Abu Dhabi Department of Energy sets revenue limits for water, wastewater and electricity sector operators

Abu Dhabi: The Abu Dhabi Department of Energy (DoE) issued the Second Regulatory Control for water, wastewater and electricity sector operators, which sets the revenue limit at Dh50 billion for January 2023 to December 2026, to ensure operator efficiency and strengthen regulatory framework.

Those controls will apply on each of the following companies: Abu Dhabi Distribution Company (ADDC), Al Ain Distribution Company (AADC), Abu Dhabi Transmission & Despatch Company (TRANSCO), and Abu Dhabi Sustainable Water Solutions Company (ADSWSC), previously known as Abu Dhabi Sewerage Services Company (ADSSC).

Eng Ahmed Mohamed Al Rumaithi, DoE Undersecretary said: “This achievement was the outcome of a collaborative effort, extensive consultations and dedicated work involving the Department of Energy, Abu Dhabi National Energy Company (TAQA) and various sector companies.

“The newly implemented procedures reflect the ongoing transformations in Abu Dhabi's regulatory framework, strengthen regulatory frameworks while adhering to the highest transparency standards, and ensure the efficiency of companies operating in the sector. The controls enable companies to effectively carry out their operations and manage their activities with increased efficiency, not to mention reinforcing the companies' capacity to finance economically and technically viable capital projects in the future.”

These controls outline the maximum allowed revenues and individual allowed profit margins for each company. Agreements on investment levels are also made in order to achieve the desired goals while maintaining the predetermined and essential cost levels for business operations.

The Department of Energy, as the regulatory authority in charge of regulating the sector, plays a critical role in ensuring the success of price controls, while carefully striking a balance between the needs of customers, investors, the government and companies operating in the sector.

The main objectives of the newly implemented controls are to protect customer interests by ensuring security of supplies, accommodating the ongoing growth of the sector, providing top of the line services and safeguarding investor interests by offering a reasonable return on infrastructure investments and financially and technically feasible projects. These controls aim to fulfil the government's goals of mitigating carbon emissions, fostering sustainability, facilitating the transformation of the energy sector, improving the regulatory framework for companies and continuously enhancing performance while also ensuring companies' ability to fund their operational and capital endeavours.