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Regulation & Supervision BureauFor the Water & Electricity Sector in the Emirate of Abu Dhabi
P. O. Box 32800, Abu Dhabi, UAETel: (+971 2) 6426 777, Fax: (+971 2) 6424 217, E-mail: [email protected]
Regulation and Supervision Bureau for the Water and Electricity Sector in the Emirate of Abu Dhabi
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For the period 1 January 2000 - 31 December 2001
The Regulation and Supervision Bureau (the Bureau) was established by Law
No. 2 (1998) issued by the Government of Abu Dhabi, to regulate and supervise the
water and electricity sector in the Emirate of Abu Dhabi. Law No.2 details the
Bureau's primary and general duties,general functions,power and licensing criteria.
CHAIRMAN’S STATEMENT ...................................................................................... 5
SECTOR OVERVIEW BY THE DIRECTOR GENERAL ............................ 6
KEY SECTOR DEVELOPMENTS.................................................................. 11
PERFORMANCE AND COMPLIANCE ...................................................... 13
REGULATORY AND POLICY ISSUES ........................................................16
INTERNAL AFFAIRS........................................................................................ 18
FINANCIAL REPORT ...................................................................................... 20
LICENCE HOLDERS ........................................................................................ 26
BUREAU PUBLICATIONS.............................................................................. 27
INDEX
Regulation & Supervision BureauFor the Water & Electricity Sector in the Emirate of Abu Dhabi
IFC P1
His Highness Sheikh Khalifa Bin Zayed Al NahyanCrown Prince and Deputy Ruler of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces
His Highness Sheikh Zayed Bin Sultan Al NahyanPresident of the UAE and Ruler of Abu Dhabi
P2 P3
A N N UA LR E P O R T
chairman’sstatement
2001
5
I would like to welcome you to the 2001 annual report of the Regulation and Supervision Bureau for the
Water and Electricity Sector in the Emirate of Abu Dhabi (The Bureau).
Since the Bureau’s formation, on 1 January 1999, the water and electricity sector of Abu Dhabi has
undergone a number of major changes. This is particularly true in the generation and water production
areas with the establishment of three Independent Water and Power Producers (IWPPs).
By mid 2004, with the expected sale of Umm Al Nar station, over 70% of the Emirate of Abu Dhabi’s water
and electricity production will be in private hands.
During 2001 the Bureau has been involved in many issues and I am pleased to report we have undertaken
a wide range of regulatory and compliance tasks over the past year. Also, during the year, a new Director
General joined us and we have implemented a new internal organisational structure.
For the future, I believe that we now have a strong team in place and an excellent platform from which to
deliver to our statutory objectives.
Zaal Moh’d Zaal Al Hameeri
Chairman
June 2002
CHAIRMAN’S STATEMENT
His Highness Sheikh Diab Bin Zayed Al NahyanChairman of Abu Dhabi Water & Electricity Authority
P4
Sector Overview by the Director General
SECTOR OVERVIEW BY THE DIRECTOR GENERAL The project is commissioned on a build, own and operate basis, and the plant is expected to be in full commercial
operation by August 2004.The financing structure comprises a US$1.285 billion 20 year term loan and a US$351 million
equity bridge facility. The term loan includes a US$250 million Islamic tranche.
Bid documents were originally issued to international developers on 10 June 2000, and following evaluation of the bids,
a consortium led by International Power and CMS Energy were selected as preferred bidders in the first quarter of 2001.
Certain key project agreements such as the Power and Water Purchase Agreement (PWPA), shareholders agreement and
land lease were negotiated with Abu Dhabi Water and Electricity Authority and signed on 31 July 2001.
On 17 November 2001 the project company, Shuweihat CMS International Power Company (SCIPCo), was established
and engineering, procurement and construction (EPC) contracts were duly executed by SCIPCo and Siemens/Fisia for
the power and desalination facilities, and with Logica in respect of a settlement system facility.
The Bureau issued a desalination and generation licence to SCIPCo on 17 November 2001.
For existing power stations, owned by ADWEA, additional desalination plant was commissioned during 2001 at Al Mirfa
Power Company providing an extra 22.5 MIGD of water in the Western Region.Work is also underway to expand Umm Al
Nar desalination capacity with an additional 62.5 MIGD due for despatch from 2002.
It is expected that privatisation initiatives will continue to dominate the production end of the water and electricity
supply chain for the foreseeable future.
System Demand Up until 2004 the medium term peak demand for electricity is predicted to witness an average annual growth in excess
of 10 percent. For water the medium average growth forecast is set to be in excess of 8 percent per annum.
The total gross water produced from all desalination plants excluding the remote areas, in year 2001 was approximately
86,000 Million Imperial Gallons (MIG) of desalinated water which is predominately produced by the use of Multi-Stage
Flash (MSF) desalination technology. Other smaller desalination units in remote areas and islands, owned by RASCO
(Remote Areas Services Company), utilise different desalination processes such as Reverse Osmosis (RO) and Multi-
Effect Distillation (MED) plus water extracted from wells.The total RASCO production was approximately 12,841 MIG out
of which 9,275 MIG was from the wells.
The total units of electricity produced and despatched for 2001 was approximately 20,500 GWhs an increase of just over
seven percent on the previous year. The annual peak demand occurred in September at 3,723 MW and increased by
12.7% compared with the previous year.
A N N UA LR E P O R T
2001
76
The sector companies continue to meet rising demand for water and electricity and progress through privatisation
initiatives has been a consistent feature of the production strategy of the Abu Dhabi Water and Electricity Authority
(ADWEA).
ProductionIn the latter part of 2000 there were six desalination and generation companies in the Abu Dhabi water and electricity
sector. The latest one being a joint venture between ADWEA and Total Tracetebel, located at Taweelah.
This was the first Independent Water and Power Producer (IWPP) in the Emirate to acquire existing assets from ADWEA
at the site known as Taweelah A1. Previously these assets were managed by Bainounah Power Company. In September
2000 the Bureau granted a licence to Gulf Total Tracetebel Power Company (GTTPC) for production of 84.76 Million
Imperial Gallons per day (MIGD) of water with an installed electricity capacity of 1,431 Mega Watts (MW).
The concept of successfully transferring existing assets to a private company is an important one which has resulted in
a similar approach being applied to Umm Al Nar Power Company. A Request for Proposal (RfP) was issued by ADWEA
for the disposal and upgrading of assets and, therefore, station output in the latter part of 2001.
In November of 2001 a seventh production company between CMS and International Power was corporatised and
registered in the Emirate of Abu Dhabi. The first phase of the project involves the development, finance, construction
and operation of a 1500 MW, power generation and 100MIGD water desalination facility, and is the largest power and
water project to be undertaken in the United Arab Emirates. Power and water output from the facility will be sold to the
Abu Dhabi Water and Electricity Company (ADWEC) under a 20 year off-take agreement.
Bulk Supply Tariff (BST) The BST is published by ADWEC, following approval by the Bureau, and sets the prices at which water and electricity is
purchased from the Abu Dhabi Water and Electricity Company (ADWEC) by the distribution companies.
A N N UA LR E P O R T
2001
The average unit charge under the BST for 2001 (9.50 fils/kWh) remains roughly the same as in 2000 (9.51 fils/kWh).
However, for water the charge in 2001 (10.46 AED/TIG) is about 11 per cent higher than that in 2000 (9.43 AED/TIG).
The rise in water charges is the result of an increase in System Marginal Pricing (SMP) rates as from August 2001 due to
the anticipated commissioning of new stand alone MSF plant at Umm Al Nar. In actuality this plant was not in
production during 2001. Given the BST charge is based on a predicted or planned range of plant being available, then
any over or under recovery from the distribution companies is allocated to the BST charges in the following year.
The Bureau continues to monitor ADWEC’s compliance with its economic purchasing obligations, in relation to the
purchase of water and electricity, by ensuring the costs paid by ADWEC are aligned with the costs of the most efficient
benchmarks in Abu Dhabi and elsewhere in the world.
Desalination companies market share Generation companies market share
8 9
For both electricity and water, Emirates CMS Power Company (ECPC) and GTTPC, the two IWPPs currently in production,
increased their market share significantly, with much higher outputs than the previous year. While Bainounah Power
Company (BPC) produced some thirty percent less units of electricity and sixty percent less for water for the same
period. These results are not surprising, given ADWEC's and Transco's duty to despatch (call in to production) the most
economic desalination and generation units first.
The chart below shows no percentage increase in water production for ECPC as none was produced in 2000.
(AMPC) Al Mirfa Power Company
(ATPC) Al Taweelah Power Company
(BPC) Bainounah Power Company
(ECPC) Emirates CMS Power Company
(GTTPC) Gulf Total Tracetebel Power Company
(UANPC) Umm Al Nar Power Company
Key Sector Developments
A N N UA LR E P O R T
2001
Abu Dhabi Company for Servicing Remote Areas The above company, more commonly known as the Remote Areas Services Company (RASCO), was established to
provide water desalination, well water production, electricity generation, transmission, distribution and supply of water
and electricity to customers not directly connected to the distribution companies' networks.
These customers generally live in remote areas situated mainly in the west and south east of the Emirate.
With the expansion of the transmission system in the west, in particular a new 220kV line through to Al Silaa, ADWEA
requested that the Bureau consider the transfer of some of the RASCO activities to the distribution companies. Overall
the Bureau has supported the transfer of the distribution and supply activities from RASCO to the distribution
companies, on the basis of economies of scale savings and better services to customers. At the time of writing
discussions are continuing on the status of emergency (stand-by) generation and small stand alone generation units.
In the fullness of time the Bureau envisages the majority of activities undertaken by RASCO as being carried out by the
distribution companies or being superceded by investment in transmission and distribution networks.
Emirates National Grid During the year Electricite’ de France (EdF), acting as consultants, issued a draft interim report on proposals to connect
the four regional electricity authorities in the UAE via an electricity transmission grid. The study was commissioned by
the Water and Electricity Ministry. Transco represents ADWEA on these issues with the Bureau providing regulatory
advise on licence and economic issues.
It is anticipated that a final report will be completed during 2002. The main drivers behind this proposal are economic;
mainly through the shared use of spinning reserve, and strategic; regarding emergency transfers and more flexibility in
supplying large centres of load.
Review of Al Ain Water Network In the latter part of the year a contamination of potable water supplies to a small number of customers in the city of Al
Ain resulted in an immediate investigation by the Bureau to determine the reasons for such contamination. With the
occurrence of a similar incident a few days later (in the same area) the Bureau decided to appoint Hyder Consulting with
a brief to undertake a complete technical audit of the Al Ain water distribution system.
The results indicated a need to remove timed water supplies and move to a fully pressurised system. In tandem with this
investigation the Bureau has been working on the production of water fittings regulations which will require all customer
connections to have automatic shut off valves (for example, float control valves). Until these valves are installed it will
not be possible to remove all timed supplies.
The Bureau and AADC are working closely to ensure the Hyder recommendations are implemented without delay.
KEY SECTOR DEVELOPMENTS
2001 Water Energy Charges: System Marginal Price (SMP)
Time of Charge Charge (AED/TIG)
January All Hours 8.73
February All Hours 9.00
March All Hours 9.00
April All Hours 8.89
May All Hours 8.95
June All Hours 8.95
July All Hours 8.72
August All Hours 10.17
September All Hours 10.17
October All Hours 10.17
November All Hours 10.17
December All Hours 10.17
TIG - Thousand Imperial Gallons
10 11
The table below summarises the 2001 BST charge rates for both water and electricity.
2001 Electricity Demand Charge:
74.1 AED/kW
Applies to the average of the three peak settlement periods falling between 1200 hours and 2400 hours on Saturday to
Thursday from 1 March to 31 October.
2001 Electricity Energy Charges: System Marginal Price (SMP)
Time of Charge Charge (fils/kWh)
January Saturday to Thursday 2300 hours to 0900 hours 7.82
0900 hours to 2300 hours 7.98
Friday 2300 hours to 1800 hours 7.82
1800 hours to 2300 hours 7.98
February All Hours 7.97
March Saturday to Thursday 0000 hours to 0800 hours 7.82
0800 hours to 2400 hours 7.90
Friday 2100 hours to 0900 hours 7.82
0900 hours to 2100 hours 7.90
April All Hours 7.73
May, July and September All Hours 7.98
June All Hours 7.88
August All Hours 7.90
October All Hours 8.02
November All Hours 8.10
December All Hours 8.22
kWh - KiloWatt Hours, Note 1 kWh = 1 unit of electricity
2001 Water Demand Charges:
193.8 AED/TIG
Applies to peak settlement day between 1 April and 30 November.
Performance and Compliance Security of Electricity Supplies (Abu Dhabi City)
On 27 June 2001, the city of Abu Dhabi experienced a severe blackout. The loss of load was in the order of 1,000 MW.
The blackout started following an accidental tripping caused by contractors working at a Transco 220 kV substation
situated at Umm Al Nar Power Station. The subsequent difficulties in restoring supplies were complicated by low set
protection devices.
Following the full restoration of supplies to the transmission network, the Bureau commissioned PB Power to undertake
a full investigation of the causes of the blackout. Their results concluded that the existing transmission network is
sound, but due to a combination of unusual running arrangements and low protection settings on two circuits, the
network was unable to cope with the initial operation at the Transco substation located at Umm Al Nar. Transco have
subsequently carried out a complete review and protection settings audit of their network protection devices.
Takreer Connection Further developments in the provision of extra generation have seen an agreement between Transco and Takreer (part
of the ADNOC group) for the potential to receive or transmit power between the two companies. The connection is at
a 220kV substation at Ruwais in the Western Region and provides for the import or export of up to 300MW. There are
additional advantages for both parties in terms of system security, especially under high load and fault conditions.
The purchase of power from Takreer is provided for by a Power Purchase Agreement (PPA) between Takreer and
ADWEC, the single buyer of power and water in the Emirate.
PERFORMANCE AND COMPLIANCE
Water The quality of potable water delivered to customers is considered satisfactory with no deterioration from the previous
year. Water produced by the thermal desalination process is considered to be of high quality following mineralisation.
Water desalination has historically been the most reliable source in terms of its quality. This year has also proved that
the water quality produced by desalination process has fully complied with the Water Quality Regulation's key parameters.
The overall compliance with Water Quality Regulations regarding sampling frequencies was 75% and the compliance
with prescribed concentration, or value, was 99.3% which are similar to the previous year. There were two reported
contamination incidents; one bacterial and the other due to trace elements in well water.
The diagrams overleaf illustrate the results for 2001. For ease of reporting Transco makes two returns, based on the
distribution companies area in which their assets are located.
12 13
A N N UA LR E P O R T
2001
A N N UA LR E P O R T
2001
In 2000 the Bureau developed a range of Key Performance Indicators (KPIs) to enable company benchmarking against
a given standard. The distribution companies started reporting against this performance criteria in 2001.
During 2001 ADDC performed, in general, to the standards established whereas AADC were below the required
standards with respect to water tanker delivery, intermittent supplies and pressure requirements.
In the same period the Bureau has undertaken a range of work regarding transmission KPIs and associated standards
with a view to establishing these by 2002.
Electricity The quality of service regarding electricity distribution for 2001, compared with 2000 has shown a significant
improvement. This is particularly true in Al Ain Distribution Company, where the number of interruptions per 100
customers has shown a dramatic reduction (42%). Also, there has been a substantial reduction in customer minutes lost
for both companies. In the case of AADC this improvement has been in excess of 32%.
Health and SafetyThe Bureau recognises the importance of sound health, safety and environmental practices. During 2001 the Bureau has
undertaken a number of visits to audit licence holders premises so as to review their existing Health, Safety and
Environmental Management systems in more detail. Also plans have been produced, following these visits, in order to
improve existing controls and to reduce those levels of risk which were found to be unacceptably high.
Meetings have also taken place between the Environmental Research and Wilde-life Development Agency (ERWDA)
and the Bureau regarding water resource management in the Emirate. There were two lost time accidents, reported by
the licensed companies for 2001, which resulted in lost time work of 105 mandays.
There were no substantial environmental incidents reported during 2001. Emission control monitoring and stack
maintenance contracts have been discussed with the power generation companies and the Bureau has given further
advice and guidance to assist companies to meet the issued standards.
Overall this has been a year of improvement in HSE performance by the sector licence holders.
14 15
(BPC) Bainounah Power Company
(UANPC) Umm Al Nar Power Company
(ATPC)Al Taweelah Power Company
(AMPC)Al Mirfa Power Company
(GTTPC) Gulf Total Tracetebel Power Company
(ECPC)Emirates CMS Power Company
(TRANSCO-AA) Transmission and Despatch CompanyAl Ain region
(TRANSCO-AD)Transmission and Despatch CompanyAbu Dhabi region
(AADC)Al Ain Distribution Company
(ADDC) Abu Dhabi Distribution Company
Compliance with Water Quality Regulations Sampling Frequency
Compliance with Water Quality Regulations Prescribed Concentration or Value
For both companies, a high level of investment in high voltage networks and the adoption of improved security
standards have contributed greatly to this overall improvement.
Transco have joined an International Transmission Operations and Maintenance Study (ITOMS) which is essentially a
consortium of international transmission companies who seek to benchmark their performance against each other.The
work undertaken during 2001 enabled in depth comparisons to be undertaken by the member companies in areas
such as operational spending levels, manpower numbers and system security in terms of outages.
The results indicate a high level of service, but with high costs. This is an encouraging start for Transco and the Bureau
will take account of this information during the forthcoming price controls. The composite scatter plot combines both
line and station performance to provide a high level review of overall performance for the 23 participating companies.
Production
Transmission
Distribution
Regulatory and Policy Issues
A N N UA LR E P O R T
2001
Price Control Review Price controls are applicable to the transmission and distribution companies and to the power and water procurer only.
The initial price controls were originally set to last for three years (from 1999-2001). In early 2001, the Bureau published
a consultation paper on the review of these price controls. However, the absence at that time of reliable accounting data
for some of the companies meant that it was not possible to make significant progress on the review at that time. In
such circumstances, the licences of the price-controlled companies allow for the "roll-over" of the price controls for a
further year (or years), until such time as the licence is amended to reflect revised price controls. The detailed review of
the price controls was thus deferred until 2002, with the intention of implementing revised price controls effective for
the period 2003-2005.
Licence Issues New Licence
ED/L01/002 17 Nov. 2001 Shuweihat CMS International Power Company Water Desalination and
Electricity Generation
Revisions
ED/L01/005 (Rev.1) 27 May 2001 Transco
ED/L01/006 (Rev.1) 27 May 2001 ADWEC
ED/L01/007 (Rev.1) 27 May 2001 AADC
ED/L01/008 (Rev.1) 27 May 2001 ADDC
The price control formulae for TRANSCO, ADDC, AADC and ADWEC are specified in the licences of each respective
company. In 2001, it was necessary to amend the licence of each company to give formal effect to the price control
formula covering the period 1999 – 2001 (subsequently extended to 2002).
Modifications
ED/L02/008 22 Sept. 2001 Al Mirfa – Increase in desalination capacity of further
22.5 MIGD (Million Imperial Gallons per Day)
Consents
ED/L03/001 9 Dec. 2001 UANPC – Sale of sodium hypochlorite to Takreer.
This is an unregulated activity and allows UANPC to sell sodium hypochlorite directly to Takreer (The oil refining
company), who are situated on the same site as Umm Al Nar Power Company.The consent was issued for one year only
and is renewable upon written request from UANPC
Exemptions
ED/L04/001 17 June 2001 Abu Dhabi Oil Refining Company (Takreer) Generation Licence exemption
REGULATORY AND POLICY ISSUES
16 17
Licence Holders Fees The operating costs of the Bureau are recovered through licence fees paid by all licensed operators. The Bureau’s
general philosophy is to apportion costs (and therefore licence fees) on a fair and equitable basis.
In October 2001, the Bureau issued a Consultation Paper (reference number CR/E01/001), relating to the scale of charges
and services to licence holders.
The basic principle of charges is centered on the allocation of Bureau staff costs to specific areas of activity such as
production, transmission, distribution/supply and procurement.
There are significant changes to the new charging methodology. These relate to the market share in generation and
desalination capacities for production companies and to customer numbers for distribution companies. The previous
charges were based on the principle of forecasting units produced or carried. With the new mechanism this level of
uncertainty has now been removed.
The Bureau’s annual expenditure against projected expenditure has fallen short of expectations and resulted in a
budget surplus of AED 1,083,091 for the three year period 1999 – 2001.
The Bureau is a ‘not for profit’ organisation and therefore views any over recovery and resultant surplus of funds as
belonging to the licence holders.
The general policy on a surplus in year one is to return this to the licence holders, via a reduction of licence fees for year
three. With the introduction of a new charging mechanism, the Bureau will allocate the total 1999-2001 surplus to
licence holders to offset a proportion of charges in the year 2003. Thereafter, future surpluses or deficits will be rolled
forward to successive charging periods.
Internal Affairs
A N N UA LR E P O R T
2001
Executive The Board of Management of the Bureau changed in 2001 with the appointment of Nick Carter as Director General.
Zaal Moh’d Zaal Al Hameeri
Chairman
Nick Carter
Director General
Ibrahim Mubaydeen
Board Member
INTERNAL AFFAIRS Economic RegulationThe Economic Regulation team is responsible for all matters relating to the economic and financial performance of the
sector companies. This is exercised mainly by the implementation of price controls on the network companies and by
ensuring the economic purchase of water and electricity by ADWEC. Other responsibilities include tariffs to final
customers and the development of competition.
The Bureau plays a key role in influencing sector economics. Firstly, through an annual review of the Power and Water
Purchase Agreements (PWPAs) for ADWEA owned power/water companies. Secondly an annual review of the BST via
the Bureau’s audit and approval process and lastly by applying price control reviews to Transco, ADWEC and the two
distribution companies.
During 2001 the Bureau initiated the start of the consultation process so as to establish its second Price Control Review
(PCR2) for the period 2003 – 2005. This will seek to apply sufficient economic drivers to reduce true economic costs
particularly in the Transmission Use of System (TUoS) and Distribution Use of System (DUoS) charges levied by the
carrier companies.
The basis for the price control reviews will continue to be CPI – X*, but will be supplemented by a Performance Incentive
Scheme (PIS) for each company.This will ensure companies have an incentive to improve the quality of their services as
well as their cost efficiency. The Bureau’s primary objective in this area is to seek to encourage year-on-year reductions
by the sector companies which will have a direct saving on the total sector costs in real terms.
* CPI = Consumer Price Index; x - a figure assigned by the Bureau
Technical AffairsThis Division centres on the technical performance and compliance with technical standards of the licencees.Technical
regulation forms a major part of the Bureau's work activities and includes code reviews, the issue of regulations and
overseeing company-to-company agreements.
Codes include separate Transmission and Distribution Codes for water and electricity and the Metering and Data
Exchange Code. The Bureau's role in this area is to ensure the appropriate licence holders maintain code committees
and the codes meet the needs of the affected sector companies.
Standard connection and interface agreements are essential in determining and recording asset ownership, operational
control and maintenance responsibility. The Bureau has been instrumental in ensuring the satisfactory completion of
these agreements between licensed companies.
In 2001 a Health, Safety and Environment (HSE) Advisor joined the Division.
OperationsThe Operations Division is mainly concerned with the Bureau’s internal organisational requirements. However, licencee
compliance issues, which cross both technical and economic boundaries, have also been assigned to the Operations
Director. In addition customer queries and complaints are dealt with by this Division.
18 19
An internal organisational restructuring exercise was undertaken during the year to reflect a more sector-focused
approach.
Mark Clifton was appointed Director of Economic Regulation in November of 2001. He was previously employed as an
economic utilities consultant with NERA, and most recently as a director with Europe Economics (UK).
Chairman
Director General
Board of Management
Director of Economic RegulationMark Clifton
Director of Technical AffairsSameh Nemer
Operations DirectorVacancy
A N N UA LR E P O R T
2001
Balance Sheet
20 21
Financial ReportFINANCIAL REPORT
Statements of Funding and Expenditure andAccumulated Surplus
31 December 2001 2001 2000Note AED AED
ASSETS EMPLOYEDVEHICLES AND EQUIPMENT 3 85,152 172,057
CURRENT ASSETSPrepayments and other receivables 4 387,817 295,205Bank balances and cash 5 1,083,091 285,651
1,470,908 580,856
CURRENT LIABILITIESAccounts payable and accruals 6 1,271,747 423,110
NET CURRENT ASSETS 199,161 157,746
284,313 329,803
FUNDS EMPLOYEDAccumulated surplus 96,982 185,529
NON-CURRENT LIABILITYEmployees’ end of service benefits 7 187,331 144,274
284,313 329,803
Zaal Mohammed Zaal Al HameeriChairman
Nick CarterDirector General
Year Ended 31 December 2001 2001 2000Note AED AED
STATEMENT OF FUNDING AND EXPENDITURE
FUNDINGLicence fees 8 4,413,020 4,069,450Other income 25,372 39,394
4,438,392 4,108,844
EXPENDITURESalaries and staff related costs 3,624,043 3,558,227Depreciation 3 114,799 104,209Others 788,097 559,379
4,526,939 4,221,815
NET DEFICIT FOR THE YEAR (88,547) (112,971)
STATEMENT OF ACCUMULATED SURPLUS
Balance at 1 January 185,529 298,500Net deficit for the year (88,547) (112,971)
Balance at 31 December 96,982 185,529
A N N UA LR E P O R T
2001
2. Significant Accounting PoliciesThe financial statements have been prepared in accordance with International Accounting Standards issued by the
International Accounting Standards Board (IASB) and interpretations issued by the Standing Interpretations Committee
of the IASB.
The significant accounting policies adopted are as follows:
Accounting convention
The financial statements are prepared under the historical cost convention. The accounting policies have been
consistently applied by the Bureau and are consistent with those used in previous year.
The financial statements have been presented in UAE Dirhams (AED).
Vehicles and equipment
Vehicles and equipment are recorded at cost. The carrying amounts are reviewed at each balance sheet date to assess
whether they are recorded in excess of their recoverable amount. Where carrying values exceed their recoverable
amount assets are written down to their recoverable amount.
Depreciation
Depreciation is provided on a straight line basis on all vehicles and equipment.
The rates of depreciation are based upon the following estimated useful lives:
Motor vehicles 3 years
Software 3 years
Office equipment and furniture 5 years
Funding
Licence fees funding from the licensees in respect of the current year is accounted for in the Statement of Funding and
Expenditure based on the amount of the cash expenditure incurred during the year. Any funding received in excess of
cash expenditure is deferred and included in accounts payable and accruals.
Accounts payable and accruals
Liabilities are recognised for amounts to be paid in the future for goods or services received, whether billed by the
supplier or not.
Provisions
Provisions are recognised when the Bureau has an obligation (legal or constructive) arising from a past event, and the
cost to settle the obligation are both probable and able to be reliably measured.
Employees’ end of service benefits
The Bureau provides end of service benefits to its employees. The entitlement to these benefits is usually based upon
the employees’ length of service and completion of a minimum service period. The expected costs of these benefits are
accrued over the period of employment.
Foreign currencies
Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction. Monetary assets and
liabilities denominated in foreign currencies are retranslated at the rate of exchange ruling at the balance sheet date.
All differences are taken to the statement of funding and expenditure.
Financial instruments
Financial instruments comprise other receivables, bank balances and cash, payables and accruals. The fair values of financial
instruments are based on estimated fair values using such methods as the net present value of future cash flows.
Statement of Cash Flows
Notes to the Financial Statements
Year Ended 31 December 2001 2001 2000AED AED
OPERATING ACTIVITIES
Net deficit for the year (88,547) (112,971)Adjustments for:Provision for end of service benefit 110,541 109,921Depreciation 114,799 104,209Loss on sale of vehicles and equipment 15,051 -
Operating surplus before working capital changes 151,844 101,159(Increase) decrease in prepayments and other receivables (92,612) 66,477Increase (decrease) in accounts payable and accruals 848,637 (1,064)
Cash from operations 907,869 166,572Employee’s end of service benefit paid (67,484) (150,647)
Net cash from operating activities 840,385 15,925
INVESTING ACTIVITIES
Purchase of plant and equipment (46,745) (36,357)Proceeds from disposal of vehicle and equipment 3,800 -
Cash used in investing activities (42,945) (36,357)
INCREASE (DECREASE) IN CASH AND CASH EQUILANTS 797,440 (20,432)
Cash and cash equivalents at the beginning of the year 285,651 306,083
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR 1,083,091 285,651
31 December 2001
1. ActivitiesThe financial statements of the Regulation and Supervision Bureau ("the Bureau") for the year ended 31 December 2001
were authorised for issue by the management on 26 June 2002.
The Bureau for the Water and Electricity Sector in the Emirate of Abu Dhabi was established under Law no. (2) of 1998
to regulate the water and electricity sector in the Emirate of Abu Dhabi.
The Bureau is funded by the payment of license fees by those entities awarded licenses and is a not for profit
organisation.
The total number of employees at 31 December 2001 was 15 (2000: 13). The Bureau’s registered office is at P O Box
32800, Abu Dhabi, United Arab Emirates.
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2001
7. Employees’ End of Service BenefitsThe Bureau provides for employees’ end of service benefits in accordance with the employees contracts of employment.
The movement on the provision is as follows:
2001 2000
AED AED
Balance at 1 January 144,274 185,000
Provided during the year 110,541 109,921
Paid during the year (67,484) (150,647)
Balance at 31 December 187,331 144,274
In the opinion of the management, no material difference would have arisen had the employees’ end of service benefits
provision been calculated on an actuarial basis.
3. Vehicles and EquipmentOffice
equipmentMotor and
vehicles Software furniture TotalAED AED AED AED
Cost:At 1 January 2001 260,000 33,559 50,407 343,966Additions - 1,658 45,087 46,745Disposals - - (28,185) (28,185)
At 31 December 2001 260,000 35,217 67,309 362,526
Depreciation:At 1 January 2001 147,206 16,332 8,371 171,909Provided during the year 86,658 11,623 16,518 114,799Relating to disposals - - (9,334) (9,334)
At 31 December 2001 233,864 27,955 15,555 277,374
Net book value at 31 December 2001 26,136 7,262 51,754 85,152
Net book value at 31 December 2000 112,794 17,227 42,036 172,057
4. Prepayments and Other Receivables2001 2000AED AED
Prepaid expenses 372,940 293,011Other receivables 14,877 2,194
387,817 295,205
6. Accounts Payable and Accruals2001 2000AED AED
Accounts payable 44,774 41,084Accrued expenses 126,879 92,895Due to related parties (note 8) 17,003 -Other liabilities - 3,480Deferred funding 1,083,091 285,651
1,271,747 423,110
Accounts payable are normally settled within 30 days of the date of purchase.
5. Bank Balances and CashIncluded in bank balances and cash are bank deposits of AED 146,291 (2000 : nil) with a commercial bank in the United
Arab Emirates. These are denominated in U.A.E. Dirhams with an effective interest rate of 2%.
8. Related Party TransactionsThese represent transactions with related parties, ie. the Abu Dhabi Water and Electricity Authority (ADWEA) and senior
management of the Bureau. Pricing policies and terms of these transactions are approved by the Bureau’s management.
Transactions with related parties included in the statement of funding and expenditure are as follows:
2001 2000AED AED
Hire of motor vehicle 53,400 -Licence fees 4,413,020 4,069,450
Amount due to related party is disclosed in note 6 above. ADWEA has also provided to the Bureau, at no cost, certain
general and administrative services.
9. Fair ValuesThe fair values of the Bureau’s financial assets and liabilities are not materially different from their carrying values at the
balance sheet date.
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A N N UA LR E P O R T
2001
26 27
BureauPublications
Licence Holders
BUREAU PUBLICATIONS
Regulations Issues Earth Leakage Regulations (ED/R02/003)
Earth Leakage Regulations provide guidance for the protection against the presence of dangerous earth fault currents
by a residual current device or equally effective device where necessary. The Bureau consulted twice with all affected
parties and the Regulations came into force in July 2001.
Incident Reporting and Investigation Regulations (ED/R01/002)
In July 2001 the Bureau issued the Incident Reporting and Investigation Regulations to promote timely and accurate
reporting, and, where necessary, the investigation of major incidents arising from the activities of all licensees. The
incidents covered by these Regulations relate to the security and quality of water and electricity supply and health and
safety issues associated with the sector employees and the general public.
Relaxation from compliance with water Quality Regulations (ED/R02/001)
This relaxation gives notice to RASCO to allow it to draw water from two well fields in the Western Region, subject to a
predetermined blending ratio with desalinated water, in order to maintain the water blended parameters within the
prescribed concentration values of the Water Quality Regulations at all times.
Relaxation of Ph Values in newly installed water pipes (ED/R02/002)
Provides for ADDC, subject to certain conditions, to accept a Ph value of 9.5 instead of 9.2 as prescribed in the
Regulations relating to hydrogen ion values.This only applies in the event of commissioning newly installed pipes for a
specific time without compromising the water quality supplied to customers.
Consultation Papers Electricity Transmission Code Power Factor Amendment (CD/C01/001)
The Bureau approved two amendments regarding the power factor issue.The first amendment requires the generation
companies to supply their rated power output (MW) at any point between the limits of 0.8/0.85 power factor lagging
and 0.95 power factor leading. The second amendment requires the Distribution Companies to compensate their
demand power factor to 0.91 lagging.
The Health and Safety Performance Standards Policy (CD/R01/001)
The purpose of the proposed policy is to ensure the establishment, maintenance, review and monitoring of health and
safety performance standards, for the water and electricity sector. Also monitoring and enforcement of compliance with
such health and safety performance standards, was proposed by the Bureau.
Revision of Sampling Frequencies, Schedule II of the Water Quality Regulations (CR/R03/001)
The Bureau issued a proposed revision to the Sampling Frequencies included in Schedule II of the Water Quality
Regulations to reflect the requirements of sampling frequencies at the production, transmission and distribution levels.
The original Water Quality Regulations were issued in January 2000.
Al Mirfa Power Company (AMPC) Operates two power stations at Al Mirfa and Madinat Zayed with a total licensed capacity of 380MW. Water production is at the Al Mirfa station only, with a licensed capacity of 38.7 MIGD.
Al Taweelah Power Company (ATPC) Operates two power stations at Al Taweelah complex with a total licensed capacity of 1,220 MWand 103 MIGD for both B and B2 extension plants.
Bainounah Power Company (BPC) Operates two power stations at Mina (Abu Dhabi) and Al Ain.Total licensed capacity 1,001 MW andwater production of 16 MIGD.
Emirates CMS Power Company (ECPC)Located at the old Taweelah A2 site,with licensed water capacities of 50 MIGD and electricity of 763 MW.
Gulf Total Tracetebel Power Company (GTTPC)Licensed capacities of 84.8 MIGD of desalinated water and 1,431 MW of electricity.
Year 2001 available capacity for water was 29 MIGD and generation capacity of 255MW, for existingassets. Full production is planned to start in late 2002.
Shuweihat CMS International Power Company (SCIPCo) The company has a licence to produce 1,500 MW of electricity and 100 MIGD of desalinated water.Production is scheduled to begin in mid 2004.
Umm Al Nar Power Company (UANPC)The available desalination licence capacity is 160 MIGD of water and a licensed capacity of1,335MW. This latter figure includes 120 MW of generation at Baniyas Power Station.
Transmission and Despatch Company (TRANSCO)The company is responsible for all transmission voltages at 400, 220 and 132 kV including despatchof generation units, water storage and the bulk movement of water throughout the Emirate.
Abu Dhabi Water and Electricity Company (ADWEC)ADWEC is the single buyer of water and electricity output and capacity from producers undervarious power and water purchase agreements (PWPA) and charges the distribution companies forwater and electricity, delivered by TRANSCO under a Bulk Supply Tariff (BST).
Al Ain Distribution Company (AADC) Distributes and sells water and electricity to around 80,000 customers in the Municipality area of Al Ain.
Abu Dhabi Distribution Company (ADDC) Distributes and sells water and electricity to around 190,000 customers in the Municipality area ofAbu Dhabi
Abu Dhabi Company for Servicing Remote Areas (RASCO) Licensed to generate, desalinate, transmit, distribute and sell electricity and water in remote areas,not connected to either of the distribution companies.
(MW= Mega Watts, MIGD= Million Imperial Gallons per Day)
LICENCE HOLDERS
28
WebsiteCopies, in pdf format, of consultation documents,
regulations and licences are available on the Bureau
web site www.rsb.gov.ae.
Supply of Electricity to Takreer in Ruwais Discussion Paper (CR/L01/001)
This deals with issues relating to the supply of electricity to and from the Abu Dhabi Oil Refining Company (TAKREER)
in Ruwais from and to the Abu Dhabi electricity system.
Supply of Water to GTTPC and other Parties from the Transco System (CR/L01/003)
This consultation document sets out the Bureau's proposals on the issues raised by GTTPC regarding the supply of
water to six third-party premises from the GTTPC plant at Al Taweelah. The consultation seeks views from all interested
parties on how to address the current situation.
Licence Exemptions to ADNOC, its Affiliates and TAKREER (CR/L04/001)
Concerned with two proposed licence exemptions, firstly there was the proposed renewal of the exemption issued
under the Electricity and Water (Licence Exemption) Order No.1 of 1999 to ADNOC and its affiliates for generation and
desalination and the second proposed exemption concerned the generation of electricity at TAKREER's General Utility
Plant (GUP) in Ruwais. The Exemption (ED/L04/001) was issued in June 2001.
Scale of Charges and Services to Licence Holders (CR/E01/001)
Please refer to page 16.
2001 Price Controls Review – First Consultation Paper (CR/E02/012)
The initial price controls for ADWEC,TRANSCO, ADDC and AADC were set in 1999.This consultation paper identified and
discussed the issues associated with the replacement controls when the initial price controls expire.
IBC
