“The low electricity tariff will continue unchanged thanks to the state subsidy. The income from electricity generation and supply services is small compared to the generating and distribution cost,” Al-Shahri said while speaking after a function in which Riyadh Gov. Prince Sattam opened a new building for the Saudi Electric Co. on Wednesday.
It is only in the absence of subsidy that the company would consider the option of a tariff hike, Al-Shahri said.
The SEC has a SR6 billion plan to expand the power grid linking the western region with the central region. The project involves the establishment of power stations on the western coast and transmission to the central region and will be completed in 2016, a local Arabic daily reported on Thursday.
Al-Shahri added that a desalination and power generation project will be launched in Duba in the Tabuk province and it will be linked with Madinah.
“The ECRA has drawn up a plan to change the present state of SEC’s monopoly in the sector. New companies will be coming up so that there will be competition, which will, in turn, reduce costs and improve services,” he said.
The futuristic idea is that consumers will be able to buy electricity services from district offices just as telephone services are bought.
He said the first phase of the planned changes in the electricity sector was with the establishment of a national company for electricity transmission to separate power generation from transmission and distribution. The generation is to be undertaken by independent plants, he said.
A distribution company and four generating companies will be established in 2013.
Service providing companies will be started after the separation of generation and transmission is completed.
SEC will operate as a holding company in the future and all new companies will be under it.
Saudis and foreigners can invest in the companies in the electricity sector, he said.
SEC required SR40 billion annually to set up generation plants, transmission lines and supply services. The private investments will help cut government spending, he said.
He said all preparations are in place to cope with the demands of the approaching summer season when the load will rise by 5 percent to 50,000 megawatts. He said supply problems were caused by old installations in some districts where demand had grown beyond the capacity of old supply facilities.
