To spur conservation, power bills highlight subsidies

The regulatory agency for Abu Dhabi's water and electricity is to add another figure to customers' bills in January – the actual cost, subsidies and all.

ABU DHABI // The regulatory agency for Abu Dhabi's water and electricity will add another figure to customers' bills in January: the actual cost. The plan is part of a broader effort to reduce waste and put the nation's development on a more sustainable path, setting the course for potential rate increases.

Abu Dhabi has among the cheapest rates for electricity and water in the region due to major subsidies: the Government pays nearly 86 fils of every dirham of power consumed by Emiratis, and 50 fils for expatriates.

A tariff increase is being considered by the Abu Dhabi Executive Council, but for now the independent regulatory agency for Abu Dhabi's water and electricity hopes to tap guilt about the environment and the cost to the Government.

Next year, an Emirati family that receives a typical bill for, say, Dh559 would first see charges of Dh3,920, followed by the final amount owed, and a third item entitled the "waived cost", which in this case would be Dh3,361.

"There's a pretty stark message there: they're costing someone," said Nick Carter, the director general of the Regulation and Supervision Bureau (RSB), which was created last year to address the emirate's use of resources.

Because the tariff for water has not changed since 1995, the price of providing drinking water has long outpaced the fixed price that Abu Dhabi residents pay. The RSB deputy director general, Rashed Hamad al Rashedi, is hoping consumers will feel compassion for the Government, which has to foot most of the bill.

But despite efforts at consumer education, usage has grown in the past year. In August, electricity demand was 16 per cent higher than in August last year.

"To be honest, I'm not sure whether it will reduce consumption across all different groups," said Christian von Tschirschky, a regional utilities expert from the management consultancy AT Kearney.

From January, water units will also shift from imperial gallons to litres, a unit that the RSB hopes will be as easy to visualise as a bottle of water. An added benefit: with 4.55 litres in every gallon, the volume figures on each bill will appear to be five times higher, impressing, Mr Carter hopes, consumers with the tens of thousands of litres they consume each month.

Bills sent out at the end of January will come with an explanatory letter.

In the Abu Dhabi Distribution Company billing systems office, drafts for bills to be released after the January revision include graphs showing customers' use from one season to another. Another splits water and electricity bills into separate sheets of paper, creating room for energy-saving tips.

Dr Abdullah al Hammadi, 41, an Emirati, said he hoped fellow citizens would cut back on water and electricity once they received the new bills.

"It would be a form of respect for us as Emiratis to be careful with our usage, since our Government is carrying the brunt of the cost," Dr al Hammadi said.

* With additional reporting by Hala Khalaf