COST REFLECTIVE TARIFF (CRT)Rates as per (2019)

INTRODUCTION

THE OBJECTIVE OF CRTApplying CRT has two effects on the country:

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.

CRT 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 MEANINGCRT 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 the total cost of his electricity consumption without government subsidy.

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 project the country needs to maintain its growth.The second impact 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 customer 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.

The Tariff design

TARGETED CUSTOMERS

High value customers who consume 150 MWH and above in a year, under the Commercial, industrial and Government Categories are eligible to have CRT Tariff.

Total cost of energy consumed by the customer is the summation of the following factors:

Total Cost= Bulk Supply Charge + Transmission Charge + Distribution System Charge + Supply Charges

These different charges represents to the different stages of electricity delivery to the customer as shown in the diagram below:

Diagram 1.1

Corresponds to the Orange Box in the diagram 1.1. This is the cost of electricity paid to the generation companies to cover the cost of electricity generation. This charge require to have hourly consumption of the meter and different rates might be applicable for each hour 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;

Time 1Off - Peak

Time 1Weekday Day-Peak

Time 1Night-Peak

Time 1Weekend Day-Peak

January - March 12 12 12 12

April 14 14 14 14

May - July 16 67 25 36

August - September 16 26 22 20

October 14 14 14 14

November - December 12 12 12 12

Midnight

Time 1Off-peak

Times

Weekend

Day-Peak

Night-Peak

Weekday -Peak

Time 3 Time 4

Time 2

Noon

Midnight

Noon

Midnight

Noon

Midnight

Noon

*All prices are in Baize per Kwh and the above rates might be changed in yearly basis. The above table represents 2019 rates.

BULK SUPPLY CHARGE:

Corresponds to the Green Box in the diagram 1.1. This is the charge toward using the transmission network depending on 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. The below graph shows the historical system demand peak.

The transmission charge rate for 2019 is OMR 15700 per 1MW connected load at the system peak hour. This rate might be changed in yearly basis.

Corresponds to the Blue Box in the diagram 1.1. This is the charges toward using the distribution network, which is mainly represent the distribution of electricity from the primary substation to the premises of the customer.

Customers connected on the transmission network will not pay Distribution Charges, as they do not use the distribution network.

The rate of this charge for 2019 is 7.0 bz per KWh consumed. This rate might be changed in yearly basis.

Peak Load 2016

Peak Load 2017

Peak Load 2018

TRANSMISSION CHARGE:

DISTRIBUTION CHARGE:

SUPPLY CHARGE:

Corresponds to the Yellow Box in the diagram 1.1. 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 2019, This charge might change in yearly basis.

METER SPECIFICATION FORCRT CUSTOMERS

CRT customers will be provided with digital meters with automated meter reading facility. This type of meters is capable of reading the meter consumptions on hourly basis.

Load Aggregation scenario • Aggregation of consumption is used to assess customer accounts which will be

eligible for CRT Tariff. It is not aggregation of total consumption in one bill. • All the load of the customer in a single site (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, as per the rules above.

• If the customer is renting several offices in the same site and using these for different businesses, their load will not be aggregated.

• MR will be automated.

ELIGIBILITY CUSTOMERS

After identifying the CRT cus-tomers, the following condition should be applied to check the applicability of the tariff to the potential customer.

• New Customer with connected load or Aggregate Loads less than 60kwho The customer will be under the normal tariff (non CRT).o If this customer crosses the 150MWH on 12 months rolling,

•HismeterwillbereplacedtoCRTmeter. •HewillbesubjecttoCRTfromthenextmonths

• New Customer with connected load or Aggregate Loads between 60kwh and 100 kwho These customers will be provided with a CRT metero ThesecustomerswillnotbechargedwithCRTtarifffromthefirstbilling

day of their connection.

o MEDC will observe the customers consumption on monthly basis.o When a customer whose load is between 60kwh and 100kwh reaches the

150MWH consumption in the last 12 months, the following will happen;o HewillbesubjectedtoCRTtarifffromthatmonthon.o He will be re billed on CRT retrospectively (for the past 12 months)

• New Customers with connected loads or Aggregate Loads Above 100 kwho WillbegivenameterenabledwithCRTspecifications,o ThesecustomerswillbesubjecttotheCRTtarifffromfirstbilling.o If the customer does not reach 150MWH for 12 months, he will be

refunded in October for the whole period, since his connection time.o He will be removed from CRT tariff in October. o He will remain under monitoring if he reached 150MHW in a year (NovembertoOctober)atanytimehewillbesubjecttoCRT.

• Existing Customerso All points will apply to new customers for up to 100 kWh.

CRT BILL LAYOUT

`

Time Zone Consumption

Calculation- Using April Tariffs

Monetary value of electricity Consumption

Transmission Charges

Distribution Changes

Supply Charges

Bill Value

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 residentialusewillbeexcluded.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 extendthe CRT to residential customers. Decisions to change the CRT applicable to residential customer tariffs can only be taken by the Council of Ministers.

How do I calculate what my new monthly bill will be?

Customer can go to the MEDC website (www.medcoman.com) 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 normalprocedure.Existingcustomers will get their meters replaces,upgradedorconfiguresfree 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?

CRTcustomerarestillsubjecttothe same regulation for payment as the normal customers.

CUSTOMER COMMUNICATION

For more detailsorclarificationsabouttheCRTtariff;

• Portal and mobile application will be available to the customers. So, they will be able to login to their profiles and see theirconsumption online.

• Contact Center (80070008)• MEDC website (www.medcoman.com)