Fewa revises northern emirates utility tariffs

17 December 2014

Revisions will increase cost of water by 0.5 fils per gallon

The Federal Electricity & Water Authority (Fewa) has revised tariffs for electricity and water in the Northern Emirates from January 2015.

Following on from the Abu Dhabi Electricity & Water Authority’s (Adwea’s) recent announcement that it was revising tariffs, which included introducing water tariffs for Emiratis for the first time, Fewa has set out plans to revise the price of electricity and water for various groups.

For water, Fewa increased the price of water for Emiratis by 0.5 fils per gallon, an increase of 50 per cent, with Emiratis only currently paying 1 fil per gallon. This will reduce the subsidy of water from 70 per cent to 55 per cent, Fewa said in an announcement on 15 December.

The utility’s tariff revision will also involve an increase of 5 fils per kilowatt hour for electricity for government offices, expatriate residents and commercial establishments. The electricity tariff for industrial users will increase by 4 fils a kilowatt hour (f/kWh). The full details of the tariff revisions have not yet been released.

Fewa receives significant electricity imports from Abu Dhabi to meet its electricity demands, with peak imports reaching 1,551MW in 2013, significantly higher than the available installed capacity of 567MW in the Northern Emirates. Imports of electricity from Abu Dhabi have risen sharply since 2007, when the UAE cabinet approved a decision for Adwea to take over responsibility for electricity generation and supply in the Northern Emirates to prevent further electricity shortages.

In November this year, Abu Dhabi announced it was to implement revised tariffs for electricity and water from 1 January 2015, with Emiratis living in the capital required to pay for water for the first time.

In addition to the introduction of water charges, Emiratis exceeding set usage rates of electricity will face a 10 per cent rise in the cost of power. The cost of water and electricity will increase significantly for expatriates living in the capital, with the cost of water rising by at least 170 per cent.

Under the revised tariffs, Emiratis living in Abu Dhabi will be required to pay AED1.70 ($0.46) for every 1,000 litres of water used a day, for usage up to 700 litres a day in apartments and 7,000 litres in villas, rising to AED1.89 a litre for higher water usage. With local residents currently not paying for water, the reformed tariffs mark a major change in the emirate’s utilities market.

Under the new tariffs, water charges for expatriates living in Abu Dhabi have been increased by 170 per cent, with the current AED2.20 a 1,000 litres rate rising to AED5.95 for usage up to 700 litres a day in apartments and 5,000 litres a day in villas. Expatriates will face a higher tariff for exceeding this usage, but the rate has not yet been announced.

To encourage more efficient use of power, under the new tariffs, there will be no change in the price of electricity for Emiratis using up to 30 kilowatt hours (kWh) a day in apartments and 400kWh a day in villas, with the rate remaining flat at AED5 f/kWh. However, for UAE citizens exceeding this consumption, the rate will rise 10 per cent to AED5.5 f/kWh for electricity used above this amount.

For expatriates, the cost of electricity will rise by about 40 per cent, from 15 f/kWh to 21 f/kWh from 1 January for consumption up to 20kWh a day in apartments and up to 200kWh a day in villas. The tariff for usage above this rate is yet to be announced.   

The cost of water and electricity will also increase for commercial and industrial users, but prices for both will remain flat for agricultural users.

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