Saturday, March 08, 2008

Power to the people

How much are my utilities bills going to go up as a result of DEWA’s recent decision to penalise heavy consumers? I did some basic calculations on energy and water usage. I compared the consumption of the Crumbling Villa with typical tariffs for domestic energy and water in the UK. The latter were lifted off the internet.

British water costs around 90p a cubic metre, which equates to Dh0.03 per gallon. The same price as DEWA charges for expats’ water. And despite the almost complete absence of rain, we don’t get subjected to the annual Festival of the Hosepipe Ban that runs from about Easter to August Bank Holiday. South East Water charges an astonishing £1.70/cu.m (Dh0.56/gallon) during the summer months and then forbids hosepipes, sprinklers, car washing and drinking without due care and attention. Or was that the government’s policy on binge-drinking?

Electricity is a bit more complicated to compare. Every summer month the Crumbling Villa consumes some 3500kWh, which drops to 500kWh in the winter when the air conditioning is off. So interior climate control uses 3000kWh per month, which costs around Dh600 at DEWA’s expat rate. Running the same aircons on British electricity would cost a rather scary Dh2175 a month.

But help is at hand, even in Rip-Off Britain. Gas is cheaper than electricity. If (and this is a very big if) the same number of energy units were used for central heating as for aircons, and utilising my fantasy gas-powered A/C, the monthly gas bill would be about Dh565. This is broadly in line with what it costs at the hands of DEWA. The cost of cooking gas is so minuscule I’ve ignored it in these calculations.

So even given DEWA’s new price rises, the costs aren’t wildly in excess of famously-expensive Britain. I haven’t been able to find out if the UK tariffs quoted are inclusive or exclusive of VAT. They’re certainly exclusive of the insidious Standing Charges that some UK suppliers slap on the bill even if you use nowt. Perhaps we should stop whingeing and realise that the bills aren't stupidly high.

Why has DEWA jacked up its tariffs anyway? I estimate that the Crumbling Villa will cost around 20% extra over the year. According to DEWA’s own figures and based on two people sharing, in order to avoid the high rates, consumption will have to be below 60% of average consumption. Apparently average consumption is considered excessive. Is the price rise to discourage profligate usage? Or to save the planet? Perhaps to jump on the ‘save the planet’ fashion bandwagon whilst making no appreciable difference to any carbon footprint? Or perhaps – and this is easily the most plausible – to make money.

According to the 22-28 Feb 2008 issue of the Middle East Economic Digest, the decision to hike the tariffs was ‘…triggered by DEWA losing Dh223M in the first seven months of 2007.’ Essentially, a lack of local gas forces DEWA to buy expensive oil from Abu Dhabi. At the thick end of $100 a barrel this ain’t small change. Certainly, a price hike ostensibly to curb consumption needs to be more wide-ranging if it’s to be effective.

MEED again: An Abu Dhabi industry source said “[Emiratis] are the biggest users by a long way. Unless they include Emiratis, it does not really make sense, especially for water. Their per capita consumption is much higher because of the kind of accommodation they live in.”

Another source in Dubai said “Even though they are a minority of the population, locals are the majority of water users. The biggest users are the palaces. The government is now pushing sustainability in Dubai and Abu Dhabi. It needs to get a handle on government consumption.”

UAE nationals in Dubai get half-price water and pay about a third of the electricity tariff that expats have to pay. In Abu Dhabi, domestic electricity is cheaper than in Dubai. It’s Dh0.15 rather than Dh0.20 per kWh, and nationals pay a third of this. Water is cheaper too. Expats pay Dh0.01 per gallon, as opposed to Dh0.03 per gallon in Dubai and for nationals it’s free.

Of course, UAE leaders can set up whatever rules they choose, and if this includes charging one part of the population more than another for basic amenities, then so be it. I would suggest, however, that adopting a similar approach to everybody – usage of electricity and water above a predetermined limit incurs higher rates – would go a long way in discouraging waste and introducing the perception of fairness.



the real nick said...

What pisses me off even more though, is that the consumption
is not always read but estimated.

The estimates are invariably inflated when retrospectively compared to the actual consumption.

Does this mean (??) that I will have to pay the higher figure for the estimated consumption when the actual would have been priced in the lower band.

I hope DEWA then adjusts my bills over the year - which would be only fair - but then again, why should I accept to be overcharged in the first place!?

Grumpy Goat said...

You're right, TRN. The issue of estimated readings is one I'd not considered.

If I use 2000kWh every month and get an estimate of 3000kWh in Month 1 followed by an actual of 1000kWh in Month 2, that means I pay the high rate for 1000kWh, but have never exceeded the actual consumption that warrants the high rate.

I for one will be watching my DEWA bills with extreme care.

Gnomad said...

Back in the UK some years ago I had an arrangement in place where I paid 10 UKP each month for gas and settled any difference either by paying the excess or (which I supposed more likely, since my gas bill at my previous residence was about 6UKP each month)) the gas company making a refund. However after a series of estimated gas bills that I considered hugely inflated I canceled this arrangement and refused to pay any more until the gas company actually came and read the meter.

When they finally did read the meter I got an enormous gas bill. The amount of the actual reading was so low that the gas board concluded that I had clocked the meter over and it had started again from zero.

This meant, I pointed out to them, that in less than 18 months, by their own calculations, I must have consumed over 1 million cubic meters of gas! What did they think I was? I queried. A methane breather perhaps?

Fortunately I still had the gas companies "on occupation" reading of the meter but I still had to get really stressed with them to get them to admit their error and get the bill to show a necessary refund of some 60 UKP instead of almost 500 UKP outstanding.

any estimated bill should, by law, only be chargeable at the minimum tariff (if allowed at all). If the company can't be bothered to read the meter they aren't entitled to the money in my view.

Anonymous said...

Don't forget that in the UK the water cost is only a small part of the total charged. On my last bill from Severn Trent, "water supply" was £1.15 per cubic meter. Then there is "used water drainage" at £0.79 per cubic meter, so for 19 cubic meters I paid £36.86. "Measured drainage" (disposing of rain water) is £36.91, and two standing charges add up to £15.24.
So a total of £89.01 means that my 19 cubic meters were actually £4.68 each.
On the bright side, it's free on the boat, at least until BW spot the charging opportunity.
Regards, Eric the Boat

LawfulGoodOfCowplain said...

I have been charged for boat water Eric, but that is from a robdog marina on the Thames, despite my being there to purchase their fuel, pumpout and some bits from their swindlery.

It was "only" UKP1.

dubaibilly said...

Very interesting article, Grumpy. We do tend to complain that Dubai is hugely expensive and getting more so all the time and I believe that most people find it more expensive that back home - perhaps that is nostalgia - it is about 12 years since I was last working in the UK and I couldn't afford to live on my one job then - I'm not convinced things are any different there now.

I really do think that an awful lot of people in Dubai just like complaining about their lot.

El Casareño Ingles said...

Compaerd to Spain where my water bill has been around 2.50 euro a quarter for the last four years (every reading has been an estimate since the meter cannot be read from outside).

Although cjeap, it means there is very little incentive here to save or economise on water use.

Although our supply is probably secure for this summer, I'd keep an eye on what might be happening further east from Almeria up to Barcelona - one of the driest winters on record and reservoir levels down to about 40% of capacity going into the dry season.

alexander said...

Here in the wild wastelands of Sharjah, I refused to take the 'piped' gas that SEWA offered and have stayed with the bottled stuff. That's gone up from Dhs30 a bottle to Dhs 85 in the past few years - and I swear they're underfilling the big yellow bombs too.

But they're still good for 4 months' cooking...

Woe is us, eh?


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