of a Strategy for Smart Meters and Smart Grids can be viewed on ECRA’s website: http://www.ecra.gov.sa/documents/Studies/Strategy%20Report_FINAL.pdf
The Regulator
National Economy Service Providers
Consumers/GenerationOperators of Transmissionand Distribution Networks
Variety of generation
Development of smart industry
Enhancing innovation
Reduction of operational costsDecrease in energy lossesOptimum management andcontrol of the network
Development of the electricity industry
Increasing reliability of the electricity grid
Provide information
Enriching consumer experience
Variety of services
Reduce interruptions
Multiplicity of choices
Effective consumption management
(16). Results of the study carried out by ECRA during preparation of the strategy indicated that implementation of the strategy has a high economic return resulting from
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There are asystem operation due to activation of the opportunity of load shifting during peak times. This contributes to reducing the demand for increased generation capacities, saving fuel, enhancing the opportunities to export electricity to the outside markets, and reducing
implementing the strategy at over SR100 Billion, while the costs are estimated at not more than SR12 Billion.
The strategy included a roadmap consisting of four phases to be implemented in the next decade.
Phase I:This phase begins by formation of a supervising committee composed of members from the interested parties. The committee will be responsible for monitoring progress of
completed works, proposing corrective measures, and developing technical work groups capable of managing the project.
Phase II:This phase deals with creating the designs and completing the pilot smart meters installation projects.
Phase III:This is the phase that precedes launching of installation of smart meters throughout the Kingdom. Groups of meters will be installed in remote areas and towns where the infrastructure will be tested and the load shifting program will be activated.
Phase IV:Complete installation of smart meters and smart grids throughout the Kingdom.
During the report year, the Authority organized a number of meetings with SEC to adopt
national strategy for smart meters and smart grids. The Authority also studied the obstacles
overcome them. It also updated the inputs and outputs of the study on which the strategy
Also during the report year, Phase I of the roadmap was implemented, which included constituting the supervising committee* to oversee implementation of the strategy.
* The supervising committee for implementation of the national smart meters and smart grids strategy is chaired by the Ministry of Water and Electricity, and includes in its membership representatives from ECRA, the electricity service providers, the Communications and Information Technology Commission, King Abdul Aziz City for Science and Technology, and Saudi Aramco.
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In 2014, the Authority carried out a number of activities to publicize and inform the public about its efforts to insure achievement of the objectives for which it was created. The focus of these activites was to disseminate information about the Authority’s responsibilities which include protection of the public interest, promotion of the electricity and water desalination services with particular emphasis on customer care and protection of his interests, encouraging participation of the private sector investors in the development of the electricity and water desalination industry, and creation of a suitable environment that encourages legitimate and fair competition between producers of the electricity and water desalination industry services as well as between the providers of these services.
The Authority’s sctivities in this area in the report year included the following:
8-1 Second Publicity Campaign to Inform Consumers about their Rights and Responsibilities
During the report year, the Authority carried out a second publicity campaign to inform members of the general public about their rights vis-à-vis service providers and their responsibilities towards them. The campaign ran under the slogan: “We work for you….and we protect your rights”. It emphasized the following aspects:
Insuring that the consumer obtains his rights. That the data contained in the electricity bill is clear and accurate. The means of communication with the Authority in case of dispute with a service provider. Following certain procedures that facilitate continuity of service.
The campaign messages were carried by radio and TV stations, traditional and
electronic publications, social media sites, and mobile SMS messages
8-2 The Electronic Bill Pamphlet
The Authority is keenly interested in developing the electronic services it offers to all classes of electricity consumers. It also aims to educate them about the electricity bill and provide them with details about these bills which are issued by the service providers (SEC and MARAFIQ). In this regard, during the report year, it issued a pamphlet explaining how to take advantage of the electronic bill program, (available on ECRA’s website, www.ecra.gov.sa), to verify the bill amount. This is done by entering the consumer’s monthly bill data as issued by the service provider. The program calculates the correct amount, and gives the consumer further information that helps him to understand the extent of the services he receives, and the high cost born by the government in order to provide a high quality and reliable electricity
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service at reasonable prices. The program also helps the consumer to identify his “consumption thumbprint”, a new and remarkable service among international energy regulators. The service includes providing advice to the consumer in order to
the amount of money he can save by changing his consumption patterns
8-3 Social Media Sites and the Internet
During the report year the Authority registered its account with Twitteraccount under the sign (@Saudi_ECRA). Registration provides full protection from Twitter.com against any security breach by hackers. It also makes it easy to reach the account by searching the internet either through Twitter, or through any other search engine.
The Authority also set up an account with FacebookThis was done to provide another channel for communication between the Authority and members of the public, and to provide its followers and interested parties with news and information about its activities in the various areas of its responsibilities.Furthermore, the Authority established a page for itself on Wikipedia in both Arabic and English. The page contains information about the Authority's objectives, areas of responsibilities, and other information,
8-4 The Electricity Industry Statistical Yearbook
During the report year, the Authority published the sixth edition of the Electricity Industry Statistical Yearbook.
This editiaspects of the electricity and water desalination industry in 2014 as well as comparisons with previous years. The booklet also includes detailed information about the peak loads, and important economic indicators such as consumption index and comparisons with other countries.
The data and information contained in the booklet help interested persons locally, regionally, and internationally to obtain accurate and up-to-date information about the electricity and water desalination industry in the kingdom, and its progress
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8-5 Participation in Exhibitions held Concurrently with other Activities
In 2014, the Authority participated in three exhibitions that were held in conjunction with other activities by having kiosks where publications were displayed and
was always present in the kiosk to answer visitors’ queries. The activities were: program, It was held in Al-Ahsa from 20 March to 18 April, 2014, and in Riyadh from 29 July to 28 August, 2014. The Tenth Saudi Exhibition for Electricity and Water held in Dhahran from 13 to 15 May, 2014. The Smart Electricity Grid Conference held in Jeddah from 14 to 17 December, 2014.
8-6 Media Interviews
Within the framework of the Authority’s efforts to disseminate information about its responsibilities to regulate the electricity and water desalination industry, it interacted with various media outlets and organizations by holding TV interviews to answer questions raised by members of the press corps or the general public.
The most important of these activities were: An interview with the Authority’s Governor broadcast on February 11, 2014 by CNBC channel on its program “The Business Session”. An interview with the Governor broadcast on February 14, 2014 by Saudi TV Channel Al Eqtisadiah on its program “ A Guest and an Issue”. An interview with the Governor broadcast on May 19, 2014 by Saudi TV Channel One on its program “Decision Maker”. A phone interview with the Governor broadcast on May 27, 2014 by the privately owned TV channel Al-Arabiah. An interview with the Governor broadcast on July 13,2014 by CNBC channel An interview by phone with the Governor on September 10, 2014 broadcast by the Saudi Jeddah radio station.
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9-1 The Work Environment
The Authority has a keen interest in developing a suitable work environment for its
The interest includes caring for the physical environment of the workplace, creating a spirit of working as one-team, and keeping communication channels open at all levels of the organization. It also includes caring for the emplyees’ personal affairs that may impact their job performance.
The Authority had previously coordinated with the Ministry of Labor regarding development of a program that facilitates using funds available in the employees penalties account for giving needy employees small interst free loans or, in some
functions.
In 2014, the maximum loan limit per employee was increased to SR65,000. Since the start of the programs, 62 employees took advantage of it, receiving loans totaling SR2,222,440.
Throughout the report year, the Authority organized several social and recreational
coordination with the blood bank at King Faisal Specialist Hopital & Research Center, it also organized a blood donation campaign, where a mobile unit was brought to ECRA’s headquarter building to collect the blood donations.
Human Resources and Financial AffairsChapter 9
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The Authority arranged with the Ministry of the Interior to have a representative of “Absher”, a program to provide the Ministry’s services to the public electronically,
Furthermore, the Authority developed during the year an intreset-free loan program for its employees, where the loan is secured by the amount of end-of-service remuneration accrued by the employee at the time of loan application.
9-2 Training and Scholarships
In the context of the Authority's special attention to human resources development, each new employee recieves a program that is designed to inform him of the Authority’s approach to work. In particular, the “Employee Manual” contains important information about the employees responsibilities, rights, and the work procedures. Selection of the training program depends on the nature of the employee's job, and the program is executed according to a systematic plan that indicates his actual training needs.In 2014, 77 employees participated in various short training programs, while two employees were sent abroad for training programs of long duration.
The Authority also provided many of its employees with the opportunity to pursue high school education, undergraduate studies at Saudi universities, and graduate studies leading to master’s degrees at Saudi and foreign universities. By the end of
were still in it.
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9-3 Human Resources Development Project
The project to develop human resources policies and procedures was completed during the report year. Its scope included the following: Reviewing the organization chart of the Authority, and proposing appropriate
each department; and determining its manpower needs.
Analyzing all existing positions, developing career paths, tying the career paths to training, and designing a plan for staff replacement and succession. Comprehensively analyzing the capabilities of the existing staff, determining their training needs, devising a comprehensive training plan, reviewing the implementation mechanism, and measuring the return on training. Reviewing the procedures for employee evaluations and the evaluation forms; the promotions procedures currently in use, their requirements, and their forms. Reviewing the incentives and allowances, and proposing appropriate changes. Developing human resources manuals.
9-4 ECRA’s Budget
According to Articlelicensing remuneration, payments received for services rendered to service providers
The licensing remuneration is set by rules adopted by the Board of the Authority. The
the licensee (cogeneration, generation of electricity, its transmission, distribution, or trading; and water desalination, its transportation, or trading), the relative contribution
Table (5) shows comparisons of the Authority's income in 2014 with that of the previous year, while Table (6) shows the comparisons of its expenditures.
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(Amounts in thousands of Saudi Riyals)
Source of Revenue 2014 2013
75 566 73 570Saudi Electricity Co (SEC).
National Transmission Company 33 079 31 538
Saline Water Conversion Corp (SWCC). 12 574 11 784
Tihamah Energy Generation Ltd. Co. 1 131 1 103
Saudi Aramco 1 122 1 138Rabigh Arabian Water & Electricity Co. 1 108 1 070
Jubail Power Co. 231 227
MARAFIQ 3 213 1 956
Shuaibah Water and Electricity Co. 2 684 2 617Shuqaiq Water and Electricity Co. 1 229 1 210Jubail Water and Electricity Co. 3 871 3 802
Saudi Cement Co. 178 196Bawarij International Water Desalination Ltd. Co. 97 94
Power Energy Equipment Rentals Co. 77 49
Shuaibah Expansion Project Co. 292 282
Water and Electricity Co., Ltd. 649 590
Water and Electricity Supply Co. 903 853Rabigh Electricity Co. 1 056 572
General Contracting Co. (Al-Olayyan) 83 105Abdul Aziz and Abdullah Kanoo Co. 40 38
Energy Alternative Solutions Co. 64 55
Rakaa Energy and Water Co., Ltd. 5 3Twairqi Energy Co. 50 50
Nour Energy Co. 12 8Dharma Company for Electricity 1 405 0
Modern Aman Electrical Energy Co. 47 0
Total 140 766 132 910
Table (5): Revenue comparison for 2014 with the previous year
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9-5 The General Reserve
The Authority's charter permits it to retain a reserve equal to twice its expenditures for the preceding year. At the end of 2013, the accumulated value of the cash reserve held by ECRA reached SR 107,566,060.00. In addition, there is a special reserve for the costs of building the Authority’s permanent headquarters in which SR80,000,000.00 were accumulated by the end of 2014.
2014 2013
Approved ApprovedExpenditure
44 844 44 060
Social security 3 835 3 806
End of service remuneration 3 727 3 553Health insurance 4 553 3 949
Training and scholarships 2 595 2 654
Studies and consultations 21 617 18 425
Other Operational expenses 22,912 23,351
Capital expenses 6,955 3,615Allocation for the permanent
headquarters building 20,000 20 000Amounts refunded to
some licensees 9,725 9,725
Total expenses 140,763
ActuallySpent
ActuallySpent
39 387
3 755
3 5023 5802 517
17 147
19,458
2,775
20 000
9,725
121,846133,128
41 964
3 613
3 5294 2691 984
20 173
20,923
6 543
20 000
9,725
132,723
(Amounts in thousands of Saudi Riyals)
Table (6): Comparison of approved budget allocations and actual expenditures
in 2014 with the previous year
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10-1 IT Plan and Restructuring
During the report year, the Authority completed development of a strategic plan for information technology. The plan included a new mission, objectives, and initiatives. Based on the plan, the IT department was restructured. The restructuring process included the following: Redesigning of the organizational structure of the department based on best practices, and reshaping the roles and responsibilities in this structure.. Establishing three sections as follows: e-Business, Systems and Networks..
Each section is composed of several units. Establishing a Service Desk to be a single-point of contact for receiving IT requests and following up on their execution. Developing an IT Service Catalog, which contains about 78 service cards. Each card contains details of a particular service such as: name of the service, its description, the unit responsible for it, its user, the policies and procedures governing it, and its KPIs. Developing general policies for information security. Developing a procedure for IT purchase requests. Developing other IT manuals.
10-2 e-Business Development
In the e-Business area, ECRA worked during 2014 on the following activities: Upgrading the Email Exchange system. This resulted in doubling the capacity and performance of the e-mail service. Commencing a project for a new Correspondence Tracking System to replace the existing one. The new system offers new features and enhanced capabilities. The initial stages of the project have been completed and it is expected to be launched
Starting a new study to assess the current ERP implementation and the possible alternatives for upgrading it either by moving to edition 12 of the Oracle Database, using cloud computing alternatives, or moving the systems to cloud servers. The
productivity. The study is expected to be completed in 2015.
e-Business and IT
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Tripling the Internet bandwidth. This action contributed to overcoming the service bottlenecks experienced previously, and improved the overall service. Installing a backup power line for the Data Center to minimize the effects of power outages and protect the server farms from possible damages.
10-3 ECRA Website and Portal Project
During the report year, a team was formed to study development of a new website and e-Services Portal. The e-Services portal will offer all ECRA services electronically
project requirements and the bidding process. It is expected that the project will be launched in 2015.ECRA has also moved its website to an external hosting company to enhance the security, availability, and performance of the website.
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10-4 Business Intelligence Initiative
The Business Intelligence (BI) initiative aims to develop an integrated platform for data management related to the electricity and water desalination industry in the Kingdom. Availability of this data is a crucial element in decision-making.
A team was formed during the report year to develop the project requirements and
is expected to start in 2015.
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11-1 Glossary of the Body of Knowledge on Infrastructure Regulation
In cooperation with the Public Utilities Research Center (PURC) of the University of Florida, USA, the Authority undertook to translate into Arabic the Glossary of the Body of Knowledge on Infrastrucutre Regulation that was developed by the center.
The document contains most of the technical terms dealing with operation,
translation.
PURC is in public utility management and regulation. It cooperated with regulators in several countries to translate the document into the world's major languages and publish it on the internet for use as reference by researchers, students, and workers in this
Translating the document into Arabic is undoubtedly an important step in transferring knowledge to the Arabic speaker and making the Arabic language a vehicle for adopting modern science and technology.
In 2015, the translation was completed and the Glossary was loaded on PURC’s website, /regulationbodyofknowledge.org/new-translated-glossaries/, where it is available to the public worldwide.
11-2 Cooperation with Regional and International Organizations
ECRA is a founding member of the Gulf Electricity Regulators Forum, and the Arab Electricity Regulators Forum, which is under the umbrella of the Arab league. During the report year, the Authority continued its active participation in the activities and meetings of these two organizations.
ECRA has also been, since 2009, an associate member of the Energy Regional Regulators Association (ERRA), which encompasses the energy regulators from Eastern Europe and Central Asia. During the report year, the Authority continued its participation in the meetings and activities of ERRA. It also sent a number of its staff to attend workshops and training programs organized by ERRA. This was done in order to take advantage of these highly specialized programs, and gain knowledge about international practices and experiences in the area of energy regulation.
* Public Utilities Research Center.
** Energy Regional Regulators Association.
Other ActivitiesChapter 11
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11-3 Cooperation with King Abdul Aziz City for Science and Technology (KACST)
In 2013, the Authority signed a memorandum of understanding (MoU) with King Abdul Aziz City for Science & Technology (KACST) to promote cooperation in the
disseminate them to the largest number of experts. The cooperation is to concentrate
electrical energy system.
During the report year, a joint study was commenced to evaluate the quality of the electricity service in the Kingdom, determine its weak points, and develop recommendations and programs to improve the quality.
The Authority is a member of the executive committeee of the Saudi Energy (SEEC). The center is resposible for coordinating national efforts
enhance conservation of this important national resource, bolster development of the national economy, and assist in achieving a lower level of average per capita energy consumption in the Kingdom.
During the report year, the Authority continued its active participation in the working groups that were formed by the Center to formulate and implement programs to improve energy consumption in buildings, land transportation, and industry sectors. Studies have shown that these sectors consume around 92% of all energy consumed in the Kingdom.
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PART III
REPORT OF
THE ELECTRICITY INDUSTRY
DISPUTE RESOLUTION COMMITTEE
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Dispute resolution is one of the important responsibilities of ECRA. Disputes include consumer complaints against service providers as well as disputes among licensees. In all cases the policy of ECRA is to resolve the dispute through negotiation and mediation between the parties. If the mediation effort does not lead to satisfactory resolution, the dispute is referred to the Electricity Industry Dispute Resolution Committee.
In accordance with the Electricity Law, the Electricity Industry Dispute Resolution Committee is an entity independent of ECRA, formed by the Council of Ministers. It consists of six members: three legal experts, two experts in the electricity industry,
1-1 Composition of the Committee
On November 9, 2006 the committee was constituted by CMD 211 as follows: Dr. Mohammad A. M. Marzoogi Chair Dr Samir A. H. Al-Baiyat Member Mr. Youssef M. A. Al-Mubarak Member Dr. Anwar H. A. Mufti Member Mr. Fahad M. S. Al-Issa Member Dr. Ayoub M. A. Al-Jarbou Member
The terms of service for the committee chair and members were renewed twice, each time for three years, the latest renewal being on 3 September 2012.
1-2 Jurisdiction of the Committee
Article Thirteen of the Electricity Lawrule on the following: Disputes, complaints, and violations arising in the electricity industry. Disputes among and between licensees. Disputes between a licensee and one or more consumers. Any violation of the Electricity Law, its Implementing Regulations, or the Charter of the Authority.
The committee exercises its charges without prejudice to any other means of dispute resolution indicated by the agreements in force between the parties to the dispute.
It should be noted that although the committee's jurisdiction includes ruling on disputes between ECRA and licensees, the Electricity Law allows for settling such disputes through arbitration.
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Article Fifteen of the Law outlines the penalties that may be imposed on violators of its Articles, its Implementing Regulations, or the Charter of the Authority. Article Fifteen also gives ECRA the authority to place the activities of any violator under guardianship, but such action must be submitted urgently to the committee within a period not exceeding thirty days.
1-3 Modus Operandi of the Committee
The Committee, in considering cases submitted to it, follows a written memorandum form of litigation whereby each party is provided with copies of the memoranda and documents submitted by the other party. The defendant is then requested to submit his response prior to the committee session in which the case is to be considered. During the session all outstanding issues are addressed and closing arguments are made.
The Electricity Law covers certain important aspects of the modus operandi of the committee. Article Thirteen states that decisions are taken by a majority of votes, and in the case of a tie the side with which the chair votes carries. The article also mandates that the reasoning for all decisions must be stated, that decisions must be read in public sessions, that the committee shall not refrain from making a ruling on grounds of the absence of textual statements under the Law covering the dispute at hand, but must in such cases refer to the common law of the Kingdom.
The Law subjects decisions of the committee to review by the Court of Cassations. Anyone subject to a ruling by the committee may appeal the ruling to the Court of
The Law states that the bylaws of the committee are to be issued by ECRA's Board. They were indeed issued as Appendix (1) to the Implementing Regulations of the Electricity Law pertaining to the Duties of the Authority by Board Decision Number 3/11/27 on 15/4/1427AH (13/5/2006).
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2-1 Cases Received by the Committee:
The Committee considered the cases received during 2014 as well as cases pending from the previous year, a total of 218 cases as follows:
2-1-1 Cases on the Docket from Previous Years
The cases pending from 2013 were 117. The committee ruled on all of them except for 11 cases which were still under consideration.
2-1-2 Cases Received by the Committee in 2014
In 2014 the committee received 101 cases. It issued rulings in 36 of those cases, while some of the 65 remaining cases are in advanced stages of adjudication pending issuance of rulings, and the others will require some time to complete submittal of documents and hearing arguments of litigants in order to reach rulings.
Table (7) shows the status of the cases considered by the committee in 2014.
Category
Violations Related to theElectricity Industry
0 4
Disputes Related to theElectricity Industry 47 138
Total 47
0
29
29 142
4
214
218
Number of Cases
Underreview Closed TotalIn chamber
Activities of the CommitteeChapter 2
Table (7): Cases on the docket of the Committee in 2014
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Fiscal Year
2013 2112014 218
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142
Number of CasesUnder Cosideration Finalized
2-2 Comparison with the Previous Year Cases Received by the Committee and Cases Resolved
Table (8) shows comparisons with the previous year of the number of cases received
Table (8): Number of cases received by the Committee and the
previous year
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III
2-3 Analysis of Cases by Type of Complaint
An analysis of the cases received by the committee in 2013 and 2014, reveals that
Type of Request
Payment of rent for using real estateproperty for electrical equipment
Removal of a distribution lineEminent domain action to provide routing
for electrical lines and equipmentCompensation for damages resulting from electrical equipment.
Relocation of a distribution lineCompensation for mental and psychological anguish
51
22
24
9132
43
19
14
1589
94
41
38
242111
Relocation of a transformer/electrical box 4 5 9Compensation for failure to connect electricity service 4 4 8
Compensation for disconnection of electricity service and damages resulting from this action 3 5 8
Connecting electricity service 4 3 7Canceling charges added to the electricity bill 3 3 6
Refund of an amount paid to the service provider 2 3 5Oblige a consumer to pay for consumption costs 0 5 5
to follow approved procedures 1 4 5
3 3 6Transfer of a transformer station 2 2 4Removal of an electrical room 2 2 4
0 4 4Relief from payment of delinquent consumption costs 2 2 4
Compensation for drop in real estate property value dueto presence of electrical equipment on the premises 0 3 3
Objection to enforcement of the obligation toprovide a site to house electrical equipment 3 0 3
Relocation of a buried cable 1 1 2Relieve from payment of penalty for meter tampering 0 2 2
Recalculation of the amount of electricity bills 1 1 2Compensation for damages sustained
from exposure to electrical current 0 2 2
Granting an additional meter 0 1 1Paying the service provider for supplying electrical equipment 0 1 1
Rescinding a Committee decision 1 0 1Revaluate the value of property subject to eminent domain action 1 0 1Relieve from payment of penalty for cutting an electricity cable 0 1 1
Paying the licensee for supply of electrical equipment 1 1 2Voiding a license to build a substation 0 1 1
Plea not to consolidate consumption of several meters in one bill 1 0 1Increase the capacity of a circuit breaker 1 0 1
2014 2013Year
Total
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PART IV
THE ELECTRICITY AND WATER
DESALINATION INDUSTRY IN 2014
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The Saudi electricity system is the largest in the Arab world, where peak load in 2014 reached 56,547 MW. The following is a brief description of this system.
1-1 Generation
Generation capacity by the licensed entities in the Kingdom in 2014 reached 76,839 MW. Of this total capacity, SEC owned 71%, SWCC 6%, and ownership of the remainder was distributed among several licensees as shown in Table (10).
* Cogeneration plants only.
** This total represents the nominal capacities as per the licenses. The total of the available capacities was 56,506 MW.
Producing Entity No. of plants Capacity (MW)
47 54,717Saudi Electricity Co. (SEC)
6* 4,762Saline Water Conversion Corporation (SWCC)
1 3,415Hajar Electricity Co.
1 2,875Jubail Water and Electricity Co.
8 1,927Saudi Aramco
1 1,756Dharma Electricity Co.
1 1,191Shuaibah Water and Electricity Co.
4 1,083Tihamah Power Generation Co.
1 1 589Power and Water Utility Company for Jubailand Yanbu (MARAFIQ) - Yanbu
1 1 020Shuqaiq Water and Electricity Co.
1 1 320Rabigh Electricity Co.
1 600Rabigh Water and Electricity Co.
2 227Saudi Cement Co.
1 250Jubail Power Co.
1 73Twairgi Power Co.
3 18Aman Modern Energy Co.
1 16Al-Obaikan Paper Industries Co.
Total 81 76,839**
The Electricity and Water IndustryChapter 1
Table (10): Runtime capacities of generation units of licensed entities
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Figure (17) shows the distribution of generation percentages between the licensed entities.
Figure (18) shows distribution of generation capacities in the four SEC* business sectors.
* SEC's operating districts are shown in Figure (2) page 32.
21%Central Sector
35%
WesternSector
7%
SouthernSector
37%
EasternSector
6%SWCC
4%
Jubail Water &Electricity
4%Hajar Electricity
15%
OtherProducers
71%SEC
Figure (17): Distribution of generation capacities among producers
Figure (18): Distribution of electricity generation capacities by the producing entities
in the SEC business sectors
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1-2 Transmission
The National Electricity Transmission Company (NETC)* is responsible for planning the transmission system in the Kingdom, and for building and operating it. This responsibility covers all components of the system at all voltages higher than 110kV throughout the Kingdom except for Yanbu Industrial City where MARAFIQ is responsible for transmission.
Transmission from the generation plants to the consumption areas is carried through high voltage overhead lines that have a total length of 55,260 km and underground lines that have a total length of 4,826 km.
The national transmission network consists of the following: transformer stations. connection and disconnection stations; transmission lines at the high voltages of 110, 115, and 132kV, and transmission lines at the very high voltages of 230 and 380 kV.
SEC is currently carrying out preliminary studies to build a 500 kV DC line connecting Riyadh with Jeddah. The completion of this line will thus complete the construction of
control center for the electricity system which will enhance the capabilities of the National Electricity Transmission Company to manage the national system from east to west and from north to south, and coordinate the activities of the regional control centers that are operating currently in the SEC Eastern, Central, Western and Southern sectors.
1-3 Distribution
Currently SEC has a monopoly also of electricity distribution to consumers in the Kingdom (with the exception of two areas operated by MARAFIQ in Jubail and Yanbu). The distribution network consists of 249,768 km of overhead lines and 245,221 km of underground buried lines.
In 2014, SEC and MARAFIQ delivered a total of 281,155 GWh of energy, an increase of 7% over the previous year. The number of customers increased over the same period
consumption type and quantity.
* NETC is an independent company, wholly owned by SEC. It was established in 2012.
** Data in this table is for SEC and MARAFIQ.
Numberof subscribers
Consumption(MWh)
Percent of totalconsumption
136 368 101 48.5%42 273 998 15.0%35 939 606 12.8%56 617 923 20.1%9 954 873 3.5%
Type
TotalOthers
IndustrialGovernmentCommercialResidential
281 154 501 100%
5 947 6131 325 121246 417
9 34091 637
7 620 128
Table (11): Distribution of consumers Kingdom-wide based on type of consumption and the quantities of their consumption**
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As evident from Figure (19), the residential sector consumes nearly half of the total electricity sold. It should be noted that 70% of the residential consumption is attributed to air-conditioning.
Consumption is about equal at some 30% in each of the Eastern, Central, and Western business sectors, while consumption in the Southern business sector amounts to about a quarter of the quantity consumed in the other sectors (Figure 20).
15%Commercial
13%Government
4%Other
20%Industrial
49%Residential
29%Central
33%Western
9%Southern
29%Eastern
Figure (19): Kingdom-wide distribution of consumption by consumption type
Figure (20): Distribution of consumption among SEC business sectors
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The distribution of consumption among the various categories shows a marked regional variation. Industrial consumption dominates in the Eastern business sector where it reaches 47% of the total consumption of the sector (Figure 21).
In the other business sectors, residential consumption is dominant. In the Central business sector, it is 53% (Figure 22).
8%Government
47%Industrial
10%Commercial
Residential31%
4%Other
18%
7%
17%
53%
5%
Government
Industrial
Commercial
Residential
Other
Figure (21): Distribution of consumption in the Eastern Business sector
Figure (22): Distribution of consumption in the Central Business sector
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In the Western business sector, residential consumption is 55% (Figure 23).
Residential use reaches a maximum of 64% of the total consumption in the Southern business sector (Figure 24).
12%
12%
19%
55%
2%
Government
Industrial
Commercial
Residential
Other
15%
4%
14%
64%
3%
Government
Industrial
Commercial
Residential
Other
Figure (23): Distribution of consumption in the Western Business sector
Figure (24): Distribution of consumption in the Southern Business sector
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Considering Figure 25, the distribution of residential and commercial consumption
sectors. The larger government consumption in the Central business sector is attributed to the location of the Kingdom’s capital in that area. The presence of the two major industrial giants, Saudi Aramco and SABIC, in the Eastern business sector explains the high industrial consumption of this sector.
0102030405060708090
100
Con
sum
ptio
n(G
Wh)
Government IndustrialCommercialResidential
WesternCentralEastern
Southern
Other TotalConsumption
For Each sector
Figure (25): Comparison of consumption patterns in the SEC business sector
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Figures for electricity generation from various sources, total quantity of electricity sold by SEC, and total energy loss of the entire SEC system are shown in Table (12).
2014
Quantity of electric energy(GWh)
219,133Energy generated at SEC plants*
211,566Energy sent from SEC plants
3.45%Percent electricity consumed in SEC plants
13,757Energy imported from SWCC
78,917Energy imported from other producers
304,240Total energy carried by the transmission system
274,502Total energy sold
29,738Total energy loss** in the transmission
and distribution networks
9.77%Percent loss in the transmission
and distribution networks
2013
198 891
192 329
3.3%
14 597
70 520
277 446
256 688
20 758
7.48%
** Energy loss = Energy input to the transmission system – Energy sold*
Table (12): Energy production, sale, and losses in the electrical netwok
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1-4 Service Connections to Consumers
The beginning of 2014 witnessed an improvement on the service connection front. The cumulative numbers of requests for service connections that the
previous year, while the number of requests for the year under consideration also increased as shown in table (13).
Years
Cumulative number of requestsfor service connections from
previous years that were pending
Requests received by SEC duringthe year
Total number of requests
during the year
2013
40 770
76.2%
54 049
149 520 155 589
190 290 209 638
144 910
2014
26 676
90.4%
155 468
182 144
164 578 153 293
73 1%
2012
53 092
2011
155 318
208 410
136 320
65.4%
Table (13): Comparison of SEC’s customer requests for service connections in the past four years
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Figure (26) shows changes in the number of connection requests handled by SEC
requests from a low of around 65% in 2011 to a high of more than 90% in 2014.
Num
ber
of R
eque
sts
0 0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
50 000
100 000
150 000
200 000
250 000
Total number of requests received
2011 2012 2013 2014
Figure (26): Total number of connection requests handled by SEC
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1-5 Growth Trends in the Past Decade
During the past decade (2005-2014) the number of consumers increased from 4,739,843 in 2005 to 7,620,128 in 2014 (Figure 27), an increase of 61 %.
Energy sales during the same period increased by 77% from 158,927 GWh in 2005 to 281,155 GWh in 2014 (Figure 28).
Num
ber
of c
onsu
mer
s(i
n m
illon
s)
2005 2006 2007 2008 2009 2010 2011 2012 2013 20144.04.55.05.56.06.57.07.58.0
Year
Ene
rgy
Sale
s(i
n 10
00 G
Wh)
300280260240220200180160140120
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Year
Figure (27): Growth of the number of consumers (2015-2014)
Figure (27): Growth of energy sales (2015-2014)
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PART IV
1-6 Fuel Types Used in Energy Production
Natural gas and crude oil were used as fuels to produce some 76% of the energy in 2014 (Figure 30). The other fuels used were diesel, and heavy fuel oil (HFO).
Peak demand increased by 89% from 29,913 MW in 2005 to 56,547 MW in 2014 (Figure 29).
Peak
Dem
and
(GW
)
6055504540353025
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Year
13%
Heavy fueloil
32%Natural Gas
Crude Oil44%
11%Diesel
Figure (29): Growth of peak demand (2015-2014)
Figure (30): Fuel types used in electricity production in 2014
110
PART
IV
1-7 Energy Unit Cost
In 2014 SEC’s average energy unit (kWh) cost of production, transportation, and distribution was 0.154 SR. The costs include operational and capital costs, fuel, purchased energy, and depreciation costs (Figure 31).
1-8 Government Efforts to Reduce Electricity Sale Price to Consumers
The energy unit cost price calculated in the preceding section was calculated using the fuel prices actually paid by SEC and other electricity generation entities. This price is much less than the world market prices.
Table 14 shows a comparison between the fuel prices paid by the electricity producers in the Kingdom and international fuel prices, using BTU as a standard of measurement since fuels of different types are used in electricity production.
Price(US$/million BTU)
Fuel Type
15.43Heavy fuel oil
International
0.439.04Gas 0.7521.67Diesel 0.67
0.73 19.26Crude oil
Paid by the Kingdom’sElectricity Producers
15%
Fuelscosts
17%
PurchasedEnergy Cost
24%
OperationalExpenses
Depreciation30%
14%
CapitalExpenses
Figure (31): Distribution of average energy unit cost
Table (14): Comparisons of fuel prices paid by the electricity producers in the Kingdom with international prices
111
PART IV
Based on the international fuel prices, the average energy unit cost in the Kingdom in 2014 would have been about 0.80 SR/kWh.
1-9 Average Energy Unit Sale Price
In spite of the low fuel prices, as demonstrated in the preceding section, as well as the soft loans the government grants to SEC, the average unit price collected by SEC from consumers in 2014 is still below the cost of production. The average unit price collected was 0.138 SR/kWh (Figure 32).
0.0Cost using fuel pricespaid by the Kingdom'selectricity producers
Cost calculated usinginternational fuel prices
Collected Price
Pric
e (S
R/k
Wh)
0.05
0.10
0.15
0.20
0.25
0.30
0.35
0.40
0.45
0.50
0.55
0.60
0.65
0.70
0.75
0.80
0.85
0.138 0.154
0.80
Figure (32): Comparison of the electricity unit cost with the unit price collected
112
PART
IV
One of the most important concerns of ECRA is that tariffs are designed so that they are
that income collected by the industry in accordance with these tariffs meets its revenue requirements.
In order to achieve these aims ECRA’s concerns include: Developing a methodology for tariff setting and for periodic review of the adopted tariffs. Designing and preparing a tariff structure. Developing an overall tariff policy statement for the Kingdom. providers.
service providers in the Kingdom. Developing a comprehensive cost accounting system in order to assess service providers’ costs which ultimately affect the tariff paid by consumers.
use of available energy sources, and depletion of resources and protection of the environment, as well as economic factors. Thus, ECRA strives to insure that tariffs in the Kingdom
of the electricity system, and apply conservation measures that reduce their costs while at
2-1 A Brief History of Electricity Tariffs in the Kingdom*
In the early years of introduction of electricity services in the Kingdom, prices of these services varied from one producer to another, depending on his cost of production. In 1954 the government decided to set electricity prices to be affordable to consumers. For example, the price in Jeddah was thus reduced from SR 0.55 per kWh to SR 0.325 per kWh. Prices were also set in Makkah and Taif at levels that guaranteed reasonable returns to the private
* The historical data shown in this section is derived from “Development of Electricity in 100 years: 1319-1419 AH, a book issued by the Deputyship of Electricity in the Ministry of Industry and Electricity- Riyadh.
The Electricity TariffChapter 2
113
PART IV
throughout the Kingdom by CMD 421 on October 22, 1963. The reductions were 12% percent for Jeddah, 30% for Makkah, and 40% for Taif. Concomitant with these reductions, the Government guaranteed the private utilities subsidies that covered
were made in 1969 by the Saudi National Electric Power Company, the utility operator in the city, which reduced the rate from SR 0.24 to SR 0.20 per kWh.
All Consumers, Except Mosques(in SR/kWh )
City
0.18Jeddah
Mosques(SR/kWh)
0.18
0.15Makkah 0.17
0.15Madinah 0.18
0.17 0.15
More than four hoursafter sunset
0.24
0.30
0.30
0.26
First four hoursafter sunset
0.21
0.25
0.25
0.25
More than100 kWh
0.24
0.30
0.30
0.15
Dammam
0.170.260.250.30
0.30
First 100kWh
Khobar
Table (15): Electricity Prices in Major Cities per CMD 174 of 1960
owners of the utilities. On March 22, 1960 a new electricity tariff was issued by Council of Ministers Decision (CMD) 174 which set the prices as shown in Table (15).
114
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IV
On January 17, 1972 the tariff saw further reductions via CMD 1099. The prices were as shown in Table (16).
The CMD included two provisions: for non-industrial consumers and SR 20.00 for industrial consumers.
On August 16, 1973 the government decreed reduction of the tariff by 50-60% in
consumption and SR 0.20 per kWh for all other consumption. The subsidies for
encourage investment in electricity services in these regions.
On August 9, 1974 CMD 1020 set the tariff for industrial consumption at SR 0.05 per kWh, and SR 0.07 per kWh for all other consumption. The CMD also raised
through the Saudi Industrial Development Fund to electricity operating companies.
On November 16, 1984, the Government adopted a graduated tariff that increased with each increasing "bracket" of consumption. The prices were as shown in Table (17).
City
0.13Jeddah 0.14
0.18Makkah 0.20
0.18Taif 0.20
0.18Madinah 0.20
0.20Yanbu 0.250.14 0.10Dammam
Non-industrial consumption(SR/kWh)
Industrial consumption(SR/kWh)
Table (16): Electricity prices in various cities as per CMD 1099 of January 17, 1972
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PART IV
and reduction of the tariffs. As of January 2, 1995, a fee of SR0.05/kWh was added to consumption above 2000 kWh to establish a fund for electricity projects needed on an urgent or emergency basis.
1 -1,000 0.07
0.051,001-2,000 0.10
> 2 000 0.15
Monthly Consumption"Bracket" (kWh)
Non-industrial consumption(SR/kWh)
Industrial consumption(SR/kWh)
2-2 The Current Tariff
In 1995 the Ministry of Industry and Electricity undertook a comprehensive study of the electricity sector in the Kingdom that culminated in the Council of Ministers Decision 169 that was issued on November 30, 1998, which mandated total overhaul and restructuring of the entire sector. The decision also included approval of a new tariff (Table 18) starting on April 6, 2000.
Residential, Commercial,Government(SR/kWh)
0.05
0.12
0.100.10
0.13
Monthly Consumption(kWh)
1-2,000
2,001-4,000
4,001-5,000
0.18
0.23
0.28
5,001-6,000
6,001-7,000
7,001-8,000 0.12
0.32
0.36
0.38
8,001-9,000
9,001-10,000> 10 000
Agricultural, CharitableSocieties(SR/kWh)
Industrial(SR/kWh)
Table (17): Electricity tariff applied as of November 24, 1984
Table (18): Tariff as of April 6, 2000
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PART
IV
in Table (19) which became effective October 28, 2000.
Residential, Commercial,Government(SR/kWh)
0.05
0.12
0.10
0.05
0.10
0.12
MonthlyConsumption
(kWh)
1 -2,000
2,001-4,000
4,001-5,000
0.15
0.20
0.22
5,001-6,000
6,001-7,000
7,001-8,000 0.12
0.24
0.26
8,001-9,000
9,001-10,000
> 10,000
Agricultural, Mosques,Charitable Societies
(SR/kWh)
Industrial, MedicalFacilities, Private
Educational Institutions(SR/kWh)
Table (19): Tariff approved by CMD 170 for implementation as of October 28, 2000
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PART IV
This tariff remained in effect for approximately ten years.
The residential tariff and those for agricultural uses, mosques, and charitable societies remain unchanged till the present time (Table 20).
On July 1, 2010, a new tariff for government, commercial, and industrial consumption came into force. It was adopted by a decision of ECRA's Board, utilizing the authority delegated to it by the Council of Ministers to set tariffs for non-residential consumption (i.e., government, commercial, and industrial consumption) with an upper limit of SR0.26/kWh.
As per the aforementioned Board decision, the commercial and government tariff became as shown in Table 21.
Tariff(SR/kWh)
0.05
0.10
0.12
Monthly Consumption(kWh)
Residential Consumption Tariff
1 -2,000
2,001-4,000
4,001-5,000
5,001-6,000
6,001-7,000
7,001-8,000
8,001-9,000
9,001-10,000
More than 10,000
0.15
0.20
0.22
0.24
0.26
Tariff(SR/kWh)
0.05
0.10
Monthly Consumption(kWh)
Agricultural, Mosques, andCharitable Societies Tariffs
1 -2,000
2,001-5,000
> 5,000 0.12
Tariff(SR/kWh)
0.12
0.20
Monthly Consumption(kWh)
Commercial Consumption Tariff
1 -4,000
4,001-8,000
More than 8,000 0.26
Tariff(SR/kWh)
Monthly Consumption(kWh)
Government Consumption Tariff
Any quantity 0.26
Table (20): Residential, Agricultural, Mosques, and Charitable Organizations Tariffs,
unchanged, as per CMD170
Table (21): Commercial and Government Tariffs,as of July 1, 2010
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PART
IV
The industrial consumption tariff became as shown in Table 22.
0.14
Consumer Type
I-Tariff for the period from October 1 to April 30
II-Time of Use Tariff (for industrial consumers using digital meters)
Applicable from May 1 to September 30
Seasonal Tariff(for industrial consumers using electromechanical meters)
Applicable from May 1 to September 30
0.15 (SR/kWh)
Small (Plant with contracted load not exceeding 1000 kVA)
Tariff(SR/kWh)
Consumption Time (Consumption Hours)
00:00-08:00
08:00-12:00
12:00-17:00
Consumption Days
Saturday - Thursday
17:00-24:00
00:00-09:00
09:00-24:00
0.10
0.15
0.26
0.15
0.10
0.15Friday
Tariff(SR/kWh)
Large (Plant with contracted load exceeding 1000 kVA)
0.12
To give an idea of the progression of tariffs in the Kingdom since 1950, an example
kWh of residential consumption in the City of Jeddah.
Table (22): Industrial Consumption TariffEffective as of July 1, 2010
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PART IV
In general, the electricity tariff in the Kingdom is one of the least expensive in the world as can be observed from comparing it with the approved tariffs in a large number of countries for which up-to-date data is available on the internet*. The
the countries shown in Figure (34) except Uzbekistan, Myanmar, Argentina, and Kuwait.
Tari
ff (
SR/k
Wh)
0.00.10
1950 1960 1970 1980 1990 2000 2010
0.200.300.400.500.60
Year
Tari
ff(S
R/k
Wh)
0.0
0.20
0.40
0.60
0.80
1.00
1.20
1.40
1.60
Tariff ceiling in the Kingdom
Ger
man
yD
enm
ark
Phill
ippi
nes
Aus
tral
iaB
elgi
umN
ethe
rlan
dsIt
aly
Irel
and
Swed
enPa
ragu
ay
Port
ugal
Switz
erla
ndH
unga
ryC
hile
Spai
n
Sing
apor
e
Finl
and
UK
Fran
ceM
exic
oN
ew Z
eala
ndR
oman
iaC
olom
bia
Nor
way
Peru
Indo
nesi
a
Saud
i Ara
bia
Uzb
ekis
tan
Mya
nmar
Arg
entin
aK
uwai
t
Bra
zil
Cro
atia
* Data was taken from the following site: http://en.wikipedia.org/wiki/electricity_tariff
Figure (34): Comparison of the upper limit of the tariff
countries around the world
kWh of residential consumption in the City of Jeddah from 1950 to the present
120
PART
IV
The same result is obtained when comparison is made with tariffs that range between a maximum and a minimum. It is evidently clear that the maximum and the minimum of the tariff in the Kingdom are lower than all the countries shown in Figure (35).
Some are industrially advanced, some are underdeveloped, and some others are developing. Included also are some oil producing countries.
The low level of the electricity tariffs in the Kingdom is due mainly to the government’s supply of fuels to the electricity producers at virtually trivial prices compared to the world market prices.
2-3 Residential Consumption Monthly Bill Data
Total residential consumption of electric energy in 2014 was 136,368 GWh, which represents 48.5 % of total electric energy consumption in the Kingdom. This consumption was 126,113 GWh in 2013, and it was 48% of total consumption.
MaxMin
Kingdom's minimum tariff
Kingdom's maximum tariff
Tar
iff
(SR
/kW
h)
2.00
1.50
1.00
0.50
0.0
2.50
Sout
h K
orea
Nic
arag
ua
USA
Jord
anU
rugu
ayH
ong
Kon
gJa
pan
Cam
bodi
a
Nep
alU
krai
ne
Vie
tnam
Ban
glad
esh
Icel
and
Iran
Tur
key
Taiw
an
Nig
eria
Can
ada
(Onr
ario
)
Sout
h A
fric
a
Paki
stan
Mal
aysi
a
Rus
sia
Serb
iaB
ulga
ria
Egy
pt
Lao
s
Indi
a
Dub
ai
Chi
na
Can
ada
(Que
bec)
Eth
iopi
a
Tha
iland
Saud
i Ara
bia
Figure (35): Comparison of the tariff range in the Kingdom with a number of countries around the world
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PART IV
Analyzing the monthly residential consumption bills issued in 2014, the following becomes apparent (Figure 36): 61.9% of the bills were valued at SR100 or less each. 15.5% of the bills ranged in value between SR101.00 and SR200.00 each. 9% of the bills ranged in value between SR201.00 and SR300.00 each. 4.4% of the bills ranged in value between SR301.00 and SR400.00 each. 2.9% of the bills ranged in value between SR401.00 and SR500.00 each.
Only 6.2% of the bills had a value exceeding SR500.00 each.
From the preceding data it is clear that some 94% of the monthly residential consumers bills issued in 2014 did not exceed SR500.00 each (Figure 37).
Undoubtedly, the monthly bill will vary greatly from one month to another
and decreases in the winter months for most parts of the country.
70%60%50%40%30%20%10%0%
6.2%2.9%4.4%9.0%15.5%
61.9%
SR 100.00 or less
SR 101.00 - SR200.00
SR 201.00 - SR300.00
SR 301.00 - SR400.00
SR 401.00 - SR500.00
More than
SR500.00
Perc
enta
ge
Value of the monthly bill
Cum
ulat
ive
perc
enta
ge
Value of the monthly billNot exceeding SR100.00
Not exceeding SR200.00
Not exceeding SR300.00
Not exceeding SR400.00
Not exceeding SR500.00
Not exceeding SR1000.00
100%95%90%85%80%75%70%65%60%55%
61.9%
77.4%
86.4%90.8%
93.7%98.1%
Figure (36): Percentage distribution of monthly bills in 2014
Figure (37): Cumulative percentage of monthly bills issued in 2014
122
PART
IV
Saudi Arabia is considered the largest producer of desalinated water in the world. The total production capacity of all entities licensed by the Authority to participate in this activity in 2014 was 6,218,018 cubic meters daily. The following sections contain a description of the water desalination system in the Kingdom.
3-1 Production of Desalinated Water
The Saline Water Conversion Corporation (SWCC) is the principal entity for desalinated water production in the Kingdom. Its share of total production is about 58%. Table 23 shows the capacities of entities working in desalinated water production and cogeneration.
Numberof PlantsLicensee
16 3 581 294SWCC
26
Desalinated WaterProduction Capacity
(m3/day)
1 805 464Jubail Water & Electricity Co.
1 888 000
1 201 360
1 212 000
Shuaibah Water & Electricity Co.
6 218 018
MARAFIQ
1 192 000
Shuqaiq Water & Electricity Co.
1 150 000
Rabigh Arabian Water & Electricity Co
2 50 000
Shuaibah Expansion Project
1 74 900
Bawarij International Co.
1 63 000
Fatah Internation Water & Electricity Co.
Kindasah Water Services Co.
Total
Water DesalinationChapter 3
Table (23): Desalinated water production of licensed entities
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PART IV
Figure (38) shows the percentage of desalinated water produced by each licensee.
The quantity of water produced by all licensees in 2014 was 1,912 million cubic meters. Figue (39) shows the percentage distribution of annual production for the licensed entities
15%Other Producers
13%
JubailWater &
Electricity
14%
ShuaibahWater &
Electricity
SWCC58%
15%
14%
60%
11%Other Producers
JubailWater &
Electricity
ShuaibahWater &
Electricity
SWCC
Figure (38): Percentage distribution of daily production among the licecsees
Figure (39): Percentage contribution of licensees to annual production
124
PART
IV
SWCC’s share of the total quantity of annual desalinated water production in 2014, (Table 24), increased by 8% from the previous year to reach 1,140 million cubic meters, produced from its numerous plants spread along the Kingdom’s shorelines.
YearPlant
Production Quantity(Million Cubic Meters)
388.6Jubail
119.5Al-Khobar
55.2Ras Al-Khair
189.2Jeddah
182.9Shuaibah
140.6Yanbu
30.8Shuqaiq
25.1Small Plants
1 140Total Production
2014 2013
388.0
129.7
8.0
-
163.6
176.7
136.2
28.6
24.3
1 055.1
8.1Khafji
Figure (40) shows the percentage share of each SWCC plant in the total corporation production.
16%Shuaibah
17%Jeddah
Jubail34%
Other plants10%
Al-Khobar11%
12%Yanbu
Table(24): Desalinated water produced in SWCC plants
Figure (40): Percentage distribution of annual production among SWCC plants
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PART IV
3-2 Transportation of Desalinated Water
SWCC is responsible for transportation of the desalinated water from the production plants to the major reservoirs of the Potable and Sanitary Water Departments in the various cities and towns. These departments, which come under the purview of the Ministry of Water and Electricity, along with the National Water Company (NWC) are responsible for water distribution to the ultimate consumers. Figure (41) shows locations throughout the Kingdom of SWCC's water desalination plants as well as the major water transportation pipelines.
Khafji
Ras Al-Khair
Jubail
Khobar
RiyadhHafoof
Buraidah Alnoairya
Hafr Albatin
Haql
Duba
Alwajh
Umluj
Yanbu
Rabigh
Azizia
Jeddah
ShuaibaAllaith
AlQunfutha
AlbirkShuqaiq
Farasan Jazan Plants
Operational Pipelines
KhamisMushiyt
TaifMakkah
Al Madina
Abha
Albaha
Figure (41): Desalination plants and major desalinated water transportation lines in the Kingdom
126
PART
IV
3-3 SWCC's Annual Desalinated Water Production
In 2014 SWCC’s average daily production was 3.12 million cubic meters. Figure (42) shows SWCC's production capacity of desalinated water over the past ten years.
3-4 Production Capacity Factor
The production capacity factor expresses the ratio of actual production to design capacity. The overall average production capacity factor for the entire corporation increased from 80.7% in 2013 to 82.2% in 2014.
3-5 Electricity Generation in SWCC
Most water desalination plants owned by SWCC are of the cogeneration type, where desalinated water is produced simultaneously with electricity. SWCC sells most of its electricity production to SEC.
In 2014, SWCC generated 29.7 GWh of electricity, of which 21.2 GWh (or 71.2% of the total generation production) were generated by the East Coast plants, while the remainder was produced by the West Coast plants.
3-6 SWCC Restructuring Plan
In conformity with the policy adopted by the government to privatize a certain number of economic activities, and the decisions of the Council of Ministers and
3.1
3
2.9
2.8
2.7
2.6
2.5
2.4
2.3
Year
Prod
uctio
n(M
illio
n cu
bic
met
ers)
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Figure (42): SWCC production of desalinated water in the past ten years
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PART IV
Supreme Economic Council to implement privatization in the area of water desalination, SWCC had undertaken in the past few years tremendous efforts to study restructuring of its activities and modifying its charter in order to foster private sector participation and investment in the construction and operation of new desalination plants. The studies concentrated particularly on privatization alternatives of SWCC. These efforts were concluded in late 2008 with adoption of transforming SWCC into a holding company (Figure 43) with wholly owned subsidiaries. This approach permits participation of the private sector in the production companies (in a fashion similar to the IWPPs), and allows the private sector to participate at a later stage in the ownership of the holding company through public share offering. The private sector share in the ownership of the subsidiary production companies will depend on the investment attractiveness of each plant.
The Holding Company
ResearchInstitute &
DesalinationTechnologies
OtherProduction
PlantsTransportation Khafji Small
PlantsRas
Al-KhairJubail Al-Khobar Shuqaiq Shuaibah Yanbu
Partial Ownership (Subsidiaries)
Full Ownership (Public)
The private sector will be allowed in the short-to-medium-term (i.e., a period
operations through a management contract(s).
In the long run the possibility of transforming the strategic transportation unit into a production company will be considered. The private sector may then participate through a public share offering or as a strategic partner.
Since the privatization model was adopted, SWCC completed most of the tasks: Preparation of the holding company incorporation documents, a draft of the Royal decree, the company charter, and the Council of Ministers decision.
Figure (43): Final structure of SWCC after implementation of the restructuring plan
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PART
IV
company.
base.
Designing the organizational structure, creating a human resources plan, proposing a plan for manpower placement, and determining authorities. Creating a human resources strategy; and determining job descriptions, and human resources policies and procedures. Creating a model of the successor company and its performance KPIs. Designing a system for the new work procedures. Preparing reports on the balance sheet, opening accounts, and accounting policies and procedures for the successor company. Creating an execution plan for the actual implementation of restructuring. Participating in drafting the desalinated water code; and preparing structures for the production and transportation of water tariffs, and the production and transmission of electricity. Developing an IT strategy.
There are still many more tasks whose completion is linked to issuance of the decision of transformation into a holding company.
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PART IV
ECRA considers private sector participation in the electricity and water desalination industry essential for the development and sustainability of this industry in the Kingdom. The Authority has thus placed this matter as one of its highest priorities.
4-1 The Electricity Industry
As shown in in generation.
According to a study undertaken to estimate the funding needs of the electricity services for the period 2010-2020, the amount required for electricity generation, transmission and distribution was estimated at SR526 billion distributed as shown in Table (25).
Required Funding(in billion SR)
Activity
335 63.7%Generation
121 23%Transmission
70 13.3%Distribution
Total 526
Percentage of totalfunding required
The estimates of Table (25) are based on the assumptions that by the year 2020 the peak load will be 71,940 MW and the generation reserve will be 15%.
In 2014, contracts to build a number of projects worth SR39.4 billion were signed.
Among the most important of these projects were the following:
In Generation: The value of the contracts for generation projects was around SR7.6 billion. They included:
Adding the combined cycle stage to the generation plant in Qasim – Phase II and III. Adding the combined cycle stage to the generation plant in Hail – Phase II. Purchasing gas and steam turbines, and heat exchangers for the Dhoba generation plant. Purchasing heat exchangers to generate steam for the plants number 13 and 14 in the Riyadh region.
Private Sector Participation in The Electricity and Water Desalination Industry
Chapter 4
Table (25): Estimated funding required for implementing electricity projects through the year 2020.
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IV
In Transmission: The value of contracts for the transmission projects exceeded SR29.1 billion. The most important of these projects were:
Building a new switching station for (380/230/115)kV for the residential area of Jubail. Connecting generation plant number 2 at Shuqaiq to the overhead transmission network. Building a new 380 kV switching station in Tabuk. Installing overhead lines and underground cables at the 230 and 380 kV in Jubail and Shudgum. Building a dual circuit overhead transmission line at 380 kV between the main switching station in Tabuk and the main switching station in Tabarjal.
In Distribution: Contracts totaling more than SR2.7 billion were signed to execute distribution projects in cities, towns, and urban settlements.
Undoubtedly, the amount of work required by the electricity industry and the volume of investments needed till the year 2020 represent attractive opportunities for the private sector to participate in projects and in growth and development.
The investment opportunities for private sector participation in the industry include: Developing Independent Power Projects (IPPs), and Independent Water and Power Projects (IWPPs). Building, leasing, and/or operating transmission lines and pipelines. Forming power generation and desalination production companies. Obtaining concessions or leases for existing generation and water production facilities. Obtaining facility management contracts. Direct purchase of selected existing power and water desalination assets. Providing services to consumers.
4-2 The Water Desalination Industry
The large economic development that the Kingdom is currently undergoing has led to an increase in demand for desalinated water, and consequently the need to execute
Kingdom will need to invest around SR300 billion on water desalination in the coming twenty years.
In the medium term, the estimated costs for implementing projects for water desalination, cogeneration, and water transportation up to the year 2020 will be SR91 billion (Figure 44). The estimates were made on the basis that by 2020 SWCC
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As with the electricity industry, undoubtedly, the volume of work required by the desalination industry, and the size of investment it needs present attractive opportunities for participation of the private sector in carrying out the water desalination industry projects, and share in its growth and development.
The opportunities available to the private sector to participate in this industry include the following: Executing the projects that are let out for bidding by SWCC, through the system known as EPC (engineering, procurement, and construction). Building independent projects for water desalination after the holding company and its subsidiaries are established. Building pipelines. Supplying and manufacturing spare parts for the desalination plants. Carrying out many of the operation and maintenance contracts for the production plants and the pipelines.
ECRA will be working in coordination with the Ministry of Water & Electricity (MWE), SEC, SWCC, investors from the private sector, and all other interested
Electricity& Water
43.7
Electricity7.7
Operational ExpensesCapital Expenses
Transportation 8.8
Water 9.0
Transportation21.7
65.4
25.5
for capital and operational expenses to the year 2020(Amounts in SR billion)
will be producing 6 million cubic meters of desalinated water daily.
APP
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APPENDIX
AUTHORIZATIONS, LICENSES,
AND EXEMPTIONS FROM LICENSING
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134
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LocationLicensed Entity
Dhoba 550
50
SEC
A-Electricity Generation
Saudi Diesel Equipment Co
1
A number of landborder posts 30Falcon Energy Solutions3
Hail, Sudair 1 310SWITEC Middle East Group4
2 A number of landborder posts
ProductionCapacity
(MW)
LocationLicensed Entity
RabighItlalat Alghad Group
B-Cogeneration
Ghazan Industrial Investment &Development Co.
1
2Jubail
1,200
70
480,600
United Meteors IndustrialInvestment Co.3 Rabigh
500
230
1 370118,800
1 133Saudi Aramco - Al-Fadhly Project4 Al-Fadhly 1 400
Electricity(MW)
Water(m3/ d)
Steam(Ton/h)
Production Capacity
LocationLicensed Entity
Rabigh 5 000
27,000
Adnan Taybah ElectricityGeneration Co.
C-Water Desalination
SWCC
1
2Haql – Al-Wajh -
Dhoba
Production Capacity(m3/d)
Appendix
Table (26): Permits Issued by the Authority(By the end of 2014)
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LocationLicensed Entity
Kingdom-wide 68 374SEC
A-Electricity Generation
Murjan Electricity Production Co*
1
Hofuf/Ain Dar 227Saudi Cement Co.2
Rabigh 1 320Rabigh Electricity Co.3
Dammam 73Twairgi Power Co.4
Jeddah 59Modern Aman Power Co., Ltd5
Riyadh 1 756Dharma Electricity Co.6
Guraiyya 4 098Hajar Electricity Co.*7
Several locations 361General Contracting Co.
(Olayyan Group)**8
Several locations 309Alternative Solutions Co**9
Several locations 334Power Equipment Rental Co.**10
Several locations 250Abdullah & Abdul Aziz Kanoo**11
Several locations 52
2 091
Nour Power Co.12
13 Rabigh
16Al-Obaikan Paper Industries Co.14 Riyadh
ProductionCapacity
(MW)
** Mobile units.* Has not started production yet.
Table (27): Licenses Issued by the Authority(By the end of 2014)
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LocationLicensed Entity
A number of coastal sitesSWCC
B-Cogeneration
Jubail Power Co.
1
2 Jubail11,102
250
4,172,517 41,671
510
Tihama PowerGeneration Co.
3 Jughaima, Othmainya,Shudqum, Ras Tannoura 1,643 6 775
Shuaibah Water & Electricity Co.4 Shuaibah 1 191 888 000
Shuqaiq Water & Electricity Co.5 Shuqaiaq 1 020 212 000
Jubail Water & Electricity Co.6 Jubail 2 875 805 464
Rabigh Arab Water & Electricity Co.7 Rabigh 600 192,000 4 230
Saudi Aramco8 2,269 4,518
MARAFIQ9 Yanbu 2,410 210,960
Electricity(MW)
Water(m3/ d)
Steam(Ton/h)*
Production Capacity
Riyadh, Abqaiaq,Qatif, Kharsaniya,
Barry, Yanbu,Wasit, Manifah,
LocationLicensed Entity
Shuaibah 150 000
75 000
Shuaibah Expansion Project Co.
C-Water Desalination
Fatah International SeawaterDesalination Activity Co.
1
Shuaibah 50 000 Bawarij Desalination International, Ltd.2
A number ofcoastal sites 983 777SWCC3
Yanbu 299 200MARAFIQ4
5 Jubail
63,000Kindasah Water Services Co.6 Jeddah
ProductionCapacity(m3/d)
LocationLicensed Entity
Kingdom-wide ElectricityTransmission
Desalinated WaterTransportation
National Electricity Transmission Co.
D-Electricity Transmission and Desalinated Water Transportation
SWCC
1
Jubail and YanbuMARAFIQ2
3 Kingdom-wide
Type
* Does not include steam produced for inhouse use.
137
APPEN
DIX
Licensed Entity
Kingdom-wide
Jubail and Yanbu
SEC
E-Electricity Distribution and Retail
MARAFIQ
1
2
Location
Licensed Entity
Electricity & Water Co., Ltd
F- Electricity and Water Desalination Trading
MARAFIQ (Tawreed )
1
2
1 750
2.744
1 242 000
800 000
50 000Rakaa Power & Water Co., Ltd3
Electricity(MW)
Water(m3/ d)
Quantity Licensed
Location
G-Ownership of Electricity Transmission System
Ras Al-Khair
Licensed Entity
Saudi Arabian Mining Co.(MAADEN)
Four overhead transmission lines -129 km long. Maximum load 2,300
and 1,200 kVA. Voltage: 380 kV and 230kV.
138
APP
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IX
LocationExempted Entity
Yanbu 100
45
Yanbu Cement Co.
A-Electricity Generation
National Poultry Co.
1
Riyadh 221Yamamah Cement Co.2
Marat Center - Riyadh 46Madinat Cement Co.3
Hazm al-Jalameed 50Saudi Arabian Mining Co.
(MAADEN)4
Haradh 46 National Saudi AgriculturalDevelopment Co. (NADEC)5
Dhoba 46Tabuk Cement Co.6
Najran 56Najran Cement Co.7
Ojaimi Industrial City, Riyadh 8Middle East Chemicals Co., Ltd.8
Rabigh 47Al-Safwa Cement Co.9
Tarabah, Hail Region 53Hail Cement Co.10
Turaif 49Jawf Cement Co.11
A’ra’r 42Northern Borders Cement Co.12
13 Butain-Authal
ProductionCapacity
(MW)
Table (28): List of Exemptions from Licensing by the Authority(By the end of 2014)
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APPEN
DIX
LocationExempted Entity
Al-LeithNational Shrimp Co.
B-Cogeneration
Saudi Paper Industry Co.
1
2Second Industrial City -
Dammam
25
15
420
25
5
Middle East Paper Industry& Production3 Jeddah 82 245
Arabian Paper Industry4Second Industrial City -
Dammam50 -
-
-
Saudi Arabian Mining Co.(MAADEN)
5 Ras Al-Khair 160 40,000
Electricity(MW)
Water(m3/ d)
Steam(Ton/h)
Production Capacity
250
-
LocationExempted Entity
Dhoba 1 500 Tabuk Cement Co.
C-Water Desalination
1
ProductionCapacity
(m3/d)
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140
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THE BOARD OF DIRECTORS
EXECUTIVE MANAGEMENT
141
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H.E. Adullah A. Al-Huseyen
H.E. Dr. Abdullah M. Al-Shehri
Mr. Abdullah I. Al-Hubayib Mr. Mohammed A. Baghdadi
Dr. Abdullah A. Al-Alsheikh
Mr. Musaed A. Al-HomaidanDr. Khalid H. Bayyari
Mr. Khalid H. Al-SenaniDr. Ibrahim S. Moataz
Mr. Abdul Aziz O. Al-OmairProf. Fahad H. Dakhil
Mr. Saleh I Al-RasheedMr. Safar M. Dhofayir
Minister of Water & ElectricityChair of the Boar
GovernorElectricity & Cogeneration Regulatory Authority
Deputy Chair of the Board
Chair of the Board,Saudi ABB Co.
Deputy Minister for Planning & DevelopmentMinistry of Water & Electricity
Vice-Governor for Planning & DevelopmentSaline Water Conversion Corporation
Assistant Deputy Minister for Follow-up and Information
Ministry of Economy & Planning
Senior Vice-President for Technology and Operations Group
Saudi Telecom Co.
Director, Gas Supplies and Pricing DepartmentMinistry of Petroleum & Mineral Resources
College of EngineeringKing Saud University
Deputy Minister for Central ServicesMinistry of Finance
Executive Director,Educational & IT Projects Co.
Director General, Industrial Cities and Technology Zones Authority (Representing the Ministry of
Commerce and Industry)
Chief ExecutiveSouthern Region Cement Co.
Board of Directors
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Executive Management
GOVERNORH.E. Dr. Abdullah M. Al-Shehri
Tel: (011) 201-9009 Fax: (011) 201-9012 Email: [email protected]
Dr. Saleh A. BakhrebahVice-Governor,
Support ServicesTel: (011) 201-9104Fax: (011) 201-9105
Email: [email protected]
Dr. Mansur Al- DaajaniAdvisor, and Supervisor of Information Technology
Tel: (011) 201-9200Fax: (011) 201-9203
Email: [email protected]
Mr. Khalid M. MaziedAsst. to Governor for Legal Affairs/ Board Secretary
Tel: (011) 201-9117 Fax: (011) 201-9296
Email: [email protected]
Mr. Ali A. JamaanAdvisor and Supervisor of Intrenal Auditing
Tel: (011) 201-9075 Fax: (011) 201-9076
Email: [email protected]
Mr. Mohammad Al-Husseini
Tel: (011) 201-9007 Fax: (011) 201-9012
Prince Saud A. Al-MugrenDirector,
Consumer AffairsTel: (011) 201-9220 Fax: (011) 201-9227
Email: [email protected]
Mr. Abdul Rahman Al-MohaiziDirector General,
Legal & Licensing AffairsTel: (011) 201-9131Fax: (011) 201-9132
Email: [email protected]
Mr. Ibrahim A. Al-GaraawiDirector,Finance
Tel: (011) 201-9280Fax: (011) 201-9287
a
Mr. Fahd M. Al-HassaniDirector,Personnel
Tel: (011) 201-9263Fax: (011) 201-9265
Email: [email protected]
Mr. Hamid K. Al-MalkyDirector,
Property ManagementTel: (01) 201-9020Fax: (01) 201-9025
Email: [email protected]
Mr. Fayez G. Al-JabriDirector General,Technical AffairsTel: (01 201-9111
Fax: (011) 201-9113Email: [email protected]
Mr. Mansour H. Al-AnaziDirector General,
Economics and Tariff AffairsTel: (011) 201-9120Fax: (011) 201-9123
Email: [email protected]
Mr. Ali H. Al-WadeiDirector,
Administrative SupportTel: (011) 2019-9109Fax: (011) 201-3211
Email: [email protected]
Mr. Saad H. Al-SalamahDirector,
Service Providers AffairsTel: (011) 201-9160 Fax: (011) 201-9162
Email: [email protected]
Mr. Nuais Al-HwaidyDirector, Public Relations and Information
Tel: (011) 201-9045 Fax: (011) 201-9044
Email: [email protected]
Dr. Esam A. AmmarAdvisor
Tel: (011) 201-9063 Fax: (011) 201-9062
Email: [email protected]
Mr. Nasser H. QahtaniVice-Governor,
Regulatory AffairsTel: (011) 201-9034Fax: (011) 201-9035
Email: [email protected]
Mr. Nasser A. Al-WohaibiVice-Governor,
Consumers & Service Providers AffairsTel: (011) 201-9172 Fax: (011) 201-9173
Email: [email protected]
VICE-GOVERNORS
ADVISORS
DEPARTMENT HEADS
144
ECRA headquarters building location map
Headquarters BuildingECRA
North
Ministry of the InteriorIntercontinentalHotel
Council ofSaudi Chambers
Khurais Road Cairo Square Al-Khaleej Bridge To Dammam
Al-Takhassusi Street
King Fahad R
oad
To Makkah
South
145
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October 2015Publication 002-1436
www.ecra.gov.sa
Public Relations Telephone: (011) 201-9045 Public Relations Fax: (011) 201-9044 ECRA Operator: (011) 201-9000 ECRA Toll Free: (800) 125-9000
Or please visit our site on the internet
Electricity & Cogeneration Regulatory Authority7948 King Fahd Branch Road- Al Mutamarat
Ar Riyadh 12711- 4199 Kingdom of Saudi Arabia
ELECTRICITY & COGENERATION REGULATORY AUTHORITY