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Power to the people: Choose your own supplier
January 9, 2018 | 9:20 PM
by Syed Haitham Hasan/[email protected]
Currently, state-owned companies have a monopoly in providing power to a designated region in the Sultanate.
 
Sharelines

Muscat: Residents will soon have the power to choose their electricity provider based on the services they offer, as Oman prepares to privatise power.

Currently, state-owned companies have a monopoly in providing power to a designated region in the Sultanate.

Liberalisation of the market will open supply to private companies to compete and give residents better options.

Although power prices will be regulated by the Authority for Electricity Regulation (AER), power firms can compete based on their quality of service, thereby increasing options for consumers.



“One of the aims of AER is to privatise the distribution and supply of power. Oman has already privatised the generation of electricity, and now, this step will help increase efficiency and competition and remove the monopoly in the supply business,” said Qais Al Zakwani, executive director of AER.

Privatisation of the distribution company, the Muscat Electricity Distribution Company, was scheduled last year but owing to market conditions and low investor appetite, it was postponed.

“Companies can compete on any front. Whether it is a supplier not picking up your call or you want better service, if customers are dissatisfied with the supplier, they can shift to another,” he added.

The mode of privatisation has not been determined by the Authority yet. It is open to an IPO or a private investor taking over.

Al Zakwani also explained that government companies can be part of the distribution network but will have to compete with private suppliers in the future.

“The Authority is pleased to announce the Forward Work Program for this year which focuses on developing the electricity sector and supporting related companies in their various business aspect. It will also provide studies and strategies for the government in the economic operations of these related sectors. In addition, the Authority will be reviewing best international practices to support the introduction of Electric Vehicles (EV) and public recharge stations in the Sultanate, he said.

Al-Zakwani added, “The Authority intends to carry out a review of international best practice in relation to the regulatory framework to support the introduction of Electric Vehicles (EV) in the Sultanate of Oman.

“The review will look into potential capital costs from development of public EV recharge stations, network and connection issues, safety issues, metering costs and the required licence and Code modifications required in relation to Distribution Network Operator responsibilities.”

State-owned companies are already working on providing better solutions to customers, such as reducing outages and providing a better customer experience by launching new applications.

At a recent conference by the NAMA group, a government-owned electricity holding company, recommendations on improved customer service using a one-stop shop solution were highlighted, with an assurance of implementation to follow soon.

Privatisation can also bring international companies to the Sultanate, which can implement innovative solutions to provide consumers with better services.

The cost of distribution is also likely to drop as a result of efficiency and restructuring efforts by these private companies.

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