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Electricity Law
The draft Law as prepared by ECRA under the
lead of the Ministry
of Water and
Electricity was
submitted for
consideration by the
government and
following an
extensive review by
the Shura Council
was forwarded to the
Council of
Ministers. It was
adopted, and issued
by Royal Decree No.
M/56 on 20 Shawwal
1426 (22 Nov 2005).
The Law is central in the regulation and
development of the
electricity sector in
the Kingdom. The general
features of the Law
cover provision of
reliable services,
protecting consumer’s
rights including
reasonable prices, while
protecting the rights of
investors in the sector
to receive a fair
return. ECRA has the
responsibility of
providing a clear,
stable,
non-discriminatory
framework and creating a
suitable environment to
foster legitimate
competition in the
industry.
An immediate responsibility assigned to ECRA
in connection with the
Law was the issuance of
implementing regulations
and procedures in
conformity with its
articles. This had to be
accomplished within 180
days from the date of
publication of the Law.
The areas covered
included:
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Technical, environmental, operational and
procedural rules
-
Licensing regime
-
Licensees performance standards
-
Defining rules for interrelationships among
licensees and
licensees with
consumers
-
Rules for establishing custodianship whenever
any party violates the
Law or the authority’s
founding charter
-
Procedures for tariff development and
periodic review
-
Rules for dealing with violators of the
electricity law, the
Charter of the
Authority, or license
conditions.
-
Regulations for dispute resolutions
-
Systematic restructuring of the electricity
industry and
introduction of
competition.
-
Procedures for insuring continuity of supply
and handling emergency
situations
In keeping with the Law all electrical
activities must be
licensed through the
Authority. An important
element of the Law
relates to tariffs and
it requires the
Authority to
periodically review the
tariff structure and
submit its
recommendations to the
Council of Ministers.
An important prerequisite incorporated in the
Law is the deregulation
of the electricity
market and encouragement
of competition and the
availability of multiple
suppliers. ECRA has a
duty to enhance such a
process and protect the
sector from monopolistic
and cartel tendencies.
The Law outlines the restructuring of the
electricity industry and
mandates the need for
the industry development
plan to be reviewed and
updated to expand and
improve quality of
service. Unbundling,
development of
competition and
encouragement of private
sector investment are
critical. The Law
contains provisions to
deal with disputes and
violations in the sector
by means of a disputes
committee.
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