Electricity cost and the SEC & ECRA mess

SUBSCRIBERS of the Saudi Electricity Co. (SEC) may wonder why they suffer frequent power failures, particularly in the summer, while SEC’s goals are mainly the improvement of people’s living conditions and boosting the competitive status of the Kingdom’s economy in all spheres, besides providing highly reliable electrical service at reasonable price.
I am not criticizing the huge SEC empire. On the other hand, I would like to discuss what the SEC is doing to offer better services, which are not free of charge, and also how the company can contribute to increasing domestic and foreign investments, thereby bolstering the competitive status of the Kingdom’s economy internationally. However, for the past few years now we have been observing power supply problems and power failures during the summers to such an extent that one of my farmer friends in the northern part of the country told me recently that he planned to buy powerful generators, as the SEC caused great losses due to disruption in pumping water in his farms. We have never heard of the company ever paying compensation to its consumers for the losses caused by recurring supply disruptions.
The company has very high principles that govern its short-term and long-term plans in the areas of operations and capitalization. We hear about SEC’s long-term plans and we would like to see them translated to reality with total transparency and defined style so that they could be evaluated.
In the meantime the Electricity & Co-generation Regulatory Authority (ECRA) has the declared aims of guaranteeing the supply of electricity and desalinated water in sufficient quantity with high quality at reasonable prices. Its goals also include protection of the consumer interests in getting safe and quality power and water. It also aims to encourage participation of private investors in power generation and desalination. It will also protect the interests of the investors besides ensuring fair profit for the investments, although so far we have not seen any clear move to achieve such goals.
It is hardly possible to identify where the real problem lies — with the unwieldy SEC or the ECRA — which is expected to regulate the power sector and end the monopoly of the SEC to pave the way for fair competition in the sector.
It is not a fault to admit a mistake, as we are striving to repair mistakes and face the realities with transparency. About 53 percent of the country’s electricity is consumed by the residential sector, while the government sector consumes 14 percent and the industrial sector 18 percent. The commercial sector is using 11 percent of the SEC-generated power and 4 percent is shared by agriculture, private hospitals and mosque sectors, according to the latest statistical figures.
If the industrial sector accounts for only 18 percent of the SEC consumption, is it reasonable that it should shoulder the consequences of the poor performance of the ECRA. That is because when the idea of raising the power tariff is mooted all eyes are turned toward the industrial sector as though this sector should compensate for the loss of the SEC in the residential sector.
I know that the industrialists believe that they should shoulder the cost and a reasonable profit for the SEC. But to expect them to make up for any loss elsewhere is unwelcome.
It is not a secret that the rulers are sympathetic to the low-income citizens and do not like any increase in the burden on the poor. The rulers will certainly be generous if accurate and credible information is submitted to them. Then the state will bear its social responsibility toward the low-income people and even be ready to compensate for the SEC’s loss in the residential sector.
To say that the industrial sector should suffer the burden of any other sector is unjust.
All industrialists in the Kingdom should appeal to the minister of commerce and industry and take that message to the rulers, whose support and help we are accustomed to receiving.

— Courtesy of Al-Eqtisadiah newspaper