The Saudi Electricity Regulatory Authority has approved a new annual financial charge of 60 riyals per kilovolt-ampere (kVA) for electricity capacity that is contractually reserved but remains unused. The board of directors of the authority issued the decision to adopt this “annual financial charge for contractually reserved and unused capacity.” The decision aims to improve the efficiency of electrical energy use by penalizing wasted capacity under specific technical and contractual conditions.
Did You Know? Consumers can avoid paying this fee by choosing to reduce their reserved loads after receiving official notifications from their service provider.
Five conditions for charging unused capacity
The fee is not universal. According to the regulator, a consumer must meet five specific criteria simultaneously to be subject to the charge.
The consumer must be located in an area where a owning or supervising entity continuously handles the construction of transmission stations, having transferred ownership of equipment and medium-voltage networks to the service provider. The electrical service must have been active for at least five Gregorian years.
Technical requirements include being supplied via medium distribution voltage and having a recorded maximum load over the last three years that is less than 80% of the contracted load. Finally, the consumer must not have paid for or shared the cost of the transmission station with the service provider.
Annual fees depend on contracted and maximum loads
The annual fee is calculated by multiplying the 60 riyal rate by the difference between the consumer’s contracted load and 1.2 times the maximum load recorded over the previous three Gregorian years.
Service providers must issue the charge on a separate invoice from the standard consumption bill. This invoice is issued annually, with the following year’s bill arriving one Gregorian year after the previous one.
Providers must send three notices before charging fees
Service providers are required to send three notifications via consumption bills and text messages before charging the fee.
The first notice is sent once the conditions apply to the consumer, followed by a second notice three months later, and a final notice two months after the second. These notices must state the consumer’s maximum load for the last three years and the total amount of the annual fee due.
The final invoice is issued no sooner than one month after the final notification, providing a total window of roughly six months for the consumer to adjust their loads to avoid the payment.
Regulation takes effect one month after publication
The regulation takes effect one month after its publication in the official gazette.
Electricity Capacity Fee Questions
Who is exempt from the unused capacity fee?
Consumers who have paid for or participated in the costs of the transmission station are exempt. Those whose maximum load over the last three years is 80% or more of their contracted load also do not meet the criteria for the charge.
How long is the grace period before the first bill?
The total notification period spans five months between the first and final notice, followed by at least one additional month before the separate invoice is issued.
How is the specific amount of the fee determined?
The amount is based on the formula: 60 riyals × (Contracted Load – [1.2 × Maximum Load of the last 3 years]).
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