Determiniation1-2005.. - Authority for Electricity Regulation, Oman

3. Background - the Dispute3.1 Electricity supplied to the Customer’s premises from 22 May 1996 was suppliedvia a three-phase meter.3.2 In January 2005 the Customer added a second floor to his premises, whichnecessitated an increased electricity supply and the replacement of the threephasemeter with a CT meter. At the time of these alterations the Customer wasasked to settle all outstanding amounts related to his electricity consumptionmeted by the three-phase meter. The Customer settled his account as requested.3.3 The Customer was then informed that readings from the three-phase meter hadbeen incorrectly recorded by ONEC meter readers with the result that since 22May 1996 the Customer’s billed consumption was significantly lower than actualconsumption.3.4 The Customer was presented with a demand for 1,635.110 Rial Omani (onethousand six hundred and thirty five Rial Omani and one hundred and ten baisa),which reflected the Company’s estimate of electricity supplied to the Customer’spremises since May 1996 for which the Customer had not been charged.3.5 On 30 January 2005 the Customer wrote to His Excellency the Minister ofHousing, Electricity and Water asking that the ministry intervene to resolve thematter.3.6 On 1 February 2005, the Customer wrote to the MHEW Director Generalresponsible for the Sharqiyah region asking that the demand for payment bewithdrawn as it had accumulated due to an error on the part of the Company.3.7 On 10 September 2005, the Company informed the Customer that the calculationof the amount owed was correct and that the Customer was liable to pay theoutstanding amount in full. The Company offered a repayment plan comprising;(i)(ii)an immediate payment of 435.110 RO (four hundred and thirty five RialOmani one hundred and ten baisa); and12 monthly installments of 100 RO (one hundred Rial Omani) which wouldbe included with the Customer’s monthly electricity bill.3.8 The Customer was dissatisfied with the Company’s decision and on 20September 2005 submitted a written application to the Authority asking it todetermine the dispute.Page 2 of 6

3.9 On 12 October 2005 the Authority invited the Customer and the Company to ameeting to clarify matters relating to the dispute and to present information andpoints in support of their respective positions.4. Points put by the Customer4.1 The Customer considers the demand for payment to be unreasonable as theCompany not the Customer was responsible for ensuring meter readings wereproperly recorded.4.2 The Customer is also dissatisfied with the fact that it took the Company eightyears to detect the meter reading error, and having done so has sought to holdthe Customer fully liable for errors beyond the Customer’s control and for whichthe Company is responsible.4.3 The Customer noted that he had paid all electricity bills presented to him sinceMay 1996 promptly and in full and had not at any time been disconnected for nonpaymentof electricity bills.4.4 The Customer said that had he received correct bills for electricity consumed athis premises, he would have had the opportunity to moderate his consumption inaccordance with his household budget.5. Points put by the Company5.1 The Company holds the Customer fully liable for all electricity supplied to hispremises since May 1996 as the Customer would have been aware that hismonthly electricity bills reflected a level of consumption significantly lower than hisactual consumption. The Company said the Customer should have brought this totheir attention immediately.5.2 The Company presented documentation to support its position, including:(i) Customer electricity bills before and after January 2005;(ii)(iii)a statement of the Customer’s account since February 2001; anda letter from an ONEC meter reader saying he was responsible for meterreading errors as he did not know how to take readings from a three-phasemeter as opposed to a single phase meter.5.3 The Company noted that the meter reading, billing and revenue collection contractdid not provide any redress against ONEC in respect of meter reading errors. TheCompany said it had no choice other than to seek to recover under recoveredamounts from the Customer.Page 3 of 6

5.4 The Company explained the basis of its calculation of under recovered amountsas follows: it had identified the total number of units (kWh) supplied to theCustomer’s premises between May 1996 and January 2005 and had thensubtracted the total amount of units (kWh) billed between May 1996 and January2005. Remaining un-billed units were then apportioned over intervening monthsusing assumptions about the Customer’s average monthly consumption.6. Matters Considered by the Authority6.1 The Authority has given very careful consideration to the documentation,information and points presented to it by the Customer and the Company.6.2 The Authority is surprised and concerned at the poor quality of informationpresented by the Company. The information contains several inconsistencies, isnot meaningful in several important respects, and does not provide an accuraterecord of the management of the Customer’s account since May 1996.6.3 The Authority notes that the Customer had settled all electricity bills presented tohim in a timely manner, and that there is no record of late payment, non-paymentor disconnection of his account.6.4 With regard to the Company’s assertion that the Customer had a responsibility toensure his electricity bills were an accurate reflection of his actual consumption,the Authority notes that the Company was unable to provide documentation insupport of this assertion nor is there mention of any such responsibility in theterms and conditions of supply.6.5 The Authority reviewed the terms of the ONEC meter reading, billing and revenuecollection contract and notes the following provisions:• section 4.11.2 para c & d of the contract states that with regard to numeracyand literacy, meter readers must be able to accurately record meter readingsas well as meter and installation details. Meter readers also require skills torecognize and understand different metering installations; and• section 4.11.3 of the contract requires ONEC to implement a training policy toensure all new employees who read meters and collect payments areadequately trained before commencing work. The contract stipulates a basicskills course to ensure an ability to read a meter index and capture readingsfrom different meter types installed in the field.6.6 It is clear to the Authority that ONEC had a contractual responsibility to ensure itsmeter readers were adequately trained and competent to perform the meterreading functions stipulated in the contract.Page 4 of 6

6.7 Further research by the Authority revealed that during the tendering of the ONECcontract a question arose as to whether the contract should include a provisionholding the contractor responsible for non-technical losses due to the meterreading errors. MHEW did not consider such a provision to be necessary orrelevant.7. Determination7.1 It is clear to the Authority that the Company not the Customer is responsible forthe meter reading, billing and revenue collection functions. The Customer'sresponsibilities are set out in the terms of supply.7.2 The Company is responsible for ensuring that meter reading, billing and revenuecollection functions are conducted in an appropriate manner and that anycontractor undertaking meter reading, billing and revenue collection functions onits behalf performs those functions in an appropriate manner and in accordancewith the terms of a relevant contract.7.3 The Authority considers it unreasonable for the Company to hold the Customerliable for mistakes or errors of the Company or its contractors for unlimitedperiods. We note that the Company’s contract with ONEC does not address theissue of ONEC's liability for meter reading errors and will ask the Company torectify this omission as a matter of priority.7.4 The Authority acknowledges that the Customer had the benefit of charges forelectricity supplied to him that did not properly reflect the cost of his actualelectricity consumption. It is therefore appropriate that the Customer recompensethe Company for under recovered revenue for a stipulated period.7.5 The Authority determines that :(i)the period for which the Company may recover under-recovered revenuefrom the Customer shall be limited to no more than twelve months (in thepresent case this applies to unbilled consumption between a specified date inJanuary 2004 and the same date in January 2005);(ii) the Company shall provide the Authority with details of its calculation of theamount of under recovered revenue it proposes to recover from the Customerfor confirmation and approval; andPage 5 of 6

(iii) payments by the Customer shall be in installments and in accordance with atimescale stipulated by the Authority. The Authority will, when determining thenumber and amount of installments and the period over which suchinstallments shall be made, take due account of the Customer's financialcircumstances.7.6 The Authority notes that this determination is subject to Appeal pursuant to Article(125) of the Sector Law.Page 6 of 6