In this Law, the following terms and phrases shall have the meanings assigned thereto, unless the context requires otherwise:

• Ministry: Ministry of Energy.

• Minister: Minister of Energy. Authority: Water and Electricity Regulatory Authority.

• Board: Board of Directors of the Authority.

• Governor: Governor of the Authority.

• Law: Electricity Law.

• Statute: Statute of the Water and Electricity Regulatory Authority.

• Regulations: Regulations issued by the Authority to carry out its regulatory duties in accordance with this Law.

• Electricity Activity: An activity that a person carries out or intends to carry out in the field of electricity, including electricity generation and cogeneration from any source of energy; electricity transmission, distribution, trading, and retail sale; principal buyer’s business; and district cooling.

• Energy: All types of hydrocarbon and electrical energy generated from conventional, renewable, and atomic sources. Trading: The bulk purchase of electricity from a licensee for sale to another licensee or a large consumer, or the importation or exportation of electricity. Retail: Retail sale of electricity to consumers.

• District Cooling: The centralized production of thermal energy and the distribution thereof using chilled water or any other medium via insulated pipes to cool or heat the air in buildings and facilities.

• Cogeneration: The simultaneous production of electricity and desalinated water or steam, or both.

• Dominant Position: The ability to influence decision-making and fair competition.

• Principal Buyer: A person licensed to purchase energy, or any other person designated by the Authority, who undertakes the business of trading and offering energy-generation projects in accordance with the license.

• Consumer: Any person supplied with electricity for private consumption. Large Consumer: A consumer whose electricity consumption exceeds the limit the Authority sets from time to time.

• License: A document issued by the Authority for engaging in an electricity activity.

• Exemption: A document issued by the Authority for engaging in an electricity activity without a license, or for exemption from one or more license conditions.

• Licensee: A person holding a valid license or exemption. Tariff: An approved financial consideration for providing or selling an electricityrelated service or commodity.

• Price: A financial or in-kind consideration agreed upon between two or more licensees or between a licensee and a large consumer for providing or selling an electricity-related service or commodity.

• Electricity Market: A situation where the sale and purchase of electricity is subject to free market factors and where the price of electricity is governed by supply and demand.

• Transmission Substation: A station that transforms the voltage to a different voltage or to a medium voltage for transmission.

• Distribution Station: A station that transforms medium voltage to a different medium voltage.

• Distribution Substation: A station that transforms medium voltage to low voltage.

This Law aims to:

• 1. improve the electricity service provided to consumers and protect their rights, including the right to choose from among licensed competitors to ensure they receive reliable and efficient electricity service at fair, reasonable, and competitive prices;

• 2. create an environment that promotes fair competition;

• 3. ensure the electricity sector’s compliance with State policies and directives to achieve economic growth and social prosperity;

• 4. facilitate consumers' access to electricity and deliver electricity to off-grid areas;

• 5. provide safe, secure, reliable, and highly efficient electricity at the lowest cost possible;

• 6. protect licensees’ rights and interests by adopting a transparent, consistent, and non-discriminatory regulatory framework for electricity activities in the public and private sectors;

• 7. promote private sector participation in the expansion of electricity activities to enable it to achieve reasonable returns;

• 8. develop the structure of the electricity sector in the Kingdom to promote competition in electricity activities;

• 9. promote research and development, and localize technology, jobs, and services in the field; and

• 10. ensure the electricity sector complies with relevant laws and codes, as well as with approved environmental and safety standards of the electricity activity.

The Ministry shall, without prejudice to the jurisdictions of other government agencies and to achieve the objectives of this Law, undertake the following:

• 1. Prepare draft policies and strategies for the electricity sector.

• 2. Oversee relevant agencies regarding relevant policies and strategies approved in accordance with paragraph (1) of this Article.

• 3. Develop plans and programs and conduct studies necessary for the electricity sector in coordination with relevant agencies, and approve, issue, update the same, and ensure their implementation.

• 4. Develop a long-term plan for the electricity activity in coordination with the Authority, and approve such plan according to approved policies and strategies and monitor the implementation thereof. The plan shall include:

  • a) determining the type of fuel available to the electricity sector;

  • b) determining the percentages of various energy sources used in the optimum energy mix for the production of electricity;

  • c) interconnecting, reinforcing, and upgrading the electricity network in the Kingdom, and providing electricity to off-grid areas; and

  • d) maintaining an adequate reserve of power generators at generation or production stations as well as ensuring an adequate capacity at transmission and distribution networks.

• 5. Represent the Kingdom and its interests in relevant local, regional, and international organizations and bodies, in matters relating to the Ministry’s duties, including electrical interconnection and commercial exchange of electricity with other countries. The Ministry may delegate such powers or part thereof to other government agencies.

• 6. Take necessary measures in the event of an existing or imminent threat to the Kingdom's supply of fuel or electricity. In such case, it shall temporarily have exceptional powers to control electricity resources and fuel reserves of licensees, in coordination with relevant agencies.

• 7. Establish a long-term program, in coordination with relevant agencies, to support national industry in the electricity sector; localize modern technology; develop human resources; and increase local content by setting and enforcing a mechanism to localize jobs, goods, and services in the electricity sector, as well as create and develop an investment environment for the supply chains of industries related to the electricity sector, especially for small and medium enterprises.

• 8. Conduct studies and support research and development in the electricity sector.

• 9. Coordinate with relevant agencies in monitoring the implementation of approved programs for conserving electricity and raising the efficiency of its production and consumption.

• 10. Develop and document databases, statistical data, and technical information relating to the electricity sector; conduct surveys; and prepare reports thereon.

• 11. Propose amendments to this Law in coordination with the Authority.

The Authority shall, subject to policies and strategies approved under Article 3 of this Law and in addition to the duties stipulated in its Statute, undertake the following:

• 1. Issue regulations relevant to its duties, including:

  • a) the implementing regulations of this Law;

  • b) technical, operational, and procedural rules relating to the electricity activity;

  • c) performance indicators which must be achieved by the licensee;

  • d) rules governing the relationship between licensees and the relationship between licensees and consumers;

  • e) classification of types of electricity activity and updates thereto; and

  • f) rules for issuing licenses, permits, and exemptions, as well as rules for determining their fees.

• 2. Take necessary measures to secure additional resources for generating electricity if significant shortage in electricity supplies is expected, and notify the relevant agency of said measures.

• 3. Take necessary measures to manage the electricity activity in exigent circumstances in accordance with this Law and the rules and procedures set by the Authority.

• 4. Resolve complaints raised by relevant parties regarding the electricity activity.

• 5. Take measures to implement this Law and the regulations relating to its duties.

• 6. Monitor the licensee’s compliance with management, accounting, and investment regulations and rules;

• 7. Approve the documents and procedures for qualification and tendering of electricity activity projects, subject to rules and procedures set by the Authority.

• 8. Approve the execution plans prepared by the licensee in accordance with the long-term plan approved by the Ministry.

• 9. Coordinate with the Ministry to ensure the optimal use of energy resources to achieve the best return for the national economy; this shall include, but not be limited to, the following:

  • a) the licensee’s compliance with the standards issued by relevant agencies for raising the efficiency of electricity generation;

  • b) observing approved environmental protection measures and standards; and

  • c) promoting projects of highly efficient and economically viable power plants.

1. The Authority shall prepare a structural framework for the license and the issuance thereof and shall assume all relevant matters.

2. No electricity activity may be carried out without a license.

3. Notwithstanding paragraph (2) of this Article and subject to the regulations, the Authority may issue an exemption for engaging in certain electricity activities.

4. License applications shall be filed with the Authority. The license shall be issued within 30 business days from the date the application is completed and the requirements are satisfied. If the application is rejected, the decision must be reasoned. In case of rejection or failure to render a decision within 30 business days, the applicant may appeal before the Administrative Court.

5. The licensee may not, without obtaining the Authority’s written permission, assign his license or transfer ownership of licensed assets, whether through sale, pledge, or through any other means. The Authority shall set the conditions for such actions, provided they do not prejudice the electricity activity.

6. If the licensee fails to carry out the licensed activity, the Authority shall take the necessary measures to ensure the provision of the service is not interrupted, subject to the regulations.

7. If the licensee fails to provide adequate service, he shall compensate the aggrieved parties; the regulations shall specify the relevant criteria and conditions.

8. The Authority shall assume monitoring and inspection duties in accordance with Article 19(6) of this Law.

1. The licensee may not suspend the consumer’s electricity service without prior notification; service suspension must be in accordance with the rules set by the regulations.

2. The licensee shall comply with this Law, the regulations, license conditions, and decisions and instructions issued by the Authority.