COST REFLECTIVE TARIFF (CRT) Rates as per (2018)

Transcription

1 COST REFLECTIVE TARIFF (CRT) Rates as per (2018)

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3 INTRODUCTION On Thursday 13 October 2016, it was announced by the AER that the Council of Ministers had approved the introduction of a new tariff for high value customers. The new tariff is designed to more accurately reflects the actual costs of providing a supply of electricity to large government, commercial and Industrial customers. This booklet describes the key features of the new tariff and is designed to help the customers to better understand the new tariff structure. CRT MEANING CRT is an acronym for Cost Reflective Tariff. It is a description of a tariff structure, that reflects all the cost of electricity generation, transmission, distribution & supply to the customer. Under this tariff the customer will be bearing all the cost of his electricity consumption without government subsidy. THE OBJECTIVE OF CRT Applying CRT has two main benefits to the country: The first one is to reduce the amount of subsidy the government pays for electricity customers, since the high value customers will be paying the total costs with no government subsidy. This will help the government to direct the savings from subsidy to other critical projects which country needs to maintain its growth. The second benefit is to reduce the investment in the network to cope up with the increasing peak load demand. Meaning that when the peak load of the customers is high, the government will have to invest in their electricity infrastructure to be able to provide electricity at the peak load, since the price of electricity at peak load is very high. Applying CRT will drive customers to reduce their peak load, in order to reduce the value of their bill. When the peak load of the network is reduced or at least sustained, the government can reduce the amount of investment in the network, and direct the savings to other critical national projects.

4 TARGETED CUSTOMERS The current approval for CRT implementation is targeting only the high value customers who consume 150 MWH and above in a year, under the Commercial, industrial and Government Categories. The tariff design The total cost of energy consumed by the customer is the summation of the following components: Total Cost= Bulk Supply Charge + Transmission Charge + Distribution System Charge + Supply Charges These different charges correspond to the different stages of electricity delivery to the customer as shown in the diagram below:

5 Bulk Supply Charge: Corresponds to the Orange Box in the diagram. It is the cost of energy supplied to the consumer which reflects the cost of bulk energy purchase from the generating companies. This value of consumption is read on hourly basis and is charged at different rates depending on the time of the day, the time of the week and the month of year. The following table shows the rate at different times; Midnight Midnight Time 1 Off-peak Times Weekday -Peak Time 2 Noon Noon Midnight Midnight Night- Peak Time 3 Time 4 Weekend Day-Peak Noon Noon Time 1 Off - Peak Time 2 Weekday Day-Peak Time 3 Night-Peak Time 4 Weekend Day-Peak January - March April May - July August - September October November - December *All prices are in Baize per Kwh and the above rates might be changed in yearly basis. The above table represents 2018 rates.

6 Transmission Charge: Corresponds to the Green Box in the diagram. This is the charge for using the transmission network depending the customer load at the time of overall transmission system peak. The load will be estimated at the beginning of the year and will be corrected at the end of the year based on the declared system peak period. Peak Load 2016 Peak Load 2017 The value of this charge is 11,500 OMR/MW connected per year for This charge will change might be changed in yearly basis. Distribution Charge: Corresponds to the Blue Box in the diagram. This is the charges for using the distribution network, that delivery the electricity from the substation to the premises of the customer. Customers who are directly connected on the transmission network will not pay Distribution Charges, who are directly do not use the distribution network. The value of this charge is 7.0 bz/kwh consumed for This rate might be changed in yearly basis. Supply Charge: Corresponds to the Yellow Box in the diagram. This is the cost of meter reading, billing, collection and other supply services. This charge is paid per meter in case the customer has more than one meters in the same premise. The value of the St is 50 Rials/ customer for 2018, This charge might change in yearly basis.

7 METER SPECIFICATION FOR CRT CUSTOMERS CRT customers will be provided with digital meters with automated meter reading facility. This type of meters is able to read the consumptions on hourly basis. Load Aggregation scenario CRT customer load must be aggregated to determine whether all the related meters should be aggregated or not. All the load of the customer in a single site to determine whether all related meters should be aggregate or not. (single mulkya and Krouki and same entity renting or owning the premises) that are commercial, industrial or government will be calculated as 1 unit. If the legal entity Customer has more than 1 rental contract for several offices in a single site, this is still considered a single customer and his load needs to be aggregated. In a commercial building if there are residential customers and commercial, the commercial customers load needs to be aggregated only as per the rules above.

8 ELIGIBILITY CUSTOMERS After identifying the potential CRT customers, the following condition should be applied to check the potential applying of the tariff. New Customer with connected load or Aggregate Loads less than 60kwh o Normal meter will be fixed and CRT tariff will not be applied from the beginning. o If this customer crosses the 150MWH on 12 months rolling His meter will be replaced and the tariff will be changed to CRT. He will be subject to CRT from the following month. New Customer with connected load or Aggregate Loads between 60kwh and 100 kwh o Will be provided with CRT meter (matching with CRT meter specification) from the beginning. o CRT tariff will not be applied from the beginning. o MEDC will monitor these customers on monthly basis. o When a customer whose load is between 60kwh and 100kwh reaches the 150MWH consumption within 12 months, the tariff will be changed to CRT with a retrospective affect from beginning of the year (January).

9 New Customers with connected loads or Aggregate Loads Above 100 kwh o Will be provided with CRT a meter (matching with CRT meter specification) o These customers will be subject to the CRT tariff from first billing. o If the customer does not reach 150MWH for 12 months customer will be removed from CRT tariff in October. o Customer will remain under monitoring if he reached 150MHW in a year (November to October) at any time he will be subject to CRT. o Adjustment will by retrospective from the beginning of the year (January). o Any prepayment (balance) will be refunded upon customer request.

10 CRT BILL LAYOUT Time Zone Consumption Calculation- Using June Tariffs Monetary value of electricity Consumption ` Transmission Charges Distribution Changes Supply Charges Bill Value

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13 Some typical Questions and answers regarding the implementation of the CRT project for the high value customers in Oman How the customer will know whether he will be charged based on CRT or not? If the customer is under commercial, industrial and government categories and his consummation reach 150Mwh in a year. The company will communicate with him regarding change the tariff. What in case the customer has more than one meters or accounts at the same premise? Consumption at all accounts at the same premises (covered by a single krookie/mulkiyah) will be aggregated to determine if the supply to the premises is eligible for the new CRT or not. In this case the supplies for non-crt eligible purposes, such as residential use will be excluded. The consumptions of all the meters in the same premises will be aggregated to determine whether the customer is eligible for CRT or not. What if the customer has a number of different premises will his meter s consumptions will be aggregated? The eligibility of the CRT depends only on the consumption aggregated at the same premises and consumption at different premises will not be aggregated. Are there plans to include residential customers in the CRT in the future? The Authority has no plans to extend the CRT to residential customers. Decisions to change the CRT applicable to residential customer tariffs can only be taken by the Council of Ministers.

14 How do I calculate what my new monthly bill will be? Customer can go to the MEDC website ( and simulate his future bills. Who will bear the cost of the CRT Meter? New customers will bear the cost of the meter, as per the normal procedure. Existing customers will get their meters replaces, upgraded or configures free of charge. Who has decided to change the tariff to CRT? The electricity tariff is governed by Law and by the decision of the Council of ministers in Oman. The council of ministers is responsible to change the electricity tariff. Is the CRT tariff the same for all customer segments (gov, Commercial and Indu)? The customer segments eligible for CRT are government, industrial and commercial. The CRT tariff is the same for customers across these categories. Will CRT customer have a different treatment for settling their bills? CRT customer are still subject to the same regulation for payment as the normal customers.

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16 CUSTOMER COMMUNICATION For more details or clarifications about the CRT tariff; Portal and mobile application will be available to the customers. So, they will be able to login to their profiles and see their consumption online. Contact Center ( ) MEDC website (