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Water and electricity cost price outstrips billing

RSB and utility distribution companies in Abu Dhabi and Al Ain to show actual and waived cost in bills

| | Dec 15, 2010 | 10:36 am
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RSB and utility distribution companies in Abu Dhabi and Al Ain to show actual and waived cost in bills

The Regulation and Supervision Bureau (RSB), the regulatory body for the water, wastewater and electricity sector of the Emirate of Abu Dhabi, on November 23, released illustrations of the “actual cost” of providing water and electricity as opposed to the much smaller amount typically shown on customers’ bills. The RSB has given the term ‘waived cost’ to describe the generous gap between the cost of providing utilities and the amount people see on their utility bills.

The announcement explained the concept with examples (shown right and below). This implies that for a UAE National, nearly 86% of the actual cost is waived, while for an expatriate nearly 50% of the actual cost is waived. The purpose of the announcement and examples, said the RSB, is to emphasise the point that Abu Dhabi utility customers receive a large proportion of their utilities for free.

While utility prices themselves have not changed, the RSB says revealing the ‘waived cost’ will prompt some users to consider changing their consumption habits with the aim of conserving these valuable resources.

Nicholas Carter, Director General of the RSB, said: “There’s a big gap between what it costs to get water and electricity to customers, and the amount they actually pay. We have released information about this generous gap, because we want to help customers better understand and visualise the real value of what they consume. Abu Dhabi’s water and electricity tariffs are the same as before, but very few customers realise they enjoy a ‘waived cost’ on utilities, which is paid by the government. This is the start of an education process that, we believe, will get people to take more care over what they consume – all to the benefit of the environment and the Emirate.”

The announcement stated that starting from January 1, 2011, ADDC and AADC bills will also switch to expressing water consumption in litres, rather than gallons. Customers will also receive a short letter explaining the terms ‘actual’ and ‘waived’ costs.

Saeed Saif Al Ameri, Chairman and Managing Director, AADC (Al Ain Distribution Company), explaining the move, said: “This is about sustainability – always critical issues in the UAE’s desert environment. We welcome the release of this information by the RSB, because it will help people appreciate the true value of water and electricity and make them more inclined to use these resources with greater care. The need to save water and electricity is hard-wired into Abu Dhabi’s long-term development plans.”

Ahmed Saeed Al Mureikhi, Chairman and Managing Director of ADDC (Abu Dhabi Distribution Company), said: “Conservation is not a new issue for the Emirate of Abu Dhabi. Plan Abu Dhabi 2030 sets a clear agenda for Abu Dhabi to become a sustainable global city. The RSB’s information will help customers better understand their consumption, and this plays a useful role in bringing the Emirate’s long-term sustainability vision to life.”

Example 1: Emirati family

Villa / 4 bedrooms

A typical bill shows water is free, and electricity is AED 559. But the actual cost of providing that water and electricity is AED 3,920. So the customer receives AED 3,361 worth of water and electricity free of charge. Nearly 86% of the actual cost of water and electricity is waived.

3,920 (actual cost) – 559 (bill amount) = 3,361 (waived cost, nearly 86% of actual cost)

Example 2: Expatriate family

Apartment / 3 bedrooms

The monthly bill for water and electricity is AED 327. But the actual cost is AED 636. So the customer is getting AED 309 worth of water and electricity for free. Nearly 50% of the actual cost of water and electricity is waived.

636 (actual cost) – 327 (bill amount) = 309 (waived cost, nearly 50% of actual cost)

All examples are for summer months

OTHER EXAMPLES: Actual cost: water and electricity provided by the Abu Dhabi Distribution Company (ADDC) and the Al Ain Distribution Company (AADC) – based on the cost of producing the utilities. Waived cost: The actual cost minus amount shown on the bill. Examples above are taken from real-life residential utility bills.

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