no content

TABLE OF
CONTENTS
To insure that supplies of electricity and desalinated water
products provided to consumers in the Kingdom are:
Adequate
Reliable
Of high quality, and
Fairly priced.
1
TABLE OF
CONTENTS
© Electricity & Cogeneration Regulatory Authority
King Fahd Library Indexing During Publication
Electricity & Cogeneration Regulatory Anuthority
2014 Activities and Achievements Report 2013 Riyadh 297x210mm 120 pages
REDMEC 16583523
1. Electricity & Cogeneration Regulatory AuthorityReports-Saudi Arabia AZ
2. Dewey 1428-2329
2
TABLE OF
CONTENTS
3
TABLE OF
CONTENTS
4
TABLE OF
CONTENTS
ACTIVITIES AND ACHIEVEMENTS
OF THE AUTHORITY IN 2013
August 2014
5
PART I
6
PART I
TABLE OF CONTENTS
7
TABLE OF
CONTENTS
Page
Subject
SUMMARY OF THE REPORT
11
PART I
General Background
8
Page
Subject
Chapter 4: LAWS AND REGULATIONS
36
4-1 Updating the Electricity Law Project
36
4-2 Updating the “Provision of Electricity Service Manual”:
36
Chapter 1: THE SECTOR AND THE INDUSTRY
18
1-1 The Electricity and Water Desalination Sector
18
4-2-1 Reducing the Period for a New Service Connection
36
1-2 The Electricity and Water Desalination Industry
19
4-2-2 Changing the Billing Mode of Small Value Bills
37
1-2-1 The Electricity Industry
19
4-2-3 Connection and Consumption Agreements
37
1-2-2 The Water Desalination Industry
19
4-2-4 Updating the Rules for Service Disconnection and
Collection of Debts
37
Chapter 2: OVERVIEW OF THE AUTHORITY
20
2-1 The Authority’s Goals and Remit
20
2-2 Organizational Structure of the Authority
21
4-3 Study to Evaluate Power Purchase Agreements from Independent Power Producers
4-4 Preparation of a Framework for Regulation of Electricity and Desalinated Water Production Using Atomic and
Renewable Energy
38
38
4-5 Codes Supervision Committees:
39
PART II
4-5-1 The Saudi Transmission Code
39
ACTIVITIES AND ACHIEVEMENTS OF THE
AUTHORITY IN 2013
4-5-2 The Saudi Distribution Code
39
4-5-3 The Water Desalination Code
39
Chapter 1: CONSUMER CARE
26
1-1 Updating the (Provision of Electricity Service Manual)
26
Chapter 5: LICENSING
40
1-2 Dissemination of Information Regarding the Mechanism of
Submitting Complaints Electronically
26
5-1 Permits
41
1-3 Field Visits to Facilities of a Service Provider
26
5-2 Licenses
41
1-4 Enhancing the Consumers Complaints Handling System
27
5-3 Exemptions from Licensing
41
1-5 Review and Handling of Consumers Complaints
28
1-6 Plan to Provide Plantations, Villages, Hamlets , and Urban
Settlements with Electricity Service
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Security System
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Electricity Bill Partial Subsidy
5-4 License Forms
41
31
Chapter 2: SERVICE PROVIDERS AFFAIRS
32
2-1 “Service Providers Affairs” Department
32
2-2 Electricity and Water Desalination Industry Accidents
32
2-3 Transgressions Against Service Providers Facilities
32
7-1 Auditing Licensees’ Performance KPIs
46
2-4 Handling Encroachments on the Electricity Lines Rights of Way
33
7-2 Plan for Enhancing Reliability of the Electricity Network
52
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System for Major Electricity Outages
33
Chapter 6: ELECTRICITY AND WATER DESALINA31
31
TION PLANS
42
42
6-1 Development of the Electricity Industry Restructuring
Plan
6-2 Long Term Plan for Water Desalination and Electricity
45
Generation Projects, and Determination of their Fuel Needs
6-3 Study of Water and Electricity Uses
Chapter 7: SERVICE QUALITY AND PERFOR MANCE
MONITORING
7-3 Development of a Strategy for Smart Meters and Smart
Grids in the Kingdom
7-4 Study of SEC's Financial and Accounting Performance
KPIs
45
46
54
56
Chapter 3: TARIFFS
34
3-1 Charges for Use of the Transmission Network System
34
7-5-1 GCC Interconnection
57
3-2 Power Factor Improvement Incentives
34
7-5-2 Interconnection with the Arab Republic of Egypt
57
7-5 Electricity Interconnection with Regional Grids:
57
TABLE OF
CONTENTS
Page
Subject
Chapter 8: PUBLIC RELATIONS AND INFORMATION
8-1 Second Publicity Campaign to Inform Consumers about
their Rights and Responsibilities
8-2 The Electricity Industry Statistical Yearbook
58
AFFAIRS
9-1
9-2
9-3
9-4
The Work Environment
Training and Scholarships
Human Resources Development Project
Project for Measurement of the Authority’s Administrative Performance
9-5 ECRA’s Budget
9-6 The General Reserve
74
1-1 Generation
74
1-2 Transmission
76
1-3 Distribution
76
60
1-4 Service Connection to Consumers
82
60
60
61
1-5 Growth Trends in the Past Decade
84
1-6 Fuel Types Used in Energy Production
85
1-7 Energy Unit Cost
86
1-8 Government Subsidy to Reduce Electricity Sale Price to
Consumers
86
1-9 Average Energy Unit Sale Price
87
Chapter 2: THE ELECTRICITY TARIFF
88
2-1 A Brief History of the Electricity Tariffs in the Kingdom
88
2-2 The Current Tariff
90
2-3 Residential Monthly Bill Data
94
Chapter 3: WATER DESALINATION
96
3-1 Production of Desalinated Water
96
3-2 Transportation of Desalinated Water
99
3-3 SWCC Annual Desalinated Water Production Capacity
100
3-4 Production Capacity Factor
100
3-5 Electricity Generation in SWCC
100
3-6 SWCC Restructuring Plan
100
61
61
63
64
10-1 E-Management
64
10-2 “Murasalat” System
64
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64
65
65
65
65
65
PART III
REPORT OF THE ELECTRICITY INDUSTRY
DISPUTE RESOLUTION COMMITTEE
Chapter 1: GENERAL BACKGROUND
68
1-1 Composition of the Committee
68
1-2 Jurisdiction of the Committee
68
1-3 Modus Operandi of the Committee
68
Chapter 2: ACTIVITIES OF THE COMMITTEE
69
2-1 Cases Received by the Committee:
69
2-1-1 Cases on the Docket from Previous Years
69
2-1-2 Cases Received by the Committee in 2013
69
2-2 Comparison with the Previous Year of Cases Received by 70
the Committee and Cases Resolved
2-3 Analysis of Cases by Type of Complaint
THE ELECTRICITY AND WATER DESALINATION
INDUSTRY IN 2013
Chapter 1: THE ELECTRICITY INDUSTRY
Chapter 10: E-MANAGEMENT AND IT
Chapter 11: OTHER ACTIVITIES
11-1 Glossary of the Body of Knowledge on Infrastructure Regulation
11-2 Cooperation with Regional and International Organizations
11-3 Cooperation with King Abdulaziz City for Science and
Technology
11-4 Cooperation with King Abdullah Petroleum Studies and
Research Center (KAPSARC)
PART IV
58
58
8-3 Advertising in the Blue Pages Directory of the Riyadh
58
Chamber of Commerce and Industry
8-4 Participation in Exhibitions Concurrent with Other Activities 59
8-5 Communications with the Media
59
Chapter 9: HUMAN RESOURCES AND FINANCIAL
Page
Subject
71
Chapter 4: PRIVATE SECTOR PARTICIPATION IN THE
ELECTRICITY AND WATER DESALINATION 102
INDUSTRY
4-1
The Electricity Industry
102
4-2
The Water Desalination Industry
103
APPENDIX
AUTHORIZATIONS, LICENSES, AND EXEMPTIONS
FROM LICENSING
THE BOARD OF DIRECTORS
EXECUTIVE MANAGEMENT
105
114
115
9
SUMMARY OF
THE REPORT
10
SUMMARY OF
THE REPORT
SUMMARY OF THE REPORT
11
SUMMARY OF
THE REPORT
This report consists of four parts:
Part I: Contains a general background of the electricity and water desalination* sector in Saudi Arabia including a
EULHIGHÀQLWLRQRILWVFRPSRQHQWVDQGDQRYHUYLHZRI7KH(OHFWULFLW\&RJHQHUDWLRQ5HJXODWRU\$XWKRUity (ECRA).
Part II:$LPVFKLHÁ\WRJLYHDFRPSOHWHSLFWXUHRIWKH$XWKRULW\·VDFWLYLWLHVDQGDFKLHYHPHQWVLQ
Part III: Reports the activities of the Electricity Industry Dispute Resolution Committee***in 2013.
Part IV: Presents a description of the state of the electricity and water desalination industry**** in 2013, and other
issues related to this industry.
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2013 within the purview of its mandate, listed in the order appearing in Part II of this report:
Consumer Care
Updating the “Provision of Electricity Service Manual”.
Publishing a booklet explaining the procedure for submitting consumer complaints.
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Enhancing the complaint handling system.
Dealing with 452 consumer complaints regarding the Saudi Electricity Company (SEC) services, and resolving
about 93% of those complaints.
Continuing participation in the work of the committee responsible for the plan to connect electricity services to
farms, villages, hamlets, and urban settlements.
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security system who receive electricity bill payment assistance.
* 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, which 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.
12
Service Providers Affairs
Creating a new “Department of Service Providers Affairs”.
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service providers.
Handling cases of encroachment on electricity lines rights of way.
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SUMMARY OF
THE REPORT
Tariffs
Issuing a detailed schedule of costs for use of the electricity transmission network.
Cooperating with the service providers to educate and inform those consumers affected by the decision regarding
incentives to enhance the “power factor”.
Issuing a Board decision with a recommendation to the Council of Ministers to set a tariff for peak load consumptions.
Codes and Regulations
The team charged with reviewing and updating the Electricity Law, in which the Authority participated as an active member, has completed its task during the report year. In accordance with standard procedures, the Ministry
of Water and Electricity is undertaking the responsibility of submitting the draft law to higher authorities for
consideration of adoption.
Updating “Provision of Electricity Service Manual”, that included:
Reducing the electricity new service connection from sixty calendar days to thirty workdays.
Changing the billing method for monthly bills that amount to less than SR100.
Appending to the Manual the connection agreement and the consumption agreement.
Requiring the service provider to register the electricity meter in the name of the actual consumer rather than
the property owner.
Consolidating all debts of a single consumer in one record.
Undertaking a study to evaluate the power purchase agreements from the independent power producers (IPPs) and
the independent water and power producers (IWPPs).
Executing a study to develop 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.
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amendments to several articles of the code and approving sixty six exceptions to some articles of the same code.
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amendments to several articles of the code.
Completing translation of the desalinated water code into Arabic by the code supervision committee.
13
Licensing
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licensing:
SUMMARY OF
THE REPORT
Seven permits for electricity generation, cogeneration, and water desalination.
Thirty-eight 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
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Electricity and Water Desalination Plans
Pursuing commitment of SEC to fully implement all parts of the Development of the Electricity Industry Restructuring Plan.
Continuing work on the study of the long term plan for desalinated water and power generation projects, and their
fuel needs.
Constituting a work team to investigate typical types of water and electricity uses.
Quality of Service and Performance Monitoring
Auditing licensees performance KPIs and providing them with recommendations for improvement.
Completing a plan to enhance reliability of the electricity network in the Kingdom.
Developing a strategy for smart meters and smart grids in the Kingdom.
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Continuing participation in the work of the GCC electricity connection advisory and regulatory committee, and
following up developments of the project for grid connection with the Arab Republic of Egypt.
Public Relations and Information
Undertaking preparation for the second TV, press, and other media campaign to educate and inform consumers
about their rights and responsibilities.
Publication of the 5th edition of the Electricity Industry Statistical Yearbook.
Participating in several exhibitions 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 electricity and water conservation; and to answer the general public’s inquiries about the electricity and water desalination industry and its regulation.
14
Human Resources and Finances
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the program till the end of the report year reached 52. They received loans totaling more than SR1.4 million.
Work on the human resources (HR) development project continued. It included reviewing the organizational SUMMARY OF
structure of the Authority, analyzing all staff positions, developing career paths, reviewing the procedure for em- THE REPORT
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quarter of 2014.
Cooperation with the Public Administration Institute continued to implement a project for measuring the Authority’s administrative performance.
Total income from licensing fees reached SR132.9 million.
Total expenses for the year were SR121.8 million, of which SR20 million was allocated for construction of the
Authority’s permanent headquarters building.
E-Management and IT
Replacing the staff desktop PCs with newer models, and replacing the network servers to reinforce the protection.
system.
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Other Activities
Continuing 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.
Continuing cooperation with regional and international organizations in the areas of the Authority’s remit.
Signing a memorandum of understanding (MoU) with King Abdulaziz City for Science and Technology (KACST)
for cooperation to undertake studies and research in water and electricity.
Signing a MoU with King Abdullah Petroleum Studies and Research Center (KAPSARC) to cooperate in carrying
out studies, research, and information development.
15
SUMMARY OF
THE REPORT
16
SUMMARY OF
THE REPORT
PART I
GENERAL BACKGROUND
17
CHAPTER 1
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
PART I
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,
Jubail and Yanbu Electricity and Water Utilities Company (MARAFIQ), and other entities as shown in this report to
engage in any of the electricity activities, e.g. 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.
18
1-2 The Electricity and Water Desalination Industry
The electricity and water desalination industry consists 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, transportation*, and distribution.
SWCC supplies a significant percentage of the energy sold by SEC.
MARAFIQ supplies Yanbu industrial city with its needs for electricity and desalinated water as well as other services.
There is 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 are currently under con-
PART I
struction 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 competition wherever
possible, bolster transparency, and increase efficiency and 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 this area.
There are several IWPPs that have been completed and have began production, while a number are either under construction or in bidding. These projects will provide a significant portion of the Kingdom’s needs of desalinated water.
* In 2011 The National Electricity Transmission Company was established as a limited liability corporation, wholly owned by SEC, for the purpose of transmitting
power from the generation stations to the distribution networks.
** See (The Electricity Industry Restructuring Development Plan) on page 42.
19
CHAPTER 2
OVERVIEW OF THE AUTHORITY
2-1 The Authority’s Goals and Remit
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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 these objectives 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.
PART I
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 their interests, 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 electricity and also in the water desalination industry.
The Electricity Law and the Authority’s Charter delineate the responsibilities entrusted to ECRA by the government to
achieve its objectives. Specifically, these responsibilities cover four areas as follows:
Supply Matters
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; development of unified regulatory accounting and reporting procedures
for electricity, cogeneration, and desalination providers; coordination of the infrastructure of the electricity and water
desalination industry, and development of the expansion plans of these industries.
Consumer Issues
Assessment of tariffs charged for supply of electricity, cogeneration, and water desalination services, periodic review
of these tariffs, and when modification is needed, modifying whatever tariffs fall within its purview while for other
tariffs submitting proposals to the government, protecting interests of stakeholders in the industry, investigating and
resolving complaints by involved parties, and improving industry performance.
Technical Issues
Developing and issuing best practice codes and standards for the electricity and water desalination industry, insuring
compliance of the licensees with these codes and standards, monitoring implementation of the industry development
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conservation measures in coordination with the Ministry of Water and Electricity (MoWE), and handling other relevant technical matters.
Organizational and Administrative Tasks
Defining public interest with regard to the electricity and water desalination industry, developing regulations for
expansion of the infrastructure of the industry, encouraging private sector participation and investments, and issuing
periodic reports to the Council of Ministers on costs and tariffs of electricity, cogeneration, and desalination services.
* 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
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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.
20
2-2 Organizational Structure of the Authority
ECRA is a financially 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 governPHQWRIILFLDOVUHSUHVHQWLQJWKHPLQLVWULHVRI:DWHU(OHFWULFLW\)LQDQFH3HWUROHXP0LQHUDO5HVRXUFHV&RPPHUFH
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“The Board of Directors and Executive Management”, (page 113) shows the composition of the Board in 2013.
As per Article 7 of the Authority’s Charter, the board is the ultimate authority to supervise ECRA’s affairs; adopt policies and plans for its operations; pursue implementation of laws, regulations, and directives related to public policies
and 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 officer of the Authority.
The Governor is assisted by three vice-governors, and a number of permanent and temporary advisors and consultants.
PART I
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, coordinates press interviews for the Authority’s official spokesmen, 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 assets; insures accuracy and completeness of financial and procedural data, and accounting records; insures effectiveness and adequacy of administrative
and financial operations in order to optimize the use of available resources and guarantees compliance with the rules,
instructions, policies and approved plans of the Authority that will allow it to achieve its objectives efficiently and systematically, while at the same time assuring integrity and effectiveness of the internal auditing regime.
Each vice-governor heads a sector of ECRA’s operations as follows:
Vice-Governor for Consumers and Service Providers Affairs
Supervises the following departments:
Consumer Care: handles documentation of consumers’ rights and responsibilities, investigates their complaints and
claims of violations by service providers, prepares cases for referral to the Electricity Industry Dispute Resolution Committee, and periodically reviews causes of consumers’ complaints and disputes in order to suggest appropriate rules and
procedures to resolve them.
Service Providers Affairs: handles documentation of service providers’ rights and obligations, reviews disputes and
claims of violations by a service provider against another or against the Authority, prepares cases for referral to the
Electricity Industry Dispute Resolution Committee, and periodically reviews causes of service providers’ complaints
and disputes in order to suggest appropriate rules and procedures to resolve them.
21
Vice-Governor for Regulatory Affairs
Oversees the following departments:
Technical Affairs: prepares technical studies dealing with regulating the electricity and water desalination industry,
develops rules to insure provision of reliable and efficient services, prepares standards of performance for licensees, and
oversees their compliance with these standards.
Legal and Licensing Affairs: receives applications for authorizations, licenses, and exemptions from licensing; oversees compliance of licensees with the requirements and conditions of the Law and their licenses; prepares contracts and
agreements; drafts and reviews proposed rules, procedures, regulations, and forms used for the industry; and represents
the Authority and defends it in litigations and courts.
PART I
Economics and Tariff Affairs: conducts studies on the economics of the electricity and water desalination industry;
prepares studies for tariff reviews; develops indicators and incentives for consumers and service providers to encourage conservation and improve performance; and maintains the Electricity National Register and updates its contents
periodically.
Vice-Governor for Support Services
Oversees the following departments dealing with the Authority’s internal and back-office operations:
Financial Affairs: includes accounting, purchasing, and storehouse.
Human Resources: handles personnel affairs, employment, training and scholarship programs, health insurance, business travel and personnel services.
Administrative Support: includes mail services, reproduction, photocopying and binding, document scanning, transportation, central archives, and office refreshment services.
3URSHUW\ 0DQDJHPHQW 2IÀFH Oversees office furniture and equipment, space utilization, building maintenance,
janitorial services, and building security.
The structure of the organization chart of the Authority is shown in Figure (1).
22
Figure (1): Organization chart of the Authority
Board of Directors
Governor
Governor's OfÀce
Internal Auditing
IT
PART I
Public Relations
&
Information
Consultants
External Auditor
Vice-Governor,
Regulatory Affairs
Vice-Governor,
Support Services
Vice-Governor,
Consumers and Service
Providers Affairs
Consumer Care
Legal & Licensing
Service Providers
Economics & Tariffs
Technical Affairs
Finance
Property
Management
HR
Administrative
Support
23
TABLE OF
CONTENTS
24
TABLE OF
CONTENTS
PART II
ACTIVITIES AND ACHIEVEMENTS
OF THE AUTHORITY IN 2013
25
CHAPTER 1
CONSUMER CARE
Based on its mission to insure that electricity and desalinated water supplies are adequate, of high quality, with high
reliability, and available at reasonable economic costs; 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 while at the same time 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.
During the report year, the most significant activities of the Authority in the area of fostering the interests of consumers
and protecting their rights included the following:
1-1 Updating “Provision of Electricity Service Manual”
During the report year the Authority updated the “Provision of Electricity Service Manual” which regulates the relationship between the consumer and the service provider and defines the procedures for providing the service to all
categories of consumers.
Section 4-2 of Chapter 4 in Part, II (page 36), gives details for the most salient updated points of the manual.
PART II
1-2 Dissemination of Information Regarding the Mechanism of Submitting Complaints Electronically
In the report year, the Authority published a booklet that illustrates how to electronically submit consumer complaints
regarding the electricity service. The Authority also placed ads in several newspapers to announce the release of a
computer program that permits a consumer to lodge his complaint and follow its progress within the Authority’s departments and outside them.
1-3 Field Visits to Facilities of a Service Provider
Field visits are one of the most important means of interaction with the public and staff of service providers. Through
these visits, the Authority is able to observe conditions at firsthand, and insure accuracy of the periodic reports submitted by service providers.
The field visit locations are determined through statistical analysis of consumer complaints as well as through information gleaned from special studies that indicate trouble areas.
During the year 2013 ECRA staff carried out several site visits to service providers as shown in Table 1. During the
visits, staff met with consumers in the customers service offices. The staff also held meetings with the personnel in
these offices to discuss customers' complaints, learn firsthand some of the difficulties faced by the service providers,
determine the necessary steps to enhance customer service, and increase performance of the distribution network.
The visits also included getting assurance regarding the system of managing the service providers’ contractors; and
evaluating their performance and their supervision in order to verify their compliance with operational requirements
and on the job safety and security while working in proximity to electrical networks.
26
7DEOH6XPPDU\RIÀHOGYLVLWVE\(&5$VWDIIWRVHUYLFHSURYLGHUVLWHV
Location of the Visit
Hayel Electricty Regional
Headquarters
Visit Goals
1- Investigating the frequent power outages in Hayel
Region, discussing their causes, and how to alleviate
them.
9LVLWLQJWKHHPHUJHQF\RIÀFHVWROHDUQDERXWWKHLUWHFKnical and equipment capabilities.
Namass Service Bureau
In situ investigation of several consumer complaints.
SEC Electricity Meters
Maintenance and Calibration
Workshop
Reviewing and auditing of the modus operandi of the
workshop, and auditing the tasks it undertakes in order to
insure compliance with ECRA requirements.
SEC Jeddah Administrative
Headquarters
Investigation of several consumer complaints regarding
the method of bill calculation.
PART II
SEC Riyadh Administrative
Headquarters
Investigation and review of several consumer complaints
Jubail and Yanbu Electricity
and Water Utilities Company
(MARAFIQ) – Jubail site
Investigating the tariff applied to the company’s buildings
and facilities.
1-4 Enhancing the Consumers Complaints Handling System
Consumer care is at the top of ECRA’s priorities to insure that the service is of the highest quality, sufficient quantity,
highly reliable, and priced fairly. The Authority continually strives to improve consumer services especially those concerning lodging of complaints.
During the report year, the Authority introduced several enhancements to the system of filing complaints electronically.
Among the most salient improvements are the following:
Developing the procedure of sending SMS messages to the consumer to advise him of the status and progress of his
complaint.
Adding a section on frequently asked questions (FAQ).
The Authority continued its efforts to disseminate information to the public and make it aware of the process of filing
complaints through the system (See Section 1-2 in Chapter 1 of Part II, page 26). The Authority’s staff also assisted
consumers who did not have computer access to file complaints on their behalf.
27
1-5 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 46). It also carries out analytical and statistical studies of 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 concentrated efforts to define the causes of complaints and resolve them to achieve the goal of
improving the service and reach a high level of consumer satisfaction through the following measures:
3HUIRUPLQJWHFKQLFDODQGOHJDODQDO\VHVRIWKHFRPSODLQWVWRÀQGRXWWKHURRWFDXVHVXQGHUO\LQJWKHPDQGZRUN
on resolving them.
,QWHUDFWLQJZLWKWKHVHUYLFHSURYLGHUVWRRYHUFRPHWKHGLIÀFXOWLHVWKDWPD\KLQGHUUHVROXWLRQRIWKHSUREOHPVDQG
PDNHÀHOGYLVLWV²LIQHFHVVDU\LQDWWHPSWLQJWRUHDFKVDWLVIDFWRU\VROXWLRQV
Insuring effectiveness of the service providers’ procedures to handle complaints, and introducing enhancements
to the “Provision of Electricity Service Manual” or performance KPIs – as needed.
Utilizing results of complaint studies in designing public relations campaigns carried out by the Authority.
PART II
During the report year, the Authority received 452 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
Western
Sector
Hayel
Madinah
Makkah
Jeddah
Taif
Buraidah
Riyadh
Central
Sector
Dammam
Arabian
Gulf
Eastern Sector
Red
Sea
Al-Baha
Southern Sector
Najran
Abha
Jazan
Farasan
Islands
Arabian Sea
28
Table 2 shows the number of complaints categorized by complaint type and the sector where it originated.
By the end of the report year, the Authority resolved 93% of these complaints; the remainder are still under study, review, and follow up.
7DEOH&RPSODLQWVUHFHLYHGE\(&5$LQFODVVLÀHGE\W\SH
and SEC business sector where they originated
The SEC Business Sector Where the Complaint Originated
Complaint Type
Total
Eastern
Central
Western
Southern
Service Connection
6
41
31
20
98
Billing and Tariffs
54
23
96
14
187
Removal of Cables
5
8
13
19
45
Service Outage
2
20
25
29
76
Quality of Service
1
2
2
5
10
Other Complaints
7
6
15
8
36
75
100
182
95
452
Toral
PART II
Studying the information in the table:
The total number of complaints received in 2013 decreased markedly, by 32%, compared to the previous year.
The number of billing complaints jumped 43% from the previous year. Most of these complaints originated in the
Western Sector. Upon study of this issue, it became evident that SEC had increased its use of computer programs to
audit the bills and examine the meters physically in situ. As a result of this effort, the company was able to determine
if the meters were malfunctioning or they had been tampered with. Subsequent corrective measures lead to a rise in
this type of complaint.
Complaints concerning new service connections rose by approximately 11% compared to the previous year. This type
of complaint included the following:
Complaints of delay in getting the connection.
Complaints regarding the cost of the service connection.
Complaints of property owners who do not possess titles to their lots.
The number of complaints regarding service outages decreased substantially, by almost 80%, compared with the
previous year. Most of these complaints originated in the Southern or Western sectors.
29
The category labeled “Other Complaints” in Table 2 includes complaints regarding requests for transfer of meters to
other locations, establishing emergency centers, objecting 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 tariffs and billing represent about
40% of the total, while complaints
about service connections represent
about 22%.
Figure (3): Percentage distribution of the types of
complaints
Quality of Service 2%
Other
Complaints
8%
Service
Disruptions
17%
Relocation of
Substations and
Transformers
3%
n of for
catio uests
Relond Reqon 7%
les a nsati
CabCompe
Srvice
Connections
22%
Billings and Tariffs
41%
PART II
Viewing complaints by the SEC business sector from which they originated
(Figure 4), it is clear that most of the
complaints, almost 40%, were in the
western sector.
Figure (4): Percentage distribution of complaints by
the SEC sector where they originated
Eastern Sector
17%
Southern Sector
21%
30
Central Sector
22%
Western Sector
40%
Western Sector complaints are attributed mainly to problems of billings and tariffs as was explained in the preceding
paragraphs, while complaints from the Central Sector were mostly caused by service connection delays.
The complaints of the Southern Sector were largely caused by service outages which are attributed to the following:
The major portion of the electricity network in the Southern Sector is composed of overhead lines and thus it is negatively impacted by adverse weather conditions.
The sector network serves many scattered and widely separated villages and hamlets that require long overhead lines
to provide the service. These locations are in rather inaccessible mountainous regions that make maintenance operations very tenuous, and resumption of service in case of disruption takes a very long time.
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 electricity transmission and distribution operations. See Section 7-2
(page 52) that deals with the electricity service in general and tardiness of service connections.
Based on the information derived from measurement and auditing of performance KPIs (Section 7-1 page 46), the
Authority pursues with SEC implementation of the recommendations that delineated the service performance improvement procedures. 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.
PART II
1-6 Plan to Provide Plantations, Villages, Hamlets , and Urban Settlements with Electricity Service
A standing committee composed of members from MoWE, ECRA, and SEC continually updates the plan to connect
the electricity service to all approved plantations, villages, hamlets, and urban settlements throughout the Kingdom.
Implementation of the plan is self-financed by SEC.
As of the end of the fiscal year 2013, 80% of the plan was completed.
In the report year, the committee continued its work and commenced work to develop a new quinquennial plan for the
years 2015-2019.
(OHFWULFLW\%LOO3DUWLDO6XEVLG\WR%HQHÀFLDULHVRIWKH6RFLDO6HFXULW\6\VWHP
Pursuant to the agreement for cooperation 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 beneficiaries of the social security program which was launched on July 23, 2009.
During the report year the number of electricity meters of beneficiaries covered by the program increased from around
270,000 to around 350,000. 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.
3URSRVDOWR([SDQGWKH&DWHJRULHVRI%HQHÀFLDULHVRIWKH(OHFWULFLW\%LOO3DUWLDO6XEVLG\
During the report year, the Authority took advantage of the experience it gained from the program with MoSA for partial subsidy of the electricity bill for beneficiaries of the social security system to develop a proposal to provide similar
assistance to another class of low-income citizens for whom there exist clear and verifiable 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 put government subsidy to the
electricity industry on rational basis by directing it to the really needy categories. This process will make it possible
in 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.
5
HFLSLHQWVRIWKHVRFLDOVHFXULW\V\VWHPEHQHÀWVLQWKH.LQJGRPDUHWKHORZLQFRPHIDPLOLHVDQGLQFOXGHRUSKDQVZLGRZHGRUGLYRUFHGZRPHQIDPLOLHVRI
persons in the penal system, and those without a provider. At the time of the report this group numbered around 700,000 recipients, representing about 10% of
residential electricity consumers.
31
CHAPTER 2
SERVICE PROVIDERS AFFAIRS
2-1 “Service Providers Affairs” Department
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 needs of the service providers and advance issues and matters of interest to them. In particular, the department will
focus on the following areas:
Documenting the rights and responsibilities of the service providers.
Pursuing violations against the service providers’ facilities, and investigating disputes between service providers with
a view to resolving them.
Overseeing adherence of the service providers to the conditions of their licenses and requirements of the Development
of the Electricity Industry Restructuring Plan.
Investigating electricity and water desalination industry accidents.
During the report year, a director of the department along with several staff members were appointed.
2-2 Electricity and Water Desalination Industry Accidents
PART II
In 2013, there were seven accidents in the electricity industry that seriously affected the safety of personnel and property. The accidents resulted in four fatalities and seven injuries to SEC’s and its contractors’ staff.
The Authority reviewed and audited details of these mishaps and informed SEC about the measures it must undertake
to avoid repetition of such accidents. It also pursued with the company an effort to insure implementation of previous
recommendations which required it to establish and put into action a comprehensive safety program.
2-3 Transgression against the Service Providers Facilities
,QWKH0LQLVWHURI:DWHU(OHFWULFLW\LVVXHGDQH[HFXWLYHRUGHUUDWLI\LQJWKH%\ODZVRI5XOHVRI$IIDGDYLWVDQG
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 ministerial order included delegation to ECRA’s Governor powers, in conformity with the bylaws, to impose fines,
cost of repairs, and compensation for damages resulting from infringement against facilities of the electricity utility.
In order to determine the most appropriate mechanisms to carry out these resposibilities, the Authority organized three
workshops with SEC to discuss procedures to investigate cases of agression against the company’s facilities. The Authority also formed the “Committee for Review of Complaints and Violations Involving Transgressions against Service
3URYLGHUV)DFLOLWLHVDQGFKDUJHGLWZLWKWKHUHVSRVLELOLW\RILQYHVWLJDWLQJYLRODWLRQVDQGDGMXFDWLQJWKHP
Shortly after it was formed, the committee commenced reviewing cases of violations and transgressions against service
providers facilities that were transferred to it by SEC. The number of cases thus transferred was 4,834 divided into two
main categories:
Tampering with meters
2284 cases.
Transgression on the network or facilities
2550 cases.
* See Section 6-1 the “Development of the electricity industry restructuring plan”, page 42.
32
Table (3) shows details of transgressions in each SEC business sector.
Table (3): Number of breaches against
facilities of SEC in each business sector in 2013
Breaches
Business Sector against Network
or Facilities
Eastern
501
Meter
Tampering
Total
234
735
Central
520
595
1115
Western
920
735
1655
Southern
609
720
1329
Total
2550
2284
4834
PART II
2-4 Handling Encroachments on the Electricity Lines Rights of Way
In the past few years, the Authority observed an increase in the number of cases of encroachments on the electricity
transmission and distribution lines, especially encroachments caused by growth of trees in agricultural areas. Such
encroachments adversely affect the safety and reliability of the electricity network.
The Authority dealt with this issue through update of the “Provision of Electricity Service Manual”* where a clause was
inserted to prohibit such encroachments. The clause also included statements to the effect that the service provider has
the right to compel the offender to remedy the encroachment or bear the costs of rectification himself.
,QFOXVLRQRI(&5$6HQLRU2IÀFHUVLQ6(&·V$XWRPDWLF$OHUW6\VWHPIRU0DMRU(OHFWULFLW\2XWDJHV
During the report year, ECRA reached an agreement with SEC to include the Authority’s senior officers in the company’s alert system list for major electricity outages. It is expected that this arrangement will allow better communication
between the Authority and the company in the areas of service recovery to consumers and enable the Authority to deal
more effectively with complaints regarding electricity service outages.
* See Section “4-2 Updating “Provision of Electricity Service Manual”, page 36.
33
CHAPTER 3
TARIFFS
Among ECRA’s primary concerns are that tariffs must be cost reflective, fair and 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.
Developing a comprehensive system to collect financial and operational data from all 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.
On the other hand, the efficient use of the available energy sources, depletion of resources and protection of the environment, as well as economic factors require that all countries must embrace policies which are sustainable for the future.
Thus, ECRA is keen that the tariffs in the Kingdom must reflect those concerns 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 they improve the efficiency of the power system.
ECRA’s tariff activities in 2013 were as follows:
PART II
3-1 Charges for Use of the Transmission Network System
One of ECRA’s main responsibilities is to develop restructuring of the electricity industry. Paragraph 2 of Article 11
of the Electricity Law states that one of ECRA’s charges is the responsibility to “Enable any Licensee, as required, to
connect to and use transmission and distribution systems owned by other Licensees on a non-discriminatory basis…”
To discharge this responsibility, the Authority issued in the report year a detailed schedule listing the charges of using
the transmission network. The schedule is to be effective as of the start 2014. In developing the schedule, consideration
was made of optimizing the use of generation and transmission network assets, and insuring accessibility and use by all
licensees on a non-discriminatory basis.
3-2 Power Factor Improvement 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 the service to new consumers
without the need for additional investment by the service provider or an increase of the transmission and distribution
networks capacities.
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 1000MW (1GW). The benefits of this action include: a saving of investment in generation alone of
not less than SR4 billion, savings of other investment costs that would have been required to enhance the transmission
and transportation networks, as well as savings in costs of fuels and operation, and reducing the energy loss in the
network.
But improvements in the power factor require the consumer to make substantial investments to acquire equipment that
produces reactive power in his premises. 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. So, in
the long run, he realizes sizable savings. The consumer and the service provider, thus, gain.
7KH3RZHU)DFWRULVGHÀQHGDVWKHUDWLRRIWKHUHDOSRZHUXVHGE\WKHFRQVXPHUWRWKHDSSDUHQWSRZHU7KHDSSDUHQWSRZHULVWKHVXPRIWKHUHDOSRZHUDQGWKH
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 to provide the consumer with reactive power when the latter generDWHVLWKLPVHOI3URYLGLQJUHDFWLYHSRZHUE\WKHVHUYLFHSURYLGHUUHSUHVHQWVDQXQMXVWLÀHGDGGLWLRQDOEXUGHQRQWKHSXEOLFQHWZRUNWKDWKLQGHUVLWVDELOLW\WRFDUU\
larger quantities of real power. It also increases power losses in the transmission and distribution networks. The international practice is for each consumer to
import as little reactive power as possible.
34
In accordance with international practices, ECRA’s board adopted a decision in 2013 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 than 0.85.
A tariff of SR 0.5/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 the official gazette.
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.
After passage of five Hijri years, commencing on November 16, 2012, the 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 a publicity campaign to
make the consumers affected by the decision aware of its implications to them, in preparation for commencing implementation of the decision as of May 1, 2014.
PART II
(QHUJ\LVHQHUJ\LQHIÀFLHQW*DVNHW
** (K. Far.s): The unit of measurement of energy Gasket, where var = volts x amps.
35
CHAPTER 4
LAWS AND REGULATIONS
In the area of laws and regulations, the Authority’s activities in 2013 included the following:
8SGDWLQJWKH(OHFWULFLW\/DZ3URMHFW
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 with the aim of making major revisions that reflect the past experience of working under
the current law, incorporating the latest developments in the field in keeping with international best practices in the
electricity and water desalination industry. The revisions are also aimed at incorporating requirements of the electricity and water desalination industry, especially with regard to regulations concerning water desalination, and the use of
atomic and renewable energy in electricity generation and water desalination.
During the report year, the team completed its work. MoWE will submit the draft law in 2014 to the appropriate authorities for consideration in accordance with standard procedures.
PART II
4-2 Updating the “Provision of Electricity Service Manual”
During the report year, the Authority undertook updating the “Provision of Electricity Service Manual” which regulates
the relationship between the consumer and the service provider and outlines the procedures for providing service to all
categories of consumers.
The update included a digest of the lessons ECRA gained from implementing previous editions of the manual, and
results of statistical and field studies of consumers 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:
4-2-1 Reducing the Period for a New Service Connection
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 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
a 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 that result in unnecessary expenses, thus negatively impacting financial performance, and consequently affecting
the service providers' performance of their duties towards consumers.
36
In order to deal with this issue of bills whose values do not exceed SR100 monthly, the manual contained approval of
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 an SMS to the consumers’ mobile phone.
The manual carried statements emphasizing that all classes of consumers continue to benefit from the “consumption
blocks system”.
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 define the responsibilities to be carried out by the consumer and by
the service 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 local newspapers soliciting public comments on the documents prior to their adoption and inclusion in the manual.
4-2-4 Updating the Rules for Service Disconnection and Collection of Debts
In addition to the modifications delineated in the preceding sections, the manual included clarifications and amendments, among which tackling two issues that have been, for a long time, the subject of suffering by both the consumer
and the service provider:
The first is the name under which the electricity meter is registered. The service provider used to register the meter
in the name of the property owner. This practice created many difficulties for the property owners and the service
providers to collect energy consumption debts, either because of the delinquency of tenants in paying costs of the
electricity service or by failure to pay when they move out of the rented property.
The second problem is possession of 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.
PART II
The Authority dealt with these two issues in the manual update in the following manner:
Advising the service provider to register the meter in the name of the actual consumer, rather than the name of the
property owner.
Recording 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 reducing meter tampering and complaints arising from this problem, 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.
* 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 of Saudi Arabia (KSA).
37
4-3 Study to Evaluate Power Purchase Agreements from Independent Power Producers
The Authority is keenly interested in maximizing the benefits of private sector participation in the electricity and
water desalination industry. Currently, it is engaged in an effort to define a methodology for this participation built
on a scientific, clear, and transparent basis that can guarantee optimum participation in generation.
The Authority hired an international consulting firm, with expertise in finance and regulation, to prepare a study on
how to maximize the benefits of participation of the IPPs and IWPPs, and make the participation compatible with
the Kingdom’s policies of moving toward a competitive electricity market, while at the same time still preserving an
attractive environment for investments.
The study focused on taking advantage of regional and international experiences. It also concentrated on analyzing
the generation system to determine optimum capacities; determining the types of technologies that the independent
power producers can use and the effect of these technologies on competition. Furthermore, the study dealt with defining the various alternatives to mitigate the possible risks that may hinder arriving, in the near future, at an electricity
market capable of sustainable competition.
PART II
The most important outcomes of the study included emphasis on the importance of independence of both the “principal buyer” and the transmission company. They also included the development of a clear roadmap to arrive at a
competitive electricity market; and the inclusion in future agreements of provisions that achieve, with the passage of
time, reduction of the quantities contracted for with the independent producers in order to expand the capacities available for competition in the market. The agreements would also include the provision that the amounts of decreased
capacities increase with gradual progress towards reaching the competitive market.
To increase the efficiency of fuel utilization and the margin of competition among the various producers, the study
emphasized the importance of pricing fuels on the basis of “opportunity cost” instead of the current subsidized prices,
and developing a clear mechanism to give subsidies directly to the distribution and the service provision activities.
The action to redirect subsidies guarantees shielding the consumer from effects of any changes in fuel prices, while
at the same time it allows the electricity generation and transmission activities to operate on a commercial basis
which helps conservation of fuel consumption, increases efficiency of the electricity system, and creates a reasonable
degree of competition among the generation plants.
4-4 Preparation of a Framework for Regulation of Electricity and Desalinated Water Production Using
Atomic and Renewable Energy
During the report year, the Authority commenced preparation of a study to develop regulations, procedures, and
license forms for projects using atomic and renewable energy for production of electricity and water desalination.
The Authority, in a spirit of cooperation with King Abdullah City for Atomic and Renewable Energy (K.A.CARE),
undertook this study to develop a regulatory framework for the activities of electricity generation, cogeneration, and
water desalination production using atomic and renewable energy.
The study is aimed at defining the boundaries of the Authority responsibilities as the regulator of matters concerning
projects using atomic and renewable energy for production of electricity and water desalination, and the extent of
convergence or divergence with the responsibilities of (K.A.CARE) in view of regional and international experiences
in this field. It also aims at preparing regulations for electricity and water desalination activities that are connected
with atomic and renewable energy insofar as they fall within ECRA’s remit. The regulations will be prepared either
through amendments to the existing laws and regulations, or through drafting new ones.
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. Work is still in progress
on making license forms for the systems of electricity generation, desalinated water production, and trading in products of electricity and desalinated water for projects that use atomic and renewable energy to produce electricity and
desalinated water. The work also includes preparing the requirements and conditions for obtaining licenses for these
types of activities.
The study is expected to be completed in the second quarter of 2014.
38
4-5 Codes Supervision Committees:
Each code supervision committee undertakes periodic review and update 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.
4-5-1 The Saudi Transmission Code
In 2013, the committee held four meetings, made five recommendations for modifications to some of the code
articles, and recommended sixty six exceptions from the code articles. The Authority’s Board accepted all recommendations.
Also during the same year a member representing K.A.CARE joined the committee to cover issues regarding connecting sources using atomic and renewable energy to the electricity grid.
4-5-2 The Saudi Distribution Code
The committee holds its meetings quarterly. During the report year, the committee submitted five recommendations
for modifications to code articles which were approved by the Board.
4-5-3 The Water Desalination Code
The committee held three meetings during the report year. It completed translation of the water desalination code
from English into Arabic, built a database for SWCC’s desalinated water transportation lines, started work to add
transportation lines of other producers, and began development of detailed regulations to implement the code and
pursue compliance with it.
PART II
39
CHAPTER 5
LICENSING
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 and requirements to protect 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.
PART II
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.
(OHFWULFDODFWLYLW\$FFRUGLQJWRWKHGHÀQLWLRQVFRQWDLQHGLQWKHHOHFWULFLW\V\VWHPPHDQVDQ\DFWLYLW\RIWKHDFWLYLWLHVFRQWDLQHGLQWKHLQGXVWU\HOHFWULFLW\DQGZDWHU
desalination.
40
In 2013 the Authority completed the following tasks in the area of licensing:
5-1 Permits
In pursuit of its objectives to encourage investment in the electricity and water desalination industry, the Authority
issues permits to interested parties to allow them to commence preliminary preparation work (including feasibility studies, planning, and technical investigations) before they start actual activities.
In 2013 the Authority issued 7 permits distributed as follows (Table 28, page 106):
Two permits for electricity generation.
Three permits for cogeneration.
Two permits for water desalination.
These permits were issued to six entities.
5-2 Licenses
Licenses are issued at least 30 days before construction commences. In 2013 the Authority issued, or reissued (renewed)
38 licenses (Table 29, page 107) as follows:
Thirteen licenses for electricity generation.
Nine licenses for cogeneration.
Five licenses for water desalination.
Two licenses for electricity transmission.
One license for transportation of desalinated water.
Two licenses for electricity distribution and retailing.
Two licenses for trading in electricity.
Three licenses for trading in desalinated water.
One license to own an electricity transmission network.
These licenses were issued to 30 entities.
PART II
5-3 Exemptions from Licensing
The Electricity Law specifies that no person may undertake any electricity activity without 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.
By the end of 2013 ECRA issued, or renewed 19 exemptions from licensing (Table 30, page 110) as follows:
Thirteen exemptions for generation plants.
Five exemptions for cogeneration plants.
One exemption for a desalination plant.
These exemptions were issued to seventeen entities.
5-4 License Forms
In 2013, the authority continued discussion with SEC regarding the final form of the Principal Buyer’s license since his
activity is closely tied to the Development of the Electricity Industry Restructuring Plan that is being implemented by
the company. The license form is expected to be submitted to ECRA’s Board in 2014 for approval.
41
CHAPTER 6
ELECTRICITY AND WATER DESALINATION PLANS
During 2011 ECRA’s activities included work on the following plans for the electricity and water desalination industry.
6-1 Development 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 industry (i.e., generation, transmission, and distribution) and moving it from the
current vertically integrated structure (Figure 5) into an environment of competitiveness on an economic basis through
the following steps:
PART II
42
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 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.
Creation of several competing entities in the field of generation.
Introducing competition in wholesale electricity services to the distribution companies and large consumers.
In the long run, introducing competition in the field of distribution and
service provision to consumers.
Figure (5): Current organizational structure of the
electricity industry in the Kingdom.
Saudi Electricity Company
(SEC)
Generation
n
(Other
her Entities)
Generatio
on
(SEC)
Transmission
n
Distribution
Consumerrs
Generation
(SWCC)
Figure (6) shows the organizational structure of the industry in the first phase of implementation of the plan.
Figure (6): Structure of the electricity industry after completion
of Phase I of the restructuring plan
Saudi Electricity Company
Independent
Generation
Independent
Generation
Cogeneration
Independent
Generation
Cogeneration
Cogeneration
Independent
Generation
Independent
Generation
Generation
Company
Generation
Company
Generation
Company
PART II
Cogeneration
Cogeneration
Transmission
Distribution
company
Consumers
Distribution
company
Consumers
Distribution
company
Consumers
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.
43
In 2013 ECRA continued discussion with SEC regarding the plan’s implementation timetable. The following milestones were achieved:
SEC committed to undertake the following:
Establish the independent electricity system operator in 2014 who will be responsible for the load control centers, operation of the network on an economic basis, and maintaining the security of supplies.
Establish four generation companies wholly owned by SEC, which will commence operation one by one sequentially in 2014.
Establish a distribution company that will commence operations in 2014, and develop plans to eventually break
it up into several local distribution companies in order to bolster competition and increase the efficiency of
providing the service to consumers.
SEC reported that it completed defining the tasks of the special unit, within the holding company, that will carry
out the role of the principal buyer as well as completing definition of its organizational structure and writing the
draft of the agreement that will be signed between all the new companies and the holding company. This unit is
expected to start its activities in 2014.
The Authority has formulated a structure, which was approved by its Board, for the charges to use the transmission system.
PART II
In spite of the obvious delays in implementing the restructuring plan from the approved timetable, it is expected
that with the completion of the steps outlined above the first phase of restructuring, which represents unbundling of
activities, will be concluded in the near future.
During the report year, the Authority commenced a study to develop a roadmap for the move to a competitive electricity market. The study includes evaluation of the current state of the electricity industry; and setting the requirements for transition to the second phase of the plan, which entails opening competition in the wholesale market and
establishing the parallel market. Furthermore, it includes setting the required conditions for transitioning to the third
(last) phase of the restructuring plan, which is formation of the competitive electricity market. The situation then
will be characterized by the existence of several companies competing in generation, several distribution companies, and a number of service providers (Figure 7). There will also be a spot market for electricity trading as well as
a parallel market for bilateral supply and trading in electrical energy.
Figure (7): Electricity industry structure
after full implementation of the plan
Saudi Electricity Company
Independent
Generation
Independent
Generation
Independent
Generation
Generation
Company
Generation
Company
Generation
Company
Independent
Generation
Cogeneration
Cogeneration
Cogeneration
Cogeneration
Principle Buyer
Transmission
Service
Provider
Service
Provider
Service
Provider
Service
Provider
Consumers
Consumers
Saudi Electricity Company
Distribution
Company
Consumers
44
Consumers
Consumers
Distribution
Company
Consumers
Distribution
Company
Consumers
Cogeneration
/RQJ7HUP3ODQIRU:DWHU'HVDOLQDWLRQDQG(OHFWULFLW\*HQHUDWLRQ3URMHFWVDQG'HWHUPLQDWLRQRIWKHLU
Fuel Needs
During the report year, the Authority, in cooperation with the Ministry of Petroleum and Mineral Resources, MoWE,
SWCC, Saudi Aramco, SEC, and the National Water Company (NWC) commenced a study to develop a long-term
plan for the electricity generation and water desalination projects, and to determine their fuel needs for the period
from 2016 to 2040. The scope of the study includes determination of the demand for electricity and water, development of a plan to create a high efficiency system to produce 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
technologies that promote economizing production costs, increasing efficiency of fuel utilization, and minimizing
environmental impacts of electricity generation and water desalination production.
The study also takes into consideration introduction of the use of atomic and renewable energy for production of
electricity and water desalination, and the effect of using these technologies on the plans for electricity and desalinated water production using traditional fuels. 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.
The study is being carried out by a team of experts from the various constituencies of interest along with a group of
local and international consultants.
During the report year the team continued its work on the study which is expected to be completed in the first quarter
of 2015.
PART II
6-3 Study of Water and Electricity Uses
The Authority has a keen interest in improving the efficiency of providing the services of electricity and water desalination, raising the efficiency of their long term planning, and determining the costs of providing their services
to the various categories of consumers. Carrying out these tasks requires undertaking studies to obtain detailed data
concerning 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:
Using water for laundry, dishwashing, personal hygiene, toilet flushing, house yard washing, garden irrigation,
and industrial purposes.
Using electricity for lighting, air-conditioning, and heating.
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 daily weekly, monthly, and seasonal patterns of use of both water and electricity.
During 2013 the Authority created a work team composed of members of its staff and representatives of the Ministry
RI3HWUROHXP0LQHUDO5HVRXUFHV0R:(6:&&6(&6DXGL$UDPFRDQG1:&WRXQGHUWDNHWKLVVWXG\7KH
objectives of the study are determining the types of electricity and water use, obtaining detailed information regarding the consumption patterns and trends in the various regions of the Kingdom through the use of accurate measurements of consumption and through development of mathematical and statistical models for use in predicting future
loads and for developing programs for demand-side management on an accurate scientific basis.
The team drafted a scope of work for the study, and sent invitations for consultants specialized in this work. The
experimental portion of the work is expected to be completed in 2014. The first phase of the study aims to develop
the methodology that will be applied to the remaining regions of the Kingdom. The study is expected to continue
till the end of 2015.
45
CHAPTER 7
SERVICE QUALITY AND PERFORMANCE MONITORING
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 financial incentives program* based on the KPIs
was also developed so that service providers whose performance exceeds the set standards are rewarded, while financial
penalties are assessed from those who underperform them.
In 2013, the Authority performed the following activities in the area of quality of service, and performance monitoring:
PART II
7-1 Auditing Licensees’ Performance KPIs
In the past few years, the Authority developed a system for the electricity industry 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 its service to consumers to rise to the levels of the industrially developed countries.
Furthermore, these KPIs will have technical and regulatory importance once the competitive electricity market is established.
The Authority selected 26 performance KPIs for the various electricity industry activities (generation, transmission,
distribution, customer service).
In 2013, the Authority audited the performance KPIs data for 2012 at the level of branches for five licensed entities.
* The ÀQDQFLDOLQFHQWLYHVSURJUDP has not been activated yet.
46
To verify the accuracy of data and correctness of the recording procedures, a team of ECRA staff made 22 visits to
business locations of licensed entities as shown in Table 4. The Authority issued a report on the results of auditing that
included recommendations to improve those activities whose performance level was less than the minimum acceptable.
Table (4): Sites where electricity industry activities
performance KPIs were audited
No.
Licensed Entity/ Licensed Activity
1
SEC – Generation
Number of
Sites
4
2
National Electricity Transmission Company – Transmission
2
3
SEC – Distribution
4
4
SEC – Customer Service
4
9
Power and Water Utility Company for Jubail and Yanbu
(MARAFIQ) – Generation
Power and Water Utility Company for Jubail and Yanbu
(MARAFIQ) – Transmission
Power and Water Utility Company for Jubail and Yanbu
(MARAFIQ) – Distribution
Power and Water Utility Company for Jubail and Yanbu
(MARAFIQ) – Customer Service
Saudi Aramco – Generation
10
SWCC- Generation
2
11
5DELJK(OHFWULFLW\:DWHU&RPSDQ\²*HQHUDWLRQ
1
5
6
7
8
Total Number of Sites Visited
1
1
1
PART II
1
1
22
The reports were sent to the licensees. They were informed of ECRA’s recommendations for actions to be taken to
improve the process of calculating the performance indicators. 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 information and to explain the basis on which the
indicators were formulated, how the data can be collected, and how the indicators can be calculated.
The outcomes of auditing the performance KPIs varied between the licensees. Some were good; some were acceptable;
some needed development; and some were wrong. The errors were attributed to various difficulties such as misunderstanding of some indicators, incomplete data, lack of raw data records, and similar difficulties that the Authority is
working on remedying.
Figure (8) shows results of measuring the availability factor*, which indicates the availability of licensees' generation
plants** to generate electricity during the years 2010-2012
* 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 the
period.
** At the present time, there are three types of electricity generation plants in the Kingdom:
Simple Cycle Plants:$W\SHRIHOHFWULFLW\JHQHUDWLRQSODQWWKDWXVHVJDVÀUHGWXUELQHVZKHUHWKHJDVSURGXFHGIURPEXUQLQJWKHIXHOLVXVHGWRWXUQWKHWXUELQHV
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.
%XLOGLQJDSODQWRIWKLVW\SHLVFRQVLGHUHGOHVVH[SHQVLYHWKDQWKHRWKHUW\SHV+RZHYHULWVHIÀFLHQF\LVORZUDQJLQJEHWZHHQ
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:,QWKLVW\SHRISODQWDJDVWXUELQHLVXVHGWRJHQHUDWHHOHFWULFLW\WKHÀUVWF\FOHDQGWKHH[KDXVWKHDWLVUHF\FOHGDQGXVHGWRUXQDVWHDP
WXUELQHWRJHQHUDWHHOHFWULFLW\WKHVHFRQGF\FOH7KLVW\SHRISODQWKDVDKLJKUDWHRIIXHOHIÀFLHQF\LQWKHUDQJHRI
47
60%
48
Saudi Aramco
Jubail Water & Electricity
Rabigh Arabian Water & Electricity
Shuqaiq Water & Electricity
Shuaibah Water & Electricity
MARFIQ-Combined Cycle
MARFIQ-Simple Cycle
SEC-Combined Cycle
SEC-Steam Cycle
SEC-Simple Cycle
PART II
SWCC
Availability Factor (%)
Figure (8): Results of measurements of the availability factor for the years 2010-2012
Fiscal Year 2010
Fiscal Year 2011
Fiscal Year 2012
100%
Target
(Max 85%)
90%
80%
70%
Figure (9-A) indicates the average time of electricity outage (in minutes) for SEC clients in the main regions and
cities of the Kingdom in the years 2010-2012, while figure (9-B) illustrates the average number of outages during
the same period.
Figure (9-A): Average time of outages (in minutes) for
each consumer in the years 2010-2012
Fiscal Year 2010
Fiscal Year 2011
Baha
Average Time of
interuuption for the Kingdom
(Saudi Electricity Company)
Jazan
Najran
Asir
Jawf
Northern Borders
Ahsa
Dammam
Taif
Madinah
Tabuk
Jeddah
Makkah
Kharj
Dawadmi
Qasim
Hayel
PART II
Riyadh Region
1100
1050
1000
950
900
850
800
750
700
650
600
550
500
450
400
350
300
250
200
150
100
50
0
Riyadh City
Average Time of Interruption
(minutes)
Fiscal Year 2012
49
0
50
Average Time of
interuuption for the Kingdom
Baha
Jazan
Najran
Asir
Jawf
Northern Borders
Ahsa
Dammam
Taif
Madinah
Tabuk
Jeddah
Makkah
Kharj
Dawadmi
Qasim
Hayel
Riyadh Region
Riyadh City
PART II
Number of Interruptions
Figure (9-B): Average number of electricity service outages
per consumer annualy for the years 2010-2012
Fiscal Year 2010
Fiscal Year 2011
Fiscal Year 2012
25
20
15
10
5
Figure (10) shows the unsupplied power index* for the years 2010-2012.
Figure (10): Usupplied power index 2010-2012
0.009
0.008
0.007
National Electricity
Transmission Company
0.006
MARAFIQ
0.005
0.004
0.003
Target
0.002
(Maximum 0.0008)
0.001
0
2010
2011
2012
PART II
This index reflects the reliability of the transmission network. When the value of the index increases, lost power increases
due to outages in the various components of the transmission network. Thus, the consumer confidence in the reliability of
the service decreases, while a decrease in the value of the index signals improvement of the service.
It is evident from the figure the continued decline in the value of the index for both MARFIQ and NETC service providers since the Authority began tracking it as a KPI. This clearly which indicates improvement of the service performance.
Results of the KPIs indicated great variation of the service performance level between regions. While the desired target
was achieved in some of the regions for some of the KPIs, it is still well below the desired level in others (Figure 9).
To overcome this difficulty and resolve it, the Authority prepared a plan to enhance reliability of the electricity network
in the Kingdom as described in the following section.
* The unsupplied power index: The percentage of lost power, measured in kW, as a result of power outages in the network throughout the year to the total power
carried by the network during the same period.
51
7-2 Plan for Enhancing Reliability of the Electricity Network
To insure that electricity service is secure and reliable, the Authority formed a work team which included members from
MoWE, SEC, and that National Electricity Transmission Company 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.
To define the possible areas of improvements, the team carried out the following tasks:
Statistical Analysis
Which 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 Assets
Which included the following:
Making field visits to view the network assets.
Reviewing maintenance procedures and volume of work.
Reviewing the specifications and construction.
PART II
Studying the Network Operating Methods and Operational Requirements
Which 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 Network Planning Methods
Which 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 outage 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.
* Feeder: A branch line to transmit electricity from a main line to a substation for distribution to consumers.
52
The study determined the highest ten causes of electricity outages in the SEC distribution network which impacted
its consumers (Table 5).
Table (5): Principal causes of electricity outages
and percentages of outage times in 2012
Total Time for Outages Percentage of Total
Exceeding Five Minutes
Outage time
(in minutes)
Cause of Outage
Maintenance
158,441,248
16%
Field Work (such as making
connections for new customers)
148,521,340
15%
Network Improvements
29,395,754
3%
Repairs
25,111,642
2%
Transient Damages
183,412,797
18%
Cable Damages due to
Connection Failures
61,661,611
6%
Cable Deteriorations
55,446,729
5%
Cable Impairments Caused
by Third Parties
49,604,770
5%
Ignited Terminals
30,957,154
3%
Connections Failures
23,601,590
2%
Other Causes
250,159,610
25%
1,016,314,245
100%
Total
PART II
These causes were derived from the performance KPIs data for 2012 and also from the daily reports of the SEC
distribution offices.
Study of the table shows the following:
36% of the total outage times resulted from scheduled maintenance, connection to new customers, network improvements, or repairs.
18% of the total outage times Kingdom-wise resulted from transient damages. This percentage may be as high as
50% in the Southern sector and in some counties such as Dawadmi and Taif.
19% of the total Kingdom-wide outages times resulted from cable impairments caused by third parties, connection
failures, and ignited terminals. The percentage is higher in the cities such as Riyadh, Jeddah, and Dammam.
Causes of transmission network outages varied between equipment failures, problems of protection systems, weather
conditions, damages caused by third parties, and human errors.
The plan included several administrative and technical recommendations which the Authority expects to be implemented by SEC and the National Electricity Transmission Company at two levels:
Short range, not exceeding one year.
Medium range, not exceeding three years.
53
The plan recommendations can be classified as follows:
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:
Prequalification of contractors, and continuous evaluation of their 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.
6HFRQGO\5HFRPPHQGDWLRQV5HODWHGWR0DQDJHPHQWRI6FKHGXOHG2XWDJHVDQG0RGLÀFDWLRQVWR:RUN3UDFtices
These recommendations include:
Using mobile generators to shorten the outage times.
Increasing coordination between various company departments to execute maintenance, improvements, and new
connections jobs to reduce the number of scheduled outages.
PART II
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 how to use them properly.
Fourthly: Development of Regulatory Standards and Policies for Building 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 within a framework of monitoring that was prepared to insure implementation of the recommendations
and track the level of performance KPI improvements for the electricity service provision.
'HYHORSPHQWRID6WUDWHJ\IRU6PDUW0HWHUVDQG6PDUW*ULGVLQWKH.LQJGRP
During the report year, the Authority developed a national strategy for smart meters and smart grids. Work on the plan
started by determining the challenges facing the electricity industry in the Kingdom. The work included reviewing the
available smart meters and smart grids technologies in order to evaluate their suitability for the Kingdom’s electricity
industry and consumers. The study also covered their contribution to overcoming the electricity industry’s challenges,
and determining the basic functional requirements of smart meters. The main result of the study was drawing up a
roadmap with clear milestones to implement the smart grid 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 efficiency of operation and realizing
better utilization of assets.
Reducing complaints arising out of issuing the electricity bills, issuing them in a timely manner and reducing the cost
of reading more than seven million meters monthly.
Enabling the renewable energy sources and facilitating their integration into the electricity system.
Providing additional services to consumers and increasing the efficiency and 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.
54
Undoubtedly, the smart grids will bring many benefits as shown in Figure (11), which summarizes the benefits of
installation of smart meters and smart grids for consumers, the national economy, the Authority, and operators of the
electricity system.
)LJXUH%HQHÀWVRI6PDUW*ULGWR,QWHUHVWHG3DUWLHV
The Regulator
Variety of generation
Development of smart industry
Enhancing innovation
National Economy
Development of the electricity industry
Increasing reliability of the electricity grid
Increasin
Service Providers
Enriching consumer experience
Variety of services
PART II
Reduction of operational costs
Operators of Transmission
Decrease in energy losses
and Distribution Networks
Optimum management and
control of the network
Consumers/Generation
Multiplicity of choices
Effective consumption management
The results of the study indicated that implementation of the strategy has a high economic return resulting from direct
benefits related to the transmission and distribution network operators’ initiatives. There are also indirect benefits that
result from the increased efficiency of the electricity system operation due to activation of the opportunity of load
shifting during peak times. This contributes to reducing the demand for increased generation capacities, saving fuels,
enhancing the opportunities to export electricity to outside markets, and reducing greenhouse gas emissions. Table 6
illustrates the net direct and indirect benefits that will accrue from installation of smart meters and smart grids.
7DEOH'LUHFWDQGLQGLUHFWEHQHÀWVWKDWZLOODFFUXH
from installing smart grids and smart meters
Value of Net Direct
%HQHÀWV
Value of Net Indirect
%HQHÀWV
(SR Billion)
(SR Billion)
Smart Grid
2.2
12
Smart Meters
1.6
102
Installed System
55
The strategy adopted 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 execution of the smart meters and smart grid programs, measuring the benefits 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:
Kingdom-wide complete installation of smart meters and smart grids.
PART II
7-4 Study of SEC's Financial and Accounting Performance KPIs
One of ECRA’s responsibilities is to enable the licensees to operate efficiently in order to recover their expenses and
realize reasonable returns on the capital invested in the regulated activities. To insure achievement of this charge, ECRA
relies on KPIs to monitor and evaluate the licensee’s financial and accounting performance. Chief among these KPIs
are the following:
Profitability measures.
Financial liquidity.
Operational efficiency.
Production, debt collection, and financial management efficiencies.
These KPIs are compared to the KPIs achieved by regional and international companies operating in comparable environments. The comparison affords the Authority the opportunity to propose suitable corrective measures which the
licensee is requited to implement in order to reduce his costs and improve service to the consumer without impacting
the licensee's financial position or his fair returns.
A study conducted by ECRA, a few years back, of SEC capital and operational costs which indicated that the company’s
operational costs in generation and transmission are considered within the reasonable limits of regional and international companies that operate in comparable environments, while the operational costs of the distribution network were
considered high by the same comparisons. The increase in the operational costs of distribution were attributed to the
company’s low capital investment in the distribution activity, and its dependence on dilapidated networks and assets
which are costly to operate.
56
During the year under consideration, ECRA’s follow-up efforts with SEC to implement the KPIs for the operational
costs of the company’s distribution network showed some improvements. The costs decreased from SR0.0174/kWh in
2009 to SR0.0170/kWh in 2013. This decrease in the cost of a kWh amounts to a saving in the operational costs of the
distribution network of about SR110 million annually.
7-5 Electricity Interconnection with Regional Grids:
Electricity interconnection projects between various grids aim to increase the rate of utilization, raise the degree of
security of supply in each system, reduce costs as a result of the ability to share operational reserves and production
capacities, and facilitate free trade of excess capacities between the interconnected systems.
At present, the electricity system in Saudi Arabia is interconnected with the systems of the GCC states*. Work is in
progress to interconnect the Saudi grid with that of the Arab Republic of Egypt.
7-5-1 GCC Interconnection
The GCC states established an organization called the “Gulf Cooperation Council Interconnection Authority” to build
DQGRSHUDWHWKHJULGLQWHUFRQQHFWLRQSURMHFWRIWKHPHPEHUVWDWHV$FRPPLWWHHFDOOHGWKH´$GYLVRU\5HJXODWRU\
Gulf Interconnection Committee” was also formed to monitor performance of this Authority. The committee submits
its recommendations to the GCC‘s “Electricity and Water Cooperation Committee” which is composed of the ministers of water and electricity of the member states.
The project was completed and commenced operations in 2011. All grids of the GCC states are thus interconnected.
During the report year, ECRA continued its active membership in the project’s advisory and regulatory committee.
PART II
7-5-2 Interconnection with the Arab Republic of Egypt
A few years back, the Kingdom of Saudi Arabia and the Arab Republic of Egypt commissioned a study to prepare for
interconnection of their two grids. Studies of the project feasibility and surveys of the marine zone between the two
countries were completed.
In 2013, the two countries signed the general agreement of the project at the ministerial level. The two primary electricity companies in the two countries signed the technical and commercial agreements for the project.
* The Gulf Cooperation Council (GCC) consists of the following states: Bahrain, Kuwait, Oman, Qatar, Saudi
Arabia, and the United Arab Emirates.
57
CHAPTER 8
PUBLIC RELATIONS AND INFORMATION
In 2013, the Authority carried out a number of activities to publicize and inform the public about its efforts to achieve
the objectives for which it was created. The focus of these activites was to disseminate information about the Authority's
resposiibilities 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 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 as well as between providers of these services.
The Authority’s activities 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 began preparations to carry 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
will emphasize 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 communications with the Authority in case of dispute with a service provider.
Following certain procedures that facilitate continuity of service.
PART II
The campaign will carry the slogan “working for you ……protecting your rights”. It will be launched in the first quarter
of 2014 and will be run for one month.
8-2 The Electricity Industry Statistical Yearbook
During the report year, the Authority published the fifth edition of the Electricity Industry Statistical Yearbook.
This edition includes the most important data and statistics that reflect the various aspects of the electricity and water
desalination industry in 2013 and 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.
8-3 Advertising in the Blue Pages Directory of the Riyadh Chamber of Commerce and Industry
In an attempt to reach investors, the Authority in 2013 placed two advertisements in the Blue Pages Directory of the
Riyadh Chamber of Commerce and Industry aimed at giving information about the Authority, and the available investment opportunities in the energy sector in the Kingdom.
The Blue Pages Directory of the Riyadh Chamber of Commerce and Industry is the largest commercial/industrial directory and only one of its type in the Kingdom. It is considered an important reference for data and information regarding
the Saudi market. Paper and electronic copies (CDs) of the directory are distributed to government agencies, private
businesses, and public institutions. It is also distributed to foreign embassies and to people attending activities and exhibition in which the chamber participates.
58
8-4 Participation in Exhibitions Concurrent with other Activities
In 2013, the Authority participated in three exhibitions that were held in conjunction with other activities by having
kiosks where publications are displayed and distributed, short films shown, and small mementos distributed. A staff
member is always present in the kiosk to answer visitors’ queries. The activities were:
The exhibition accompanying the ninth edition of the Saudi International Water and Electricity Forum held in Dhahran 12-18 April 2013.
Smart Grids Conference held in Jeddah 24-26 November 2013.
The Saudi Water and Energy Forum and Exhibition held in Jeddah 1-3 December 2013.
8-5 Communications with the Media
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 Director General of ECRA's Technical Affairs Department broadcast by the Saudi TV channel
Al Ekhbariya on its program “Windows” on April 2, 2013.
An interview with the Authority’s Governor broadcast by the Saudi TV channel Al Eqtisadiah on its program “A Guest
and an Issue” on April 27, 2013.
A statement by the Governor regarding growth of electricity consumption broadcast by the private TV channel Al
Arabia on May 4, 2013.
An interview with the Governor broadcast by the private TV channel Al Arabia on June 9, 2013 within the context of
a report on the GCC grid interconnection.
An interview with the Governor broadcast by the Saudi TV channel Al Ekhbariya on its program “Circles” on June
30, 2013.
An interview with the Governor in the context of the Saudi TV channel Al Eqtisadiah’s coverage of the Smart Grid
Conference activities broadcast on November 21, 2013.
PART II
59
CHAPTER 9
HUMAN RESOURCES AND FINANCIAL AFFAIRS
9-1 The Work Environment
An important issue for the Authority is to develop a suitable work environment for its personnel that facilitates performance of their jobs at the highest level of efficiency. The issue includes caring for the physical environment of the
workplace, working as a one-team approach, keeping communications channels open at all levels of the organization.
It also includes caring for the employees' 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 cases, giving them grants, and financing employees get-togethers and some social functions.
In 2013, the maximum loan limit per employee was increased to SR60,000. Since the start of the programs, 52 employees took advantage of it, receiving loans totaling SR1,414,250. The program also financed several social and recreational functions that were attended by the Authority’s employees and senior officers.
9-2 Training and Scholarships
The Authority gives special attention to the development of human resources. Each new employee participates in 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.
PART II
In 2013, fifty employees participated in various short training programs. One employee was sent abroad for a training
program of long duration.
The Authority also offered many of its employees 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. Twelve
employees joined the program in 2013. Thus the total number of participants in the program reached 34.
60
+XPDQ5HVRXUFHV'HYHORSPHQW3URMHFW
At the end of 2012, the Authority commissioned a consulting office to prepare a study of human resources development.
The scope of the work included the following:
Reviewing the organization chart of the Authority, and proposing appropriate modifications.
Reviewing the functions of each department, its responsibilities, its organization chart, its classification, and determining its manpower needs.
Reviewing the job positions structure of each department, its classification, its job descriptions, and proposing needed
modifications or improvements.
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, as well as reviewing the promotions
procedures currently in use, their conditions, and their forms.
Reviewing the incentives and allowances, and proposing appropriate changes.
Developing human resources manuals.
The study was expected to be completed at the end of 2013. However, due to the Authority’s need for a comprehensive
review of the study’s draft reports, work on the study was extended for additional three months. It is now expected that
the work will be completed by the end of the first quarter of 2014.
PART II
3URMHFWIRU0HDVXUHPHQWRIWKH$XWKRULW\·V$GPLQLVWUDWLYH3HUIRUPDQFH
In 2011, a forum was held at the Public Administration Institute on measuring performance of government agencies.
The participants reviewed several local and international experiences. One of the recommendations was that government agencies adopt, in coordination with the Center for Measurement of Government Agencies’ Performance of the
Institute, a comprehensive and specific methodology to measure their performance. The recommendation further proposed that the agencies develop their bylaws and codes to conform to the requirements of the performance measuring
system; link the strategic and operational levels with human resources when the measurement system is applied; and
state objectives in measurable forms.
The Authority responded positively to this recommendation. In 2012 it formed, jointly with the Center, a work team to
implement a balanced performance measuring system.
The team worked diligently to complete a sizable number of the project tasks. These tasks included training a number
of ECRA staff at the Public Administration Institute on the project requirements, conducting interviews with members
of the Authority’s senior officers, organizing four workshops on performance measuring for the authority’s officials,
developing a form for the final strategic link, and determining activities and deliverables.
The project continues, and it is expected to remain active for the next few years until all its objectives are achieved.
9-5 ECRA’s Budget
According to Article 13 of the Authority’s charter, its financial resources consist of the licensing remuneration, payments received for services rendered to service providers and others, and fines levied from violators.
The licensing remuneration is set by rules adopted by the Board of the Authority. The rules were established on the
basis of collecting sufficient funds to cover the annual financial needs of the Authority. They take into consideration
the nature of work of the licensee (cogeneration, generation of electricity, its transmission, distribution, or trading; and
water desalination, its transportation, or trading), the relative contribution of each activity to the financing of the Authority, and the size of the licensee's activity.
61
Table (8) shows comparisons of the Authority's income in 2013 with that of the previous year while Table (7) shows the
comparisons of its expenditures.
Table (7): Revenue comparison for 2013 with the previous year
(Amounts in thousands of Saudi Riyals)
Source
2013
2012
Saudi Electricity Co.
73^570*
104,520**
31^538***
National Transmission Company
PART II
Saline Water Conversion Corp.
11^784
11DŽ902
Tihamah Energy Generation Ltd. Co.
1^103
1DŽ154
Saudi Aramco
1^138
1DŽ021
Rabigh Arabian Water & Electricity Co.
1^070
1DŽ105
227
238
MARAFIQ
1^956
1DŽ963
Shuaibah Water and Electricity Co.
Shuqaiq Water and Electricity Co.
Jubail Water and Electricity Co.
2^617
1^210
3^802
2DŽ684
1DŽ256
3DŽ936
Saudi Cement Co.
Bawarij International Water Desalination Ltd. Co.
196
94
201
95
Power Energy Equipment Rentals Co.
49
19
Shuaibah Expansion Project Co.
282
285
Water and Electricity Co., Ltd.
590
590
Water and Electricity Supply Co.
Rabigh Electricity Co.
General Contracting Co. (Al-Olayyan)
853
572t
852
0
Abdul Aziz and Abdullah Kanoo Co.
105
38
81
30
Energy Alternative Solutions Co.
55
55
Rakaa Energy and Water Co., Ltd.
Twairqi Energy Co.
3
3
50
53
Nour Energy Co.
8
4
132^910
132DŽ046
Jubail Power Co.
Total
* This sum represents remuneration for licensing the company’s activities in generation and distribution only.
** This sum represents remuneration for licensing the company to undertake generation, transmission, and distribution activities.
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‡ 7KLVLVWKHÀUVW\HDURIFRPPHUFLDORSHUDWLRQVRIWKHFRPSDQ\·VSODQW
62
0
Table (8): Comparison of approved budget allocations and actual
expenditures in 2013 with the previous year
(Amounts in thousands of Saudi Riyals)
2013
Source
Approved
2012
$FWXDOO\6SHQW
Approved
$FWXDOO\6SHQW
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44DŽ060
39DŽ387
41DŽ762
37DŽ702
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3DŽ806
3DŽ755
3DŽ616
3DŽ297
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3DŽ553
3DŽ502
3DŽ032
2DŽ935
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3DŽ949
3DŽ580
3DŽ604
3DŽ187
Training and scholarships
2DŽ654
2DŽ517
3DŽ792
2DŽ240
6WXGLHVDQGFRQVXOWDWLRQV
18DŽ425
17DŽ147
16DŽ569
14DŽ287
2SHUDWLRQDOH[SHQVHV
23,351
19,458
27,226
24,086
&DSLWDOH[SHQVHV
3,615
2,775
2,720
605
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KHDGTXDUWHUVEXLOGLQJ
20,000
20DŽ000
20DŽ000
20DŽ000
$PRXQWVUHIXQGHGWR
VRPHOLFHQVHHV
9,725
9,725
9,725
9,725
133,138
121,846
132,046
118,064
7RWDO
PART II
9-6 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 65,645,987.00. In addition, there is a
special reserve for the costs of building the Authority’s permanent headquarters building in which SR60,000,000.00
was accumulated by the end of 2013.
63
CHAPTER 10
E-MANAGEMENT AND IT
10-1 E-Management
During 2013, ECRA continued development of IT applications needed by its administrative support operations such
as consumer care, financial affairs, purchasing, personnel, public relations and information, and administrative communications.
During the report year, the Authority updated all staff PCs and the operating system to Windows 8, replaced the old
programs and servers with newer versions and equipment with higher capacities. The email system was also updated,
and its capacity increased.
The internal network security was bolstered with newer equipment and software to strengthen protection and foil hacking and espionage attempts.
10-2 “Murasalat” System
For the past three years, ECRA has been using an administrative communications system, called “Murasalat”, for handling internal and external document flow. The program permits receipt of a document, processing it, transferring it to
others, and following it up electronically; providing, thus, a complete electronic environment.
During the report year, the Authority invited bids from firms specializing in this field to update the program or provide
an alternative to meet ECRA’s increasing demands and keep au courant with developments in the IT arena.
PART II
64
(OHFWURQLF&HUWLÀFDWLRQ
During the report year, the Authority worked, in collaboration with the National Digital Certification Center, on a
project to install digital certification in ECRA. The project provides the ability to encrypt ECRA’s staff email messages
sent within the Authority and outside it. The digital signature can also be used to authenticate internal documents. On
completion of the project, ECRA became an approved center of digital certification.
CHAPTER 11
OTHER ACTIVITIES
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 Infrastructure Regulation that was developed
by the center.
The glossary contains most of the technical terms dealing with operation, management, and regulation of public utilities. Workers in the field of utility regulation, and decision and policy makers in the Arab world will benefit from the
translation.
PURC is one of the oustanding research centers in the world in the field of research in public utility management and
regulation. It cooperated with regulators in several countries to translate the book into the major world languages and
publish it on the internet for use as reference by researchers, students, and workers in this field.
Translating the book into Arabic is undoubtedly an important step in tranfering knowledge to the Arabic speaker and
enhancing the use of the Arabic language and adapting it to serve as a vehicle for modern science and technology.
In 2013, ECRA continued work on this project, which is expected to be completed in 2014.
11-2 Cooperation with Regional and International Organizations
ECRA is amember of the GCC 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 membership in both
organizations.
Since 2009, the Authority has become an associate member of the Energy Regional Regulators Association (ERRA),
which includes energy regulators from Eastern Europe and Central Asia. During 2013 ECRA continued participation in
the activities of ERRA, and sent several staff members to attend its training programs and workshops to learn and see
first hand international practices in energy regulation.
The year 2013 also saw continued cooperation between the Authority and the National Association of Regulatory Utility Commissioners (NARUC) of the USA. Cooperation covered learning about US practices in licensing, monitoring
regulatory compliance, tariff structures, monitoring and evaluation of licensees' performance, consumer care, best practices and methods for long term electricity system planning, implementation of smart grids, and plans for incorporation
of renewable energy sources in the electricty network.
PART II
11-3 Cooperation with King Abdul Aziz City for Science and Technology
In order to promote cooperation in the fields of information development, studies, and research; the Authority signed a
memorandum of understanding (MoU) with King Abdul Aziz City for Science & Technology (KACST). The objective
of the MoU is to undertake studies, research, and joint projects; publish research findings and disseminate them to the
largest possible number of experts. Cooperation will concentrate on studies and field investigations related to the energy
sector, and offer consultations in the areas of codes, legislations, standards, and specifications related to the electrical
energy system.
11-4 Cooperation with King Abdullah Center for Petroleum Studies & Research
'XULQJWKH\HDURIWKHUHSRUWWKH$XWKRULW\VLJQHGDQ0R8ZLWKWKH.LQJ$EXGXOODK&HQWHUIRU3HWUROHXP6WXGLHV
Research. The MoU included collaboration of researchers from ECRA and the center to undertake research projects,
publish their findings so that the largest audience may benefit from them, and undertake scientific works and research
of global value.
The MoU also included copperation to develop the local research expertise of the staffs of both organizations, exchange
of expertise in the scientific and research fields, creating an environment conducive to facilitating development of innovation and creativity skills, exchanging information and statistical data to carry out research, and laying the foundation
for technical cooperation and consolidating the data to avoid duplication of efforts in the areas of statistcal information.
65
PART III
66
PART III
REPORT OF
THE ELECTRICITY INDUSTRY
DISPUTE RESOLUTION COMMITTEE
PART III
67
CHAPTER 1
GENERAL BACKGROUND
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 yield 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, and a financial expert. Membership in the committee is for three years, renewable.
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 year, the latest
renewal being on 3 September 2012.
1-2 Jurisdiction of the Committee
Article Thirteen of the Electricity Law specifies the charges of the committee to rule 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.
PART III
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.
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 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 Grievances. Anyone subject to a ruling by the
committee may appeal the ruling to the Court of Grievances within sixty days of the date he is notified of the ruling. If
he does not appeal within the specified period, the ruling becomes final.
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).
68
CHAPTER 2
ACTIVITIES OF THE COMMITTEE
2-1 Cases Received by the Committee:
The Committee considered the cases received during 2013 as well as cases pending from the previous year, a total of
211. It decided to follow a written memorandum form of litigation whereby each party is provided with copies of the
memoranda and documents submitted by the other party. He 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 cases considered in 2013 were as follows:
2-1-1 Cases on the Docket from Previous Years
Ninety-three cases were pending from 2012. The committee ruled on all of them except for 15 cases which were still
under consideration pending submittal of some documents and other requirements which had not been met at the end
of the year.
2-1-2 Cases Received by the Committee in 2013
In 2013 the committee received 118 cases. It issued rulings in 16 of those cases, while some of the remaining are
in advanced stages of adjudication pending issuance of rulings, and the remaining group will require some time to
complete submittal of documents and hearing arguments of litigants in order to reach rulings.
PART III
69
Table (9) shows the status of the cases considered by the committee in 2013.
Table (9): Cases on the docket of the Committee in 2013
Number of Cases
Category
Violations Related to the
Electricity Industry
Disputes Related to the
Electricity Industry
Total
Under review
In chamber
Closed
Total
3
3
2
8
91
20
92
203
94
23
94
211
2-2 Comparison with the Previous Year: Cases Received by the Committee and Cases Resolved
Table (10) shows a comparisons with the previous year of the number of cases received by the committee and the number it finalized in 2013.
PART III
Table (10): Number of cases received by the Committee and the number
ÀQDOL]HG&RPSDULVRQRIZLWKWKHSUHYLRXV\HDU
2012
2013
Number of Cases Received
76
62
Number of Cases Finalized
118
94
Cases
70
2-3 Analysis of Cases by Type of Complaint
An analysis of the cases received by the committee in 2012 and 2013, reveals that most cases involve requests that can
be classified as shown in Table (11).
7DEOH&ODVVLÀFDWLRQRIFDVHVE\W\SHRIFRPSODLQW
Type of Request
2013
2012
Total
Payment of rent for using real estate property for electrical equipment
43
57
100
Compensation for lands allocated by eminent domain action as right
of way or paths for electrical equipment
14
32
46
Relocation of a distribution line
Relocation of a transmission line
Compensation for damages resulting from electrical equipment
19
10
29
8
15
17
5
25
20
Compensation for mental anguish, and physical damages
Removal of a transformer/electricity box
Compensation for failure to connect electricity service
Compensation for disconnection of electrical services and the
damages resulting from the disconnection
Refund of amounts paid to licensee
9
5
14
5
5
10
4
6
10
5
4
9
3
6
9
Making the consumer pay for consumption costs
7DNLQJDOLFHQVHHRIÀFLDOWRWDVNIRUIDLOXUHWRIROORZDSSURYHGSURFHGXUHV
5
3
8
4
2
6
&RPSHQVDWLRQIRUÀQDQFLDOORVVHVGXHWRÀUHLQDQHOHFWULFLW\PHWHUWUDQVIRUPHU
Compensation for injuries resulting from the electric current
Removal of an electrical room
,PSRVLQJDÀQHRQWKHOLFHQVHHIRUFRPPLWWLQJDYLRODWLRQ
Compensation for drop in real estate property value due to presence of
electrical equipment on the premises
3
3
6
2
3
5
2
4
3
0
5
4
3
1
4
Relocation of a substation
Relocation of a buried cable
Enforcement of an eminent domain action
Service connection
2
2
4
1
3
4
0
4
4
3
0
3
Rescind surcharges on the electricity bill
3
0
3
Relieve from payment of penalty for meter tampering
Granting an additional meter
Vacating an executive order
Relieve from payment for consumption of past periods
2
1
3
1
2
3
0
3
3
2
0
2
Paying the licensee for supply of electrical equipment
1
1
2
Recalculation of the amount of electricity bills
1
1
2
Imposing a penalty on a licensee for tardiness in implementing an
Authority decision
0
2
2
1
0
1
1
0
1
Objection to enforcement of the obligation to provide a site to
house electrical equipment
0
1
1
Expropriation of the remainder of a property that was subject to an eminent
domain action because the remainder became useless
0
1
1
Relieve from paying a penalty for cutting a cable
Voiding a license to build a power station
PART III
71
PART IV
72
PART IV
THE ELECTRICITY AND WATER
DESALINATION INDUSTRY IN 2013
PART IV
73
CHAPTER 1
THE ELECTRICITY INDUSTRY
The Saudi electricity system is the largest in the Arab world, where peak load in 2013 reached 53,864 MW. The following is a brief description of this system.
1-1 Generation
Generation capacity by the licensed entities in the Kingdom in 2013 reached 69,761 MW*. Of this total capacity, SEC
owned 74%, SWCC 7%, and ownership of the remainder was distributed among several licensees as shown in Table
(12).
Table (12): Capacities of generation units of licensed entities
No. of plants
Producing Entity
PART IV
(MW)
Saudi Electricity Co. (SEC)
46
51,525
Saline Water Conversion Corporation (SWCC)**
6
5,018
Jubail Water and Electricity Co.
1
2,875
Shuaibah Water and Electricity Co.
1
1,191
Saudi Aramco
6
1,189
Tihamah Power Generation Co.
4
1,083
(MARAFIQ)- Yanbu
1
1,589
Shuqaiq Water and Electricity Co.
1
1,020
Rabigh Electricity Co.
1
1,320
Rabigh Water and Electricity Co.
1
600
Saudi Cement Co.
2
223
Jubail Power Co.
1
250
Twairgi Power Co.
1
63
Dharma Electricity Company
1
1,756
Aman Modern Energy Co.
3
59
76
69,761***
Total
* All data appearing in this section of the report has been obtained from SEC, excepting data for generation where it
was obtained from the Authority’s licensing records.
** Cogeneration plants only.
*** This total represents the nominal capacities as per the licenses. The total of the available capacities was 58,462MW.
74
Capacity
Figure (12) shows the distribution of generation percentages between the licensed
entities.
Figure (12): Distribution of generation capacities
among producers
Jubail Water &
Electricity
4%
SWCC
7%
Other
Producers
15%
SEC
74%
Figure (13) shows distribution of generation capacities in the four SEC business
sectors*.
Figure (13): Distribution of electricity generation
capacities in the SEC business sectors
Southern
8%
Eastern
37%
Western
33%
PART IV
Central
22%
* SEC's business sectors are shown in Figure (2) page 28.
75
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 50,016 km and underground lines that have a total length of 4,302 km.
The national transmission network consists of 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 a unified national network. In the meantime construction
is underway of a national 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. It will
also allow coordination of 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 237,244 km of overhead lines
and 228,257 km of underground lines.
In 2013, SEC delivered a total of 256,688 GWh of energy, an increase of 6.8% over the previous year. The number of
customers increased over the same period by 6.1% to 7,142,816. Table (13) shows the distribution of customers classified by consumption type and quantity.
Table (13)**: Distribution of consumers Kingdom-wide based on
type of consumption and the quantities of their consumption
PART IV
Type
Number of
subscribers
Consumption
(MWh)
Residential
5DŽ685DŽ355
126DŽ112DŽ997
48.0%
Commercial
1DŽ151DŽ546
38DŽ882DŽ158
14.8%
Government
228DŽ268
32DŽ125DŽ513
12.2%
Industrial
8DŽ586
55DŽ636DŽ325
21.2%
Others
85DŽ613
9DŽ928DŽ017
3.8%
7DŽ159DŽ368
262DŽ685DŽ011
100%
Total
* NETC is an independent company, wholly owned by SEC. It was established in 2012.
** Data in this table is for SEC and MARAFIQ.
76
Percent of total
consumption
As evident from Figure (14), the residential sector consumes half of the total electricity sold, of
which 70% is attributed to air-conditioning.
Figure (14): Distribution of consumption
by class Kingdom-wide
Commercial
15%
Government
12%
Industrial
21%
Residential
48%
Others
4%
Consumption is about equal at around 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 15).
Figure (15): Distribution of consumption
among SEC business sectors
Western
31%
Central
29%
Southern
9%
Western
31%
PART IV
77
The distribution of consumption among the various categories shows a marked regional variation. Industrial consumption dominates in the
Eastern business sector where it reaches 48% of
the total consumption of the sector (Figure 16).
Figure (16): Distribution of consumption
in the Eastern business sector
Other
4%
Residential
30%
Commercial
10%
Government
8%
Industrial
48%
In the other business sectors, residential consumption is dominant. In the Central business
sector, it is 52% (Figure 17).
Figure (17): Distribution of consumption
in the Central business sector
Government
18%
Commercial
17%
PART IV
78
Residential
52%
Industrial
8%
Other
5%
In the Western business sector, residential consumption is around 60% (Figure 18).
Figure (18): Distribution of consumption in the Western business sector
Government
12%
Industrial
8%
Others
2%
Commercial
19%
Residential
59%
The residential use share reaches a maximum
in the Southern business sector where it is 65%
(Figure 19).
Figure (19): Distribution of consumption in the Southern business sector
Industrial
4%
Others
4%
Government
14%
Commercial
14%
Residential
65%
PART IV
79
The distribution of residential and commercial consumption in 2013 in the business sectors (Figure 20) reflects the
relative population densities in these 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.
Figure (20): Comparison of consumption patterns
in the SEC business sectors
Eastern
Central
Western
Southern
40
(GWh)
Amount of consumption
50
30
20
10
0
Residential
Commercial
Government Industrial
Consumption pattern
PART IV
80
others
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 (14).
Table (14): Energy production, sale, and losses
Quantity of electric energy
(GWh)
2013
2012
Energy generated at SEC plants*
198DŽ891
207DŽ131
Energy sent from SEC plants
192DŽ329
200DŽ305
Energy imported from SWCC
14DŽ597
14DŽ102
Energy imported from other producers
70DŽ520
50DŽ432
Total Energy carried by the transmission system**
277DŽ446
264DŽ853
Total Energy sold
256DŽ688
240DŽ288
Total energy loss*** in the transmission and
distribution systems
20DŽ758
24DŽ565
Percent of electricity consumed in SEC Plants
3.3%
3.3%
7.48%
9DŽ27%
Loss in the entire SEC system
PART IV
7KLVÀJXUHLQFOXGHVHQHUJ\JHQHUDWHGE\UHQWHGXQLWVSXUFKDVHGHQHUJ\
** The energy carried by the transmission system includes amounts imported from
the GCC grid interconnection system.
*** Energy loss = Energy input to the transmission system – Energy sold
81
1-4 Service Connections to Consumers
The beginning of 2013 witnessed an improvement on the service connection front. The cumulative number of requests
for service connections that the company was not able to fulfill decreased substantially compared to the previous year.
The number of requests for the year under consideration also decreased as shown in table (15).
Table (15): Comparison of SEC’s customer requests for service connections
in the past three years
Fiscal Year
PART IV
82
2013
2012
2011
Cumulative number of requests for service
connections from previous years that were pending
40DŽ770
54DŽ049
53DŽ092
Requests received by SEC during the year
149DŽ520
155DŽ589
155DŽ318
Total number of requests
190DŽ290
209DŽ638
208DŽ410
1XPEHURIUHTXHVWVIXOÀOOHGGXULQJWKH\HDU
144DŽ910
153DŽ293
136DŽ320
3HUFHQWDJHRIUHTXHVWIXOÀOOPHQW
76.2%
73DŽ1%
65.4%
Figure (21) shows changes in the number of connection requests handled by SEC in the past three years, and the numbers actually fulfilled.
Figure (21): Total number of connection requests handled by
6(&DQGWKHQXPEHUDFWXDOO\IXOÀOOHGLQWKHSDVWWKUHH\HDUV
250DŽ000
Number of Requests
Total number of connection requests
200DŽ000
150DŽ000
1XPEHURIUHTXHVWVIXOÀOOHG
100DŽ000
50DŽ000
0
2011
2012
2013
Year
The rate of fulfillment of connection requests continued to improve, increasing from 73% in 2012 to more than 76%
in 2013 (Figure 22).
PART IV
)LJXUH3HUFHQWDJHRIUHTXHVWVIXOÀOOHG
in the past three years
)XOÀOOPHQWSHUFHQWDJH
78%
76%
74%
72%
70%
68%
66%
64%
62%
60%
2011
2012
2013
<HDU
83
1-5 Growth Trends in the Past Decade
During the past decade (2004-2013) the number of consumers increased from 4,491,717 in 2004 to 7,142,816 in 2013
(Figure 23), an increase of 57.5 %.
7.5
7.0
(in millions)
Number of consumers
Figure (23): Growth of the number of consumers (2004-2013)
6.5
6.0
5.5
5.0
4.5
4.0
2004
2005
2006
2008
2007
2009
2010
2011
2012
2013
Year
Energy sales during the same period increased by 77.8% from 144,385 GWh in 2004 to 256,687 GWh in 2013 (Figure
24).
Figure (24): Growth of energy sales (2004-2013)
(in 1000 GWh)
Energy Sales
PART IV
280
260
240
220
200
180
160
140
120
2004
2005
2006
2007
2008
2009
Year
84
2010
2011
2012
2013
Peak demand increased by 93.4% from 27,847 MW in 2004 to 53,864 MW in 2013 (Figure 25).
Figure (25): Growth of peak demand (2004-2013)
50
(GW)
Peak Demand
55
45
40
35
30
25
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Year
1-6 Fuel Types Used in Energy Production
Natural gas and crude oil were used as fuels to produce some 75% of the energy in 2013 (Figure 26). The other fuels
used were diesel, and heavy fuel oil (HFO).
Figure (26): Fuel types used
in electricity production in 2013
PART IV
Heavy
Fuel Oils
10%
Diesel
15%
Natural Gas
46%
Crude Oil
29%
85
1-7 Energy Unit Cost
In 2013 SEC’s average energy unit (kWh) cost of production, transportation, and distribution was SR0.152. The costs
include operational and capital costs, fuel, purchased energy, and depreciation costs (Figure 27).
Figure (27): Distribution of average energy unit cost
Fuels
costs
15%
Capital
expenses
14%
Purchased
energy costs
17%
Depreciation
30%
Operational
Expenses
24%
1-8 Government Subsidy 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. These prices were much less than the world market prices. The difference
between the fuel prices paid by the electricity producers in the Kingdom and international prices represents part of the
government subsidy to reduce the consumer electricity bill.
To get an idea about the size of this subsidy, Table 16 shows a comparison between the fuel prices paid by the electricity producers in the Kingdom and the international fuel prices, using BTU as a standard of measurement since fuels of
different types are used in electricity production.
Table (16): Comparisons of fuel prices paid by the electricity
producers in the Kingdom with international prices
PART IV
Price
Fuel Type
(US$/million BTU)
Paid by the Kingdom’s
Electricity Producers
International
Heavy fuel oil
0.43
15.43
Gas
0.75
9.04
Diesel
0.67
21.67
Crude oil
0.73
19.26
Without this subsidy which is estimated, in 2013, to be around SR150 billion, the average energy unit cost in 2013
would have been about SR 0.80/kWh.
86
1-9 Average Energy Unit Sale Price
In spite of the tremendous amount of government subsidy for electricity production in the form of extremely 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 2013 is still below the cost of production. The average unit price collected
was SR 0.141/kWh (Figure 28).
Figure (28): Comparison of the electricity unit cost
with the unit price collected
0.85
0.80
0.75
0.70
0.65
0.60
(SR/kWh)
Price
0.55
0.50
0.45
0.40
0.35
0.30
0.25
PART IV
0.20
0.15
0.10
0.5
0.0
Collected Price
Cost using fuel prices
paid by the Kingdom's
electricity producers
Cost calculated using
international fuel prices
87
CHAPTER 2
THE ELECTRICITY TARIFF
One of the most important concerns of ECRA is that tariffs are designed so that they are cost reflective, fair and affordable to end-users, their structure is easy to implement, and 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.
Preparing a standardized financial reporting system to be utilized by all licensed service providers.
Developing a comprehensive system to collect financial and operational data from all 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.
ECRA is also keen that tariffs reflect the government concerns with regard to use of available energy sources efficiently,
and depletion of resources and protection of the environment, as well as economic factors. Thus, ECRA strives to
insure that tariffs in the Kingdom reflect those concerns 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 they
improve the efficiency of the power system.
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 owners of the
utilities. In March 22, 1960 a new electricity tariff was issued by Council of Ministers Decision (CMD) 174 which set
the prices as shown in Table (17),
7DEOH(OHFWULFLW\SULFHVLQPDMRUFLWLHVSHU&0'RI
All Consumers, Except Mosques
(in SR/kWh )
City
First 100
PART IV
kWh
More than First four hours
kWh 100
after sunset
Mosques
More than four
hours after sunset
(SR/kWh)
Jeddah
0.24
0.21
0.24
0.18
0.18
Makkah
0.30
0.25
0.30
0.17
0.15
Madinah
0.30
0.25
0.30
0.18
0.15
Khobar
0.30
0.25
0.26
0.17
0.15
Dammam
0.30
0.25
0.26
0.17
0.15
Beginning on November 18, 1963 the tariff prices were reduced and unified throughout the Kingdom by CMD 421
issued 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 their operating
costs and a reasonable margin of profit. Further reductions in Jeddah were made in 1969 by the Saudi National Electric
Power Company, the utility operator in the city, which reduced the rate from SR0.24 to SR0.20 per kWh.
* Historical information in this chapter is drawn from the book (The Evolution of Electricity during a Hundred Years: 1319-1419AH)
issued by the Deputy Ministry of Electricity, Ministry of Industry and Electricity - Riyadh.
88
On January 17, 1972 the tariff saw further reductions via CMD 1099. The prices were as shown in Table 18.
Table (18): Electricity prices in various cities as per
CMD 1099 of January 17, 1972
City
Non-industrial consumption
Industrial consumption
(SR/kWh)
(SR/kWh)
Jeddah
0.14
0.13
Makkah
0.20
0.18
Taif
0.20
0.18
Madinah
0.20
0.18
Yanbu
0.25
0.20
Dammam
0.14
0.10
The CMD included two provisions:
$EROLVKLQJWKHPHWHUUHQWDQGFKDUJLQJLQVWHDGDIL[HGPRQWKO\VHUYLFHIHHRI65IRUQRQLQGXVWULDOFRQVXPHUV
and SR 20.00 for industrial consumers.
Providing annual subsidies to the utility companies if they failed to make profits. The subsidies were designed to
guarantee the companies a profit margin of 7%.
On August 16, 1973 the government decreed reduction of the tariff by 50-60% in 16 smaller towns in the Kingdom
that fixed the rate at SR 0.18 per kWh for industrial consumption and SR 0.20 per kWh for all other consumption. The
subsidies for companies operating in these towns were set to allow for a profit margin of 10% to encourage investment
in electricity services in these regions.
On August 9, 1974 CMD 1020 set the tariff for industrial consumption at SR 0.05 per kWh, and SR 0.07 per kWh for
all other consumption. The CMD also raised the guaranteed profit margin* to 15% and provided for credit facilities and
loans through the Saudi Industrial Development Fund to electricity operating companies.
PART IV
On October 16, 1984, the Government adopted a block tariff that increased with increasing consumption. The prices
were as shown in Table (19).
Table (19) Electricity tariff adopted on November 23, 1984
Monthly Consumption
"Block" (kWh)
Non-industrial consumption
(SR/kWh)
1-1,000
0.07
1,001-2,000
0.10
> 2,000
0.15
Industrial consumption
(SR/kWh)
0.05
In the following fifteen years 1985-2000 two modifications were made to this tariff that included enlargement of the
EORFNVH[SDQVLRQRIWKHFODVVHVRIEHQHILFLDULHVDQGUHGXFWLRQRIWKHWDULIIV$IHHRI65N:KZDVDGGHGWRFRQsumption above 2000 kWh to establish a fund for electricity projects needed on an urgent or emergency basis.
2YHUWKH\HDUVWKDWWKHJRYHUQPHQWJXDUDQWHHGDFHUWDLQSURÀWPDUJLQWKLVPDUJLQYDULHGEHWZHHQDQG
89
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, which mandated total overhaul and restructuring of the
entire sector. The decision also included approval of a new tariff (Table 20) starting on April 4, 2000.
Table (20): Tariff as of April 4, 2000
Monthly Consumption
(kWh)
Residential, Commercial,
Government (SR/kWh)
1-2,000
0.05
2,001-4,000
0.10
4,001-5,000
0.13
5,001-6,000
0.18
6,001-7,000
0.23
7,001-8,000
0.28
8,001-9,000
0.32
9,001-10DŽ000
0.36
> 10DŽ000
0.38
Agricultural, Charitable
Societies (SR/kWh)
Industrial
(SR/kWh)
0.10
0.12
0.12
The tariff was later modified by CMD 170 on October 10, 2000 to the tariff shown in Table (21) which became effective October 28, 2000.
Table (21): Tariff approved by CMD 170 as of October 28, 2000
PART IV
Monthly Consumption
(kWh)
Residential, Commercial,
Government (SR/kWh)
Agricultural, Mosques,
Charitable Societies
(SR/kWh)
1-2,000
0.05
0.05
2,001-4,000
0.10
Industrial, Medical Facilities,
Private Educational
Institutions (SR/kWh)
0.10
4,001-5,000
0.12
5,001-6,000
0.12
90
6,001-7,000
0.15
7,001-8,000
0.20
8,001-9,000
0.22
9,001-10DŽ000
0.24
> 10DŽ000
0.26
0.12
This tariff remained in effect for approximately ten years.
The residential tariff and those for agricultural uses, mosques, and charitable societies remained unchanged till the
present time (Table 22).
Table (22): Residential, Agricultural, Mosques, and Charitable
Organizations Tariffs, Unchanged, as per CMD170
Residential Consumption Tariff
Agricultural, Mosques, and
Charitable Societies Tariffs
Monthly Consumption
Tariff
Monthly Consumption
Tariff
(kWh)
(SR/kWh)
(kWh)
(SR/kWh)
1-2,000
0.05
1-2,000
0.05
2,001-4,000
0.10
2,001-5,000
0.10
> 10DŽ000
0.12
4,001-5,000
0.12
5,001-6,000
6,001-7,000
0.15
7,001-8,000
0.20
8,001-9,000
0.22
9,001-10DŽ000
0.24
> 10DŽ000
0.26
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 nonresidential 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 23.
PART IV
Table (23): Commercial and Government Tariffs,
As of July 1, 2010
Commercial Consumption Tariff
Government Consumption Tariff
Monthly Consumption
Tariff
Monthly Consumption
Tariff
(kWh)
(SR/kWh)
(kWh)
(SR/kWh)
1-4,000
0.12
Any quantity
0.26
4,001-8,000
0.20
More than 8,000
0.26
91
The industrial consumption tariff became as shown in Table 24.
Table (24): Industrial Consumption Tariff
Effective as of July 1, 2010
I- Tariff for the period from October 1 to April 30
Tariff
Consumer Type
(SR/kWh)
Small (Plant with contracted load not exceeding 1,000 kVA)
0.12
Large (Plant with contracted load exceeding 1,000 kVA)
0.14
II- Time of Use Tariff
(for industrial consumers using digital meters)
Applicable from May 1 to September 30
Consumption Days
Consumption Time
Tariff
(Consumption Hours)
(SR/kWh)
00:00-08:00
0.10
08:00-12:00
0.15
12:00-17:00
0.26
17:00-24:00
0.15
00:00-09:00
0.10
09:00-24:00
0.15
Saturday - Thursday
Friday
PART IV
III- Seasonal Tariff (for industrial consumers using electromechanical meters)
Applicable from May 1 to September 30
(SR/kWh) 0.15
92
To give an idea of the progression of tariffs in the Kingdom since 1950, Figure (29) illustrates the progression of the
tariff for the first 100 kWh of residential consumption in the City of Jeddah as an example.
)LJXUH&KDQJHRIWDULIISHUN:KRIWKHÀUVWN:KRIUHVLGHQWLDO
consumption in the City of Jeddah from 1950 to the present
0.60
Tariff
(SR/kwh)
0.50
0.40
0.30
0.20
0.10
0.0
1950
1960
1970
1980
1990
2000
2010
Year
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 in the internet*.
The maximum value for the tariff in the Kingdom is less than the fixed tariff for all the countries shown in Figure (30-A)
except Uzbekistan.
Figure (30-A): Comparison of the upper limit of the tariff in the Kingdom
ZLWKWKHÀ[HGWDULIILQDQXPEHURIFRXQWULHVDURXQGWKHZRUOG
2.00
1.80
1.60
PART IV
(SR/kWh)
Tariff
1.40
1.20
Tariff ceiling in the Kingdom
1.00
0.80
0.60
0.40
0.20
Tonga
Jamaica
Denmark
Tuvalu
Germany
Philippines
Brazil
Belgium
Netherlands
Italy
Ireland
Sweden
Guyana
Portugal
Switzerland
Hungary
Chile
Spain
Sinngapore
Finland
United Kingdom
France
Mexico
Lithuania
New Zealamd
Argentina
Romania
Latvia
Colombia
Bulgaria
Norway
Moldova
Paraguay
Saudi Arabia
Uzbekistan
0.0
* Data were taken from the following site: http://en.wikipedia.org/wiki/electricity_tariff.
93
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 Table (30-B), except Surinam and Bhutan.
Figure (30-B): Comparison of the tariff range in the Kingdom with
a number of countries around the world
Min
Max
2.00
Tariff
(SR/kWh)
1.50
Kingdom's maximum tariff
1.00
Kingdom's minimum tariff
0.50
South Korea
Vanuatu
Australia
USA
Tahiti
Jordan
Hong Kong
Nepal
Cambodia
Iran
Turkey
Taiwan
Nigeria
South Africa
Pakistan
Malaysia
Russia
Serbia
India
Dubai
China
Iceland
Thailand
Saudi Arabia
Surinam
Bhutan
0.0
PART IV
As can be seen in these two figures, the comparisons include a variety of countries. Some are industrially advanced,
some are underdeveloped, and some others are developing. Included also are some oil producing and some oil importing countries.
The low level of the electricity tariffs in the Kingdom is directly attributable to the huge subsidies* granted by the government to the electricity producers through the supply of fuels at virtually trivial prices compared to the world market
price.
2-1 Residential Monthly Bill Data
Total residential consumption of electric energy in 2013 was 126,113 GWh, which represents 48% of total electric
energy consumption in the Kingdom.
* See Section “1-8 Government Subsidy to Reduce Electricity Sale Price to Consumers”, page 86.
94
Analyzing the monthly residential consumption bills issued in 2013, the following
becomes apparent (Figure 31):
60.9% of the bills were valued at SR100.00 or less each.
16.3% of the bills ranged in value between SR101.00 and SR200.00 each.
16.8% of the bills ranged in value between SR201.00 and SR500.00 each.
Only 5.9% of the bills had a value exceeding SR500.00 each.
Figure (31): Percentage distribution of monthly bill values in 2013
60.90%
60%
50%
40%
30%
16.30%
00
10
0.
-S
00
R2
or
00
le
ss
.0
0
.0
00
R3
00
10
SR
1.
1.
20
SR
SR
SR
SR
40
1.
1
01
5
SR
.0
-S
SR
00
.00
00
0
50
1
SR
0
.00
.00
.00
4.50%
3%
0
00
9.30%
-S
6%
R4
20%
10%
0%
30
Percentage
70%
Value of the monthly bill
From the preceding data it is clear that more than 94% of the monthly residential consumers bills issued in 2013 did
not exceed SR500.00 each (Figure 32).
Figure (32): Cumulative percentage distribution of monthly bill values in 2013
98.20%
100%
94%
95%
90%
86.60%
85%
80%
77.20%
75%
70%
60.90%
65%
Cumulative percentage
91%
PART IV
60%
R1
00
.00
.0
0
0
in
g
di
ng
S
SR
20
0
SR
3
g
No
ex
ot
N
te
ce
xc
ee
ed
di
n
ee
N
ot
e
xc
ce
N
ot
ex
xc
ot
e
N
00
.0
00
0.
40
SR
ed
in
di
n
ee
di
ng
ee
xc
ot
e
N
g
g
SR
SR
10
00
50
0.
0
0
.0
0
55%
Value of the monthly bill
Undoubtedly, the monthly bill value will vary greatly from one month to another according to season. The bill amount
increases significantly in the summer months and decreases in the winter months for most parts of the country.
95
CHAPTER 3
WATER DESALINATION
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 2013 was 6,166,678 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 60%. Table 25 shows the capacities of entities working in desalinated water
production and cogeneration.
7DEOH'HVDOLQDWHGZDWHUSURGXFWLRQFDSDFLWLHVRIHQWLWLHV
OLFHQVHGWRRSHUDWHLQWKHGHVDOLQDWHGZDWHUDQGFRJHQHUDWLRQÀHOGV
Desalinated Water
Number of Plants Production Capacity
Licensee
(m3/Day)
SWCC
16
3DŽ667DŽ854
Jubail Water & Electricity Co.
1
805DŽ464
Shuaibah Water & Electricity Co.
1
888DŽ000
MARAFIQ (Yanbu)
1
201DŽ360
Shuqaiq Water & Electricity Co.
1
212DŽ000
Rabigh Arabian Water & Electricity Co.
1
192DŽ000
Shuaibah Expansion Project
1
150DŽ000
Bawarij International Co.
2
50DŽ000
24
6DŽ166DŽ678
Total
PART IV
* Data in this table were taken from the Authority's licensing records.
96
Figure (33) shows percentage of desalinated
water produced by each licensee.
Figure (33): Percentage distribution of daily
production capacities among the licensees
The Other
Producers
13%
Shuaibah
Electricity & Water
14%
trici
l Elec
Jubai& Water
13%
The quantity of water produced by all licensees
in 2013 was 1,775 million cubic meters. Figure
(34) shows the percentage distribution of annual
production for the licensed entities.
SWCC
60%
ty
Figure (34): Percentage contribution
of licensees to annual production
SWCC
59%
Shuaibah Water
& Electricity
20%
Others
7%
Jubail Water
& Electricity
14%
PART IV
97
SWCC’s share of the total quantity of annual desalinated water production in 2013 (Table 26), increased by 6% from
the previous year to reach 1,055 million cubic meters, produced from its numerous plants spread along the Kingdom’s
shorelines.
Table(26): Desalinated water produced in SWCC plants
Production Quantity
(Million Cubic Meters)
Year
Plant
2013
2012
Jubail
388.0
381.0
Al-Khobar
129.7
144.5
Khafji
8.0
8.0
Jeddah
163.6
132.2
Shuaibah
176.6
170.3
Yanbu
136.1
122.8
Shuqaiq
28.5
15.1
Small Plants
24.2
23.3
1054.7
997.2
Total Production
PART IV
Figure (35) shows the percentage share of each
SWCC plant in the total corporation production.
Figure (35): Percentage distribution of annual production
among SWCC plants
Al-Khobar
12%
Jaddah
16%
Jubail
37%
Shuaibah
17%
The other plants
18%
98
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 (36) shows locations throughout the Kingdom of SWCC's water
desalination plants as well as the major water transportation pipelines.
)LJXUH'HVDOLQDWLRQSODQWVDQGPDMRUGHVDOLQDWHGZDWHU
transportation lines in the Kingdom
Khafji
Haql
Hafr Albatin
Ras Al-khair
Jubail
Duba
Alnoairya
-XEDLOPDUDÀT
am
$O]XOÀ
Buraidah
Alghat
Khobar
Da
mm
Wajh
Almajmaah
Madinah
Omloj
Shaqraa
Yanbu
Alhesi
Hafoof
Riyadh
Yanbu 3
Mastoorah
Rabigh
Makkah
Azizia
Jeddah
Taif
Shuaiba
Shuaiba 3
Al Baha
PART IV
Allaith
Ra
Sabt Alalaya Khamis Mushiyt
jal
AlQunfutha
Al
Ahad Rifaudah
ma
a
Albirk
Shuqaiq
Shuqaiq 2
Farasan
Abha
Dharan South
Jazan
Samthah
City
SWCC Plants
SWCC Pipelines
IWPP
Under Construction Plants
99
3-3 SWCC's Annual Desalinated Water Production Capacity
In 2013, SWCC’s average daily production was 2.89 million cubic meters. Figure (37) shows SWCC's production capacity of desalinated water over the past ten years.
Figure (37): SWCC production capacity of desalinated water
in the past ten years
3
2.9
2.8
2.7
2.6
2.5
2.4
2013
2012
2011
2010
2009
2008
2007
2006
2005
2.3
2004
(Million cubic meters)
Production Capacity
3.1
Year
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 decreased slightly from 81.8% in 2012 to 80.7% in 2013. The decrease is
due to entry into service of the Jeddah reverse osmosis (RO) plant and an increase in the installed capacity of the Jeddah
plants, thus increasing the installed capacity of the West coast and SWCC as a whole.
PART IV
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 2013, SWCC generated 24.8 GWh of electricity. The west coast plants contributed 9.5 GWh (38% of the total generation production) while the East Coast Plants produced 15.3 GWh (62% of the total production).
3-6 SWCC Restructuring Plan
The government adopted a policy to privatize a certain number of economic activities. This policy led to decisions by
the Council of Ministers and the Supreme Economic Council to implement privatization in the area of water desalination. In conformity with this policy and decisions SWCC had undertaken extensive efforts to restructure its activities
and modify its charter in order to foster private sector participation and investment in the construction and operation of
new desalination plants. The efforts concentrated particularly on privatization alternatives of SWCC. These efforts were
concluded in late 2008 with adoption of transforming SWCC into a holding company (Figure 38) 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.
100
Figure (38): Final structure of SWCC after implementation
of the restructuring plan
The Holding Company
Full Ownership(Public)
Research
Institute &
Desalination
Technologies
Other
Production
Plants
Partial Ownership(Subsidiaries)
Transportation
Khafji
Small
Plants
Ras
Al- Khair
Jubail
Al-Khobar
Shuqaiq
Shuaibah
Yanbu
The private sector will be allowed in the short-to-medium-term (i.e., a period not exceeding five years after establishing
the holding company) to share in its 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 which included the following:
Preparation of the holding company incorporation documents, a draft of the Royal decree, the company charter, and
the Council of Ministers decision.
Defining the requirements for transformation into a holding company.
Completing the financial requirements for transformation into a holding company.
Defining the assets, determining their valuation, and creating an assets data base.
Designing the organizational structure, creating a human resources plan, proposing a plan for manpower placement,
and determining executive authorities.
Creating a human resources strategy including 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 a road map for the actual implementation of restructuring.
Participating in drafting the desalinated water code; and in preparing tariff structures for the water production and
transportation, and tariff for the electricity production and transmission.
Developing an IT strategy.
PART IV
There are still many more tasks whose completion is linked to issuance of the decision of transformation into a holding
company.
101
CHAPTER 4
PRIVATE SECTOR PARTICIPATION IN THE ELECTRICITY AND WATER
DESALINATION INDUSTRY
4-1 The Electricity Industry
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 considers this matter to be one of its highest
priorities.
As shown in Table (12) page 74, the private sector already participates significantly in generation.
According to a study undertaken to estimate the funding needs of the electricity services for the period 2009-2020, the
funds required for electricity generation, transmission and distribution was estimated at SR526 billion distributed as
shown in Table (27).
Table (27): Estimated funding required for implementing
HOHFWULFLW\SURMHFWVWKURXJKWKH\HDU
(in billion SR)
Percentage of
total funding
required
Generation
335
63.7%
Transmission
121
23%
Distribution
70
13.3%
Activity
Required Funding
Total
526
The estimates of Table (27) 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%.
PART IV
In 2013, contracts to build a number of projects worth SR48 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 SR14.8 billion. They included:
Building a steam power generation station in Shuqaiq.
Purchasing five gas generation units for Gurayyat, Rafha, and ’Ar’ar.
Expanding the’Ar’ar plant.
In Transmission:The value of contracts for the transmission projects exceeded SR22.5
billion. The most important of these projects were:
Building an overhead line from Rabigh to Madinah.
Building three 380kV transformer stations.
In Distribution:Contracts totaling more than SR8.5 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.
Undertaking electricity distribution in specific areas.
Providing services to consumers.
102
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 many projects that require large financial investments. Studies have
shown that the 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 39). The estimates were made on the basis that by 2020
SWCC will be producing 6 million cubic meters of desalinated water daily.
)LJXUH'HVDOLQDWHGZDWHULQGXVWU\ÀQDQFLQJUHTXLUHPHQWVIRU
capital and operational expenses to the year 2020
(Amounts in SR billion)
65.4
Transportation
21.7
25.5
Water
9
Electricity
and
Water
43.7
Transportation
8.8
Electricity
7.7
Capital Expenses
PART IV
Operational Expenses
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.
(&5$ZLOOEHZRUNLQJLQFRRUGLQDWLRQZLWKWKH0LQLVWU\RI:DWHU(OHFWULFLW\0R:(6(&6:&&LQYHVWRUVIURP
the private sector, and all other interested parties to select the options most suitable and beneficial to Saudi Arabia.
103
APPENDIX
104
APPENDIX
AUTHORIZATIONS, LICENSES, AND
EXEMPTIONS FROM LICENSING
APPENDIX
105
Table (28): Permits Issued by the Authority
(by the end of 2013)
A-Electricity Generation
Licensed Entity
Production Capacity
(MW)
Location
1
Saudi Aramco- Jazan Energy Production
Jazan
2,100-2,400
2
SEC
Dhoba
550
B-Cogeneration
Licensed Entity
Location
Production Capacity
Water
Electricity
(MW)
(m3/d)
1
Itlalat Alghad Group
Rabigh
1,200
480,600
2
Mansour Almalik Holding
Jubail
2,600
300DŽ000
3
Saudi Aramco- Safaniya and
Khurais Electricity Production
SafaniyaKhurais
1,510
Steam
(Ton/h)
1,268
C-Water Desalination
Licensed Entity
APPENDIX
106
Location
Production Capacity
(m3 /d)
1
MARAFIQ
Jubail –Ras Alkhair
160DŽ000
2
Nesma International Water &
Power Technology
Jeddah
30DŽ000
Table (29): Licenses Issued by the Authority
(By the end of 2013)
A-Electricity Generation
Licensed Entity
Location
Production Capacity
(MW)
1
SEC
Kingdom-wide
68DŽ374
2
Saudi Cement Co.
Hufof/Ain Dar
223
3
Rabigh Electricity Co.
Rabigh
4
Twairgi Power Co.
Dammam
63
5
Modern Amn Power Co. Ltd
Jeddah
59
6
Dhurma Electricity Co.
Riyadh
1DŽ756
7
Hajar Electricity Co.*
Guraiyya
4DŽ098
8
General Contracting Co. (Olayyan Group)**
Several locations
360
9
Alternative Solutions Co**
Several locations
277
10
Power Equipment Rental Co.**
Several locations
334
11
Abdullah & Abdul Aziz Kanoo**
Several locations
175
12
Nour Power Co.
Several locations
52
13
Murjan Electricity Production Co.*
Rabigh
1DŽ320
2,091
APPENDIX
* Has not started production yet.
** Mobile units.
107
B-Cogeneration
Licensed Entity
Production Capacity
Water
Steam*
Electricity
Location
1
SWCC
Kingdom- wide
2
Jubail Power Co.
Jubail
(MW)
(m3/d)
5DŽ018
2,991,577
(Ton/h)
250
510
6DŽ775
3
Tihama Power Generation Co.
Jughaima, Othmaniya,
Shudqum,
Ras Tannoura
1DŽ643
4
Shuaibah Water & Electricity Co.
Shuaibh
1DŽ191
888DŽ000
5
Shuqaiq Water & Electricity Co.
Shuqaiq
1DŽ020
212DŽ000
6
Jubail Water & Electricity Co.
Jubail
2DŽ875
805DŽ464
Rabigh
600
192,000
7
Rabigh Arab Water & Electricity Co.
8
Saudi Aramco
Riyadh, Abqaiq,
Kharsaniya,
Barry, Yanbu
1,189
9
MARAFIQ
Yanbu
1DŽ589
4DŽ230
2,859
150,960
C-Water Desalination
Licensed Entity
Location
Production Capacity
1
Shuaibah Expansion Project Co.
Shuaibah
150DŽ000
2
Bawarij Desalination International, Ltd.
Shuaibah
50DŽ000
MARAFIQ
4
Fatah International Seawater Desalination Activity
5
APPENDIX
676,277
Yanbu
50DŽ400
Jubail
75DŽ000
D-Electricity Transmission and Desalinated Water Transportation
Licensed Entity
Location
Type
1
National Electricity Transmission Co.
Kingdom-wide
2
MARAFIQ
Jubail and Yanbu
Electricity
Transmission
3
SWCC
* Does not include steam produced for autogenous use.
108
Several locations
within the Kingdom
SWCC
3
(m3/d)
Kingdom-wide
Desalinated W ater
Transportation
E-Electricity Distribution and Retail
Licensed Entity
Location
1
SEC
Kingdom-wide
3
MARAFIQ
Jubail and Yanbu
F-Trading in Electricity and Water Desalination
Licensed Quantity
Licensed Entity
Electricity
(MW)
Water
3
(m /d)
1
Water & Electricity Co., Ltd.
1DŽ750
1DŽ242DŽ000
2
MARAFIQ (Tawreed )
2,744
800DŽ000
3
Rakaa Power & Water Co., Ltd
50DŽ000
G-Ownership of Electricity Transmission System
Licensed Entity
Saudi Arabian Mining Co,
Location
6\VWHP6SHFLÀFDWLRQV
Four overhead transmission lines
Ras Al-Khair 129 km long.
Maximum load 2,300 and 1,200 kVA.
Voltage: 380 kV and 230kV.
APPENDIX
109
Table (30): List of Exemptions from Licensing by the Authority
(By the end of 2013)
A-Electricity Generation
APPENDIX
110
Exempted Entity
Location
Production Capacity
1
Yanbu Cement Co.
Yanbu
100
2
Yamamah Cement Co.
Riyadh
221
3
Madinat Cement Co.
Marat Center, Riyadh
46
4
Saudi Arabian Mining Co. (MAADEN)
Hazm al- Jalameed
50
5
National Agricultural
Development Co. (NADEC)
Haradh
46
6
Tabuk Cement Co.
Dhoba
46
7
Najran Cement Co.
Najran
56
8
Middle East Chemicals Co., Ltd.
Ojaimi Industrial City, Riyadh
8
9
Al-Safwa Cement Co.
Rabigh
47
10
Hayel Cement Co.
Tarabah, Hayel Region
53
11
Jawf Cement Co.
Turaif
49
12
Northern Borders Cement Co.
A’ra’r
42
13
National Poultry Co.
Butain-Authal
(MW)
45.2
B-Cogeneration
Production Capacity
Exempted Entity
Location
Electricity
Water
Steam
(MW)
(m3/d)
(Ton/h)
1
National Shrimp Co.
Al-Leith
25
420
4.5
2
Saudi Paper Industry Co.
Second Industrial City, Dammam
15
-
25
Jeddah
82
-
245
3 Middle East Paper Industry & Production
4
Arabian Paper Industry
Second Industrial City, Dammam
50
-
250
5
Saudi Arabian Mining Co. (MAADEN)
Ras Al-Khair
160
40,000
-
C-Water Desalination
1
Exempted Entity
Location
Tabuk Cement Co.
Dhoba
Production Capacity
(m3/d)
1DŽ500
APPENDIX
111
THE BOARD
MANAGEMENT
112
THE BOARD OF DIRECTORS
EXECUTIVE MANAGEMENT
THE BOARD
MANAGEMENT
113
BOARD OF DIRECTORS
H.E. Adullah A. Al-Huseyen
0LQLVWHURI:DWHU(OHFWULFLW\
Chair of the Board
H.E. Dr. Abdullah M. Al-Shehri
Governor
(OHFWULFLW\&RJHQHUDWLRQ5HJXODWRU\
Authority Deputy Chair of the Board
Mr. Mohammed A. Baghdadi
Chair of the Board,
Saudi ABB Co.
'HSXW\0LQLVWHUIRU3ODQQLQJ'HYHORSPHQW
0LQLVWU\RI:DWHU(OHFWULFLW\
Prof. Fahad H. Dakhil
Mr. Abdul Aziz O. Al-Omair
Dr. Khalid H. Bayyari
Senior Vice-President for
Technology and Operations Group
Saudi Telecom Co.
Dr. Ibrahim S. Moataz
College of Engineering,
King Saud University
Mr. Safar M Dhofayyir
MANAGEMENT
114
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Saline Water Conversion Corporation
Mr. Abdullah I. Al-Hubayib
Executive Director,
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THE BOARD
Dr. Abdullah A. Al-Alsheikh
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Southern Province Cement Co.
Deputy Minister for Central Services
Ministry of Finance
Mr. Musaed A. Al-Homaidan
Assistant Deputy Minister for Follow-up and Information
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Mr. Khalid H. Al-Senani
Director, Gas Supplies and Pricing Department
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Mr. Saleh I Al-Rasheed
Director General,
Saudi Industrial Property Authority
(Representing the Ministry of Commerce and Industry)
MANAGEMENT OF THE AUTHORITY
GOVERNOR
H.E. Dr. Abdullah M. Al-Shehri
Tel: (011) 201-9009 Fax: (011) 201-9012 Email: [email protected]
VICE-GOVERNORS
Dr. Saleh A. Bakhrebah
Mr. Nasser H. Qahtani
Mr. Nasser A. Al-Wohaibi
Vice-Governor,
Support Services
Tel: (011) 201-9104
Fax: (011) 201-9105
Email: [email protected]
Vice-Governor,
Regulatory Affairs
Tel: (011) 201-9034
Fax: (011) 201-9035
Email: [email protected]
Vice-Governor,
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Tel: (011) 201-9172
Fax: (011) 201-9173
Email: [email protected]
ADVISORS
Dr. Mohammed A. Abul Hamayel
Mr. Khalid M. Mazied
Advisor, and Supervisor of Information Technology
Tel: (011) 201-9200
Fax: (011) 201-9203
Email: [email protected]
Asst. to Governor for Legal Affairs/ Board Secretary
Tel: (011) 201-9117
Fax: (011) 201-9296
Email: [email protected]
Mr. Ali A. Jamaan
Dr. Esam A. Ammar
Advisor, and Supervisor of Internal Auditing
Tel: (011) 201-9075
Fax: (011) 201-9076
Email: [email protected]
Advisor
Tel: (011) 201-9063
Fax: (011) 201-9062
Email: [email protected]
DEPARTMENT HEADS
Mr. Mohammad Al-Husseini
Mr. Nuais Al-Hwaidy
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Tel: (011) 201-9007
Fax: (011) 201-9012
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Director, Public Relations and Information Tel: (011) 201-9045
Fax: (011) 201-9044
Email: [email protected]
Prince Saud A. Al-Mugren
Mr. Saad H. Al-Salamah
Director,
Consumer Affairs
Tel: (011) 201-9220
Fax: (011) 201-9227
Email: [email protected]
Director,
Service Providers Affairs
Tel: (011) 201-9160
Fax: (011) 201-9162
Email: [email protected]
Mr. Abdul Rahman Al-Mohaizi
Mr. Fayez G. Al-Jabri
Mr. Mansour H. Al-Anazi
Director General,
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Tel: (011) 201-9131
Fax: (011) 201-9132
Email: [email protected]
Director General,
Technical Affairs
Tel: (01 201-9111
Fax: (011) 201-9113
Email: [email protected]
Director General,
Economics and Tariff Affairs
Tel: (011) 201-9120
Fax: (011) 201-9123
Email: [email protected]
Mr. Ibrahim A. Al-Garaawi
Mr. Fahd M. Al-Hassani
Mr. AliH. Al-Wadei
Director,
Finance
Tel: (011) 201-9280
Fax: (011) 201-9287
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Director,
Personnel
Tel: (011) 201-9263
Fax: (011) 201-9265
Email: [email protected]
Director,
Administrative Support
Tel: (011) 2019-9109
Fax: (011) 201-3211
Email: [email protected]
Mr. Hamid K. Al-Malky
Director,
Property Management
Tel: (01) 201-9020
Fax: (01) 201-9025
Email: [email protected]
THE BOARD
MANAGEMENT
115
ECRA headquarters building location map
North
King Fahad Road
Al-Takhassusi Street
To Makkah
Khurais Road
Cairo Square
Al-Khaleej Bridge
Council of
Saudi Chambers
ECRA
Headquarters Building
Intercontinental
Hotel
South
THE BOARD
MANAGEMENT
116
Ministry of the Interior
To Dammam