kingdom of saudi arabia - ecra

Kingdom of Saudi Arabia

Electricity & Cogeneration Regulatory Authority

Disclaimer: This is a translation of these regulations from the Arabic original. It is provided for the convenience of

non-Arabic speakers. The Arabic text is the official reference and shall govern in case of disagreement between the English and Arabic versions.

The Electricity Law's

Implementing Regulations Related to The Duties of The Authority



Disclaimer: This is a translation of these regulations from the Arabic original. It is provided for the convenience of non-Arabic speakers. The Arabic text is the official reference and shall govern in case of disagreement between the English and Arabic versions.

For further information about the Authority please contact : The Public Relations Department

Electricity & Cogeneration Regulatory Authority P.O.Box 4540 Riyadh 11412, Kingdom of Saudi Arabia

Operator: +966 1 201 1900 Tel.: +966 1 201 9040 – Fax: +966 1 201 9044 – Email : [email protected]

C Electricity and Co-Generation Regulatory Authority, 2007

ALL RIGHTS RESERVED FIRST EDITION 1428 H. – 2007 A.D

King Fahd National Library Cataloging-in-Publication Data Saudi Arabia Electricity and Cogeneration Regulatory Authority

The Electricity Law Implementing Regulations related to the duties of Authority, Saudi Arabia.

Electricity and Cogeneration Regulatory Authority, Riyadh, 2007 112 p; 21 x 30 cm ISBN: 9960 – 9939 – 0 – 6 1- Electricity- Saudi Arabia 2- Electric Utilities- Regulation – Saudi

Arabia 1- Title 333, 79309531 dc 1428/ 3666

L.D. No. 1428 / 3666 ISBN: 9960 – 9939 – 0 - 6



The Electricity Law's

Implementing Regulations Related to The Duties of The Authority

Disclaimer: This is a translation of these regulations from the Arabic original. It is provided for the convenience of

non-Arabic speakers. The Arabic text is the official reference and shall govern in case of disagreement between the English and Arabic versions.

TABLE OF CONTENTS

TABLE OF CONTENTS

CHAPTER ONE – PRELIMINARY PROVISIONS

ARTICLE 1 – DEFINITIONS ........................................................................................... 12

ARTICLE 2 – INTERPRETIVE PROVISIONS ................................................................ 18

CHAPTER TWO – DATA & INFORMATION ...........................................................

ARTICLE 3 – SUBMISSION OF INFORMATION TO AUTHORITY .......................... 20

ARTICLE 4 – PROVISION OF INFORMATION BY AUTHORITY ............................. 20

CHAPTER THREE – LICENSING

PART 1 – LICENSING OF ELECTRICITY ACTIVITY

ARTICLE 5 – DEFINITION OF ELECTRICITY ACTIVITY ......................................... 26

ARTICLE 6 – ELECTRICITY ACTIVITIES EXMEPTED FROM LICENSING OR

SOME OF ITS REQUIREMENTS .............................................................

28

ARTICLE 7 – AUTHORIZATION PROCEDURES AND CRITERIA ............................ 29

ARTICLE 8 – LICENSING PROCESS AND CRITERIA ................................................ 30

ARTICLE 9 – LICENCE RENEWAL, AMENDMENT, SUSPENSION,

REVOCATION, AND WITHDRAWAL ...................................................

32

ARTICLE 10 – LICENSING FEES ................................................................................... 34

ARTICLE 11 – CONDITIONS OF LICENSING .............................................................. 35

PART 2 – CONNECTION

ARTICLE 12 – STANDARD CONNECTION OFFERS .................................................. 40

ARTICLE 13 – CONNECTION AND USE OF SYSTEM OFFERS ................................ 40

ARTICLE 14 – PROVISION OF INFORMATION ON CONNECTION

AGREEMENTS ........................................................................................

44

ARTICLE 15 – NON- COMPLIANT CONNECTION OFFERS AND AGREEMENTS 44

PART 3 – RELATIONSHIP OF LICENSEES WITH USERS AND CONSUMERS

ARTICLE 16 – NO UNDUE DISCRIMINATION ........................................................... 48

ARTICLE 17 – AVAILABILITY OF INFORMATION TO CONSUMERS ................... 48

ARTICLE 18 – QUALITY OF SERVICE FOR CONSUMERS ....................................... 49

ARTICLE 19 – SUSPENSION OR TERMINATION OF SERVICE TO

CONSUMERS...........................................................................................

50

PART 4 – ACCESS TO PROPERTY

ARTICLE 20 – RIGHT OF ENTRY ON LANDS ............................................................. 52

ARTICLE 21 – RIGHTS OF EXPROPRIATION OF LAND ........................................... 52

ARTICLE 22 – SITES WITH ENVIRONMENTAL OR HISTORICAL SIGNIFICANCE ..... 53

CHAPTER FOUR – TARIFFS

ARTICLE 23 – TARIFFS .................................................................................................. 56

CHAPTER FIVE – COMPETITION AND ANTI-COMPETITIVE CONDUCT

ARTICLE 24 – ANTI-COMPETITIVE PRACTICES ...................................................... 60

ARTICLE 25 – REMEDIES FOR ANTI - COMPETITIVE PRACTICES ...................... 61

ARTICLE 26 – MERGERS OR ACQUISITIONS ............................................................ 62

CHAPTER SIX – RESTRUCTURING OF THE ELECTRICITY INDUSTRY

ARTICLE 27 – RESTRUCTURING OF THE ELECTRICITY INDUSTRY .................. 68

CHAPTER SEVEN – DISPUTES AND VIOLATIONS

PART 1 – DISPUTES & DISPUTE RESOLUTION PROCEDURES

ARTICLE 28 – GENERAL................................................................................................. 74

ARTICLE 29 – CONSUMER DISPUTES ......................................................................... 76

ARTICLE 30 – MEDIATION ............................................................................................ 77

ARTICLE 31 – DISPUTE RESOLUTION PROCESS BY THE AUTHORITY .............. 79

ARTICLE 32 – EXPLANATORY MEMORANDUM ...................................................... 81

PART 2 – ENFORCEMENT ACTION

ARTICLE 33 – INTRODUCTION .................................................................................... 84

ARTICLE 34 – CONTRAVENTIONS .............................................................................. 84

ARTICLE 35 – INVESTIGATIONS OF VIOLATIONS .................................................. 87

PART 3 – URGENT ACTIONS

ARTICLE 36 – PROCUREMENT OF ADDITIONAL GENERATION CAPACITY...... 92

ARTICLE 37 – CONTINUITY OF SERVICE ..................................................................

ARTICLE 38 – APPLICATION OF CUSTODIANSHIP ACTION ..................................

92

93

CHAPTER EIGHT – FINAL PROVISIONS

ARTICLE 39 – POWERS .................................................................................................. 96

ARTICLE 40 – EFFECTIVE DATE OF THE IMPLEMENTING REGULATIONS ....... 96

ARTICLE 41 – AMENDMENTS ...................................................................................... 96

ANNEX 1

RULES AND PROCEDURES OF THE ELECTRICITY INDUSTRY

DISPUTES RESOLUTION COMMITTEE........................................................................

98

ANNEX 2

RULES AND PROCEDURES FOR APPLICATION OF CUSTODIANSHIP ....................

106


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ARTICLE 1 - DEFINITIONS

1.1 The terms defined in the Electricity Law shall have the same meaning in these Implementing Regulations, unless the context otherwise requires. For ease of reference, these are included in the list of definitions below and are marked with an asterisk (*).

1.2 The following words and expressions, when used in these Implementing Regulations, shall have the corresponding meanings assigned to them, unless the context otherwise requires:

Ministry* The Ministry of Water and Electricity.

Minister* The Minister of Water & Electricity.

Authority* The Electricity & Cogeneration Regulatory Authority.

Governor Governor of the Authority

Board* The Board of directors of the Authority.

The Law The Electricity Law issued under the Royal Decree No. (M/56) dated 20 Shawal 1426H.

The Charter Founding Charter of the Electricity & Cogeneration Regulatory Authority.

Person* Natural or juridical person.

Cogeneration * The simultaneous production of electricity and desalinated water, or steam used in other production processes, or both.

Electricity Industry* Electricity services that Persons undertake or intend to undertake, including electricity generation, cogeneration, and the transmission of electricity, its distribution, supply and trading.

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Electricity Activity* Any of the activities mentioned in the definition of Electricity

Industry.

Dominant Position*

Having the ability to influence the fairness of decision-making or legitimate competition.

Consumer* Any Person supplied with electricity services for his own consumption.

Licence* An authorization granted by the Authority to carry out an Electricity Activity pursuant to the Law, its Implementing Regulations and the Authority’s Charter.

Licensee*

Every Person holding a valid Licence issued by the Authority authorizing him to carry out an Electricity Activity.

Trading* The sale, purchase, import or export of a product or service included in an Electricity Activity.

Tariff* The approved monetary charge for the provision of a service or product included in Electricity Activities.

Price* Monetary or in-kind charge agreed upon between two or more Persons for the provision of a service or product included in Electricity Activities.

Electricity Market* The circumstance in which sale and purchase of electricity are subjected to free market factors where the Price is governed by the law of supply and demand.

Merger or Acquisition

The merger, acquisition or establishment, direct or indirect, by one or more Licensees, whether by purchase of shares, purchase or lease of assets, amalgamation, combination or otherwise, to have Control over a significant interest in the whole or a material part of a business of a Licensee.

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Charging Statement An explanatory statement approved by the Board setting out the basis

and criteria on which the costs of connection to, and use of the network are based by the Licensee or the Consumer as stated in Article (13.4).

Authorization Means a statement given by the Authority in relation to preparatory work (including the developing of plans and carrying out of studies) prior to the commencement of the construction works for the Electricity Activity.

Mediation A process in which a representative of the Authority conducts discussions among the parties to a dispute designed to enable them to reach a mutually acceptable agreement, and the term “Mediate” shall be construed accordingly.

Cogeneration Licence

A Licence issued by the Authority pursuant to Article 5.1.2 and a "Cogeneration Licensee" shall be a Person holding a Cogeneration Licence.

Retail Licence

A Licence issued by the Authority pursuant to Article 5.1.6 for the sale of electricity to Consumers. A “Retail Licensee” shall be a Person holding a Retail Licence.

Distribution Licence A Licence issued by the Authority pursuant to Article 5.1.4. A “Distribution Licensee” shall be a Person holding a Distribution Licence.

Generation Licence A Licence issued by the Authority pursuant to Article 5.1.1. A “Generation Licensee” shall be a Person holding a Generation Licence.

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Trading Licence

A Licence issued by the Authority pursuant to Article 5.1.5 for the Trading of electricity or Cogeneration products. A “Trading Licensee” shall be a Person holding a Trading Licence.

Transmission Licence

A Licence issued by the Authority pursuant to Article 5.1.3. A “Transmission Licensee” shall be a Person holding a Transmission Licence.

National Electricity Registry

The registry that includes all information, Decisions, and Licences as described in Article 4.

Control Control in any manner that results in control in fact, whether directly through the ownership of shares or other securities or indirectly through an agreement, arrangement or otherwise.

Standard Offer

An offer prepared by any Network Licensee, concerning the connection to and the use of the network by the Licensees and Large Consumers as approved by the Authority, as stated in Article (12.1).

Decision An instrument in writing made or issued pursuant to the Law, the Charter, these Implementing Regulations, or the Rules and Procedures by any of the Board, the Governor, or the Committee or an officer of the Authority authorized for that purpose.

Rules and Procedures

Further regulations adopted and updated from time to time by the Authority, in accordance with Article (4.1) of the Law and these Implementing Regulations, to be approved by the Governor. These regulations provide further or detailed rules relating to the provisions of the Law, these Implementing Regulations, Licence procedures or matters incidental to the foregoing and includes any other legal instrument that is enforceable by the Authority.

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Distribution Code

The code established by the Distribution Licensee for the operation and maintenance of the Distribution System with the approval of the Authority and covering all material technical aspects relating to connections to and the operation and use of the Distribution System and all associated installations required for the operation of the Distribution System.

Transmission Code

The code established by the Transmission Licensee for the operation and maintenance of the Transmission System with the approval of the Authority and covering all material technical aspects relating to metering, connections to and the operation and use of the Transmission System and all associated installations required for the operation of the Transmission System and including all information requirements relating to planning.

The Committee The dispute resolution committee for the Electricity Industry, established pursuant to Article (13) of the Law.

Generating Station A station comprising of one or more units for:

(a) The generation of electricity. (b) Cogeneration.

including buildings, plant and machinery, the site used for the Generating Station and its associated equipment or structures and all other associated equipment or structures used for that purpose.

Violation A violation as described in Article (14) of the Law.

Network Licensee A Transmission Licensee or a Distribution Licensee, as the case may be.

Large Consumer A Consumer which has electricity consumption above such threshold as may be specified from time to time by the Authority in the Rules and Procedures.

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Distribution System Subject to the specific provisions of the relevant Distribution Licence, a system consisting of cables, overhead lines, electrical apparatus having such design voltage(s) as may be specified in the relevant Distribution Licence used for the distribution of electricity from connection points with the Transmission System or with Generating Stations to points of delivery to Consumers or other Distribution Systems and includes any electrical installations and meters owned or operated in connection with the distribution of electricity, but shall not include any part of a Transmission System.

Transmission System

Subject to the specific provisions of the relevant Transmission Licence, a system consisting of high voltage electricity substations, lines and underground cables having such design voltage(s) as may be specified in the relevant Transmission Licence, for the conveyance of electricity from a Generating Station to a transmission substation or to another Generating Station or between two transmission substations or to or from any external high voltage interconnection, and includes any transmission lines, transformers, switchgear and other equipment necessary for and used in connection with such electrical equipment up to the interconnection with a Distribution System, but shall not include any part of a Distribution System.

Affiliate

In relation to any entity, a Person who Controls, or who is Controlled by the entity, or any other Person who is Controlled by the Person who Controls the entity.

Day Any day of the week including vacation days, and if the deadline happened to be an official vacation, it shall be extended to the first working day thereafter .

Business Day Any day on which Government offices are officially open for business in the Kingdom.

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ARTICLE 2 - INTERPRETIVE PROVISIONS

2.1 Definition of class of persons referenced: Where the Law, these Implementing Regulations or the Rules and Procedures require or prohibit an activity by a Person, the Authority may issue a Decision defining Persons related to that Person or associated entities to that Person to which such requirement or prohibition shall apply either generally or in relation to a specific situation.

2.2 Hierarchy of documents: :

2.2.1 In the event of conflict between these Implementing Regulations and the Law, the Law shall prevail over the Implementing Regulations;

2.2.2 In the event of conflict between these Implementing Regulations and the Rules and Procedures these Implementing Regulations shall prevail over the Rules and Procedures; and

2.2.3 In the event of conflict between the Implementing Regulations and the conditions of any Licences, unless specifically provided for in the Implementing Regulations, the Implementing Regulations shall prevail over the conditions of Licences.

2.3 A reference in these Implementing Regulations to an Article or a Chapter is, unless the context otherwise requires, a reference to an article or chapter of these Implementing Regulations.

CHAPTER TWO – DATA AND INFORMATION

CHAPTER TWO – DATA AND INFORMATION

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ARTICLE 3 - SUBMISSION OF INFORMATION TO AUTHORITY

3.1 Requirement to provide information: Where the Authority believes that a Licensee has information that the Authority considers necessary for the administration of the Law and these Implementing Regulations, the Authority may require that Licensee to submit the information to the Authority in accordance with Article 3.2.

3.2 Compliance by Licensees: Licensees shall comply with requests for information by the Authority pursuant to this Article 3 within such reasonable time period as specified by the Authority. Where the Licensee cannot provide the information as requested, within the time period specified, or in the form and manner specified, it shall immediately submit to the Authority a response stating why the information cannot be provided and what alternative information is available that may meet the Authority’s requirements. The Authority may:

3.2.1 accept the alternative information stated in the response and may reserve the right to require the Licensee to provide the information originally requested at a later date; or

3.2.2 reject the explanation for non-availability of information in the response and require the original information to be provided within the original period or such further time period as may be stated.

3.3 Use of information: The Authority may use any information received by it in carrying out its functions.

ARTICLE 4 - PROVISION OF INFORMATION BY AUTHORITY

4.1 Keeping of register: The Authority shall maintain a National Electricity Registry. The National Electricity Registry shall contain:

4.1.1 the full text of all Licences;

4.1.2 a record of Decisions;

4.1.3 the full text of all codes and standards approved by the Board, and amendments to such codes and standards from time to time;

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4.1.4 standard connection offers and standard connection agreements approved by the Authority;

4.1.5 current licence fees payable to the Authority pursuant to the Law and the Charter and these Implementing Regulations;

4.1.6 electricity and Cogeneration capacities of Generating Stations in the Kingdom;

4.1.7 the installed capacity of the Transmission System(s) and Distribution Systems operated by Licensees in the Kingdom;

4.1.8 updated information on system expansion plans and demand forecast information submitted to the Authority by Licensees pursuant to the conditions of their Licences; and

4.1.9 any other information the Authority deems appropriate.

4.2 Exclusion of entries: The Authority may exclude an entry from the National Electricity Registry where in its opinion inclusion of the entry would be against the public interest or otherwise be contrary to the objectives of the Law and shall exclude information provided to it which is confidential in accordance with Article 4.7.

4.3 Inspection of register: The list of contents of the National Electricity Registry shall be made available to the public by the Authority. Any Person may inspect the list of contents and request copies of items on, or extracts from, the register during the times, and subject to payment of the fees, specified by the Authority.

4.4 Availability of Licences: Licences shall be in writing and, subject to Article 4.7, shall be placed by the Authority on the National Electricity Registry and may be made available on the Authority’s website. Licence application forms shall also be available on the Authority’s website. There shall be no requirement under this Article 4.4 for documents that may be referenced in Licences to be placed on the National Electricity Registry.

4.5 Provision of reasons for Decisions: The Authority shall issue written justifications in respect of the following:

4.5.1 its Decision to grant, exempt or deny any Person a Licence;

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4.5.2 any Decisions affecting the existing rights of any Person, if the affected Person requests such written reasons;

4.5.3 any Decision as the Authority deems necessary.

4.6 Determination of facts: The Authority may, in exercising its functions and performing its duties under any provision of the Law and these Implementing Regulations, assess the evidence and prepare a statement of its findings of the facts of the matter under consideration. The Authority may:

4.6.1 update such statement of facts;

4.6.2 rely on such statement of facts in issuing any Decisions, including in determining whether there has been a Violation of the Law or the Charter, or the Implementing Regulations or the Rules and Procedures; and

4.6.3 provide such statement of facts to the Committee to assist in the consideration of any dispute.

The Authority may, where it considers appropriate, make such statement publicly available.

4.7 Confidential information: The Authority may not make information available to third parties or to the public where the provider of the information has clearly marked such information as confidential, except where such information:

4.7.1 is or becomes generally available to the public otherwise than through contravention of this Article 4.7;

4.7.2 is already known by the Authority or provided to the Authority (previously or subsequently) without being marked confidential;

4.7.3 is required by law to be disclosed; or

4.7.4 is disclosed to the agents or advisers of the Authority, provided that such agents or advisers are subject to an obligation to maintain the confidentiality of such information.

The Authority may make all other information publicly available and, for the avoidance of

23

doubt, the contents of a Licence granted by the Authority may not be classified as confidential information pursuant to this Article 4.7.

4.8 Making information publicly available: Where these Implementing Regulations or the Rules and Procedures require the Authority to make any information available to the public, such obligation shall:

4.8.1 be subject to the confidentiality restrictions set out in Article 4.7; and

4.8.2 be deemed to have been fulfilled where the information is:

(a) made available for inspection at the Authority’s offices, library, notice board or other publicly designated locations by the Authority for such inspection purpose; or is made available to the public on the Authority’s official website, newsletters or any other form of publication; or

(b) published in the Official Gazette in accordance with the regulations governing publication in the Official Gazette.

4.9 Third party experts: The Authority may utilise such third party consultants and experts as it considers appropriate in carrying out its functions and may make information available to such third party consultants and experts, provided that confidential information shall be provided only where the third party is subject to a duty to keep such information confidential.

4.10 Notices: Notices to be given by the Authority pursuant to these Implementing Regulations or the Rules and Procedures may be given by e-mail, unless otherwise specified.

CHAPTER THREE – LICENSING PART 1 – LICENSING OF ELECTRICITY ACTIVITY

PART 1– LICENSING OF ELECTRICITY ACTIVITY

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ARTICLE 5 - DEFINITION OF ELECTRICITY ACTIVITY

5.1 Definition of Electricity Activity: Pursuant to Article (5) of the Law, and subject to Articles 6 and 7 of these Implementing Regulations, the following shall each be an Electricity Activity and shall only be carried out under and in accordance with the corresponding Licence granted by the Authority:

Article Electricity Activity Licence required

Date Licence Required

(a) developing or extending the capacity of a Generating Station for the purposes of generation of electricity at such Generating Station;

Generation Licence

From commencement of construction works.

5.1.1

(b) generation of electricity at a Generating Station.

Generation Licence

Throughout the period of generation of electricity.

(a) developing or extending the capacity of a Generating Station for Cogeneration for the purposes of Cogeneration at such Generating Station;



5.1.2

(b) Cogeneration at a Generating Station.


Throughout the period of cogeneration.

(a) developing or extending any part of a Transmission System



5.1.3

(b) transmission of electricity over a Transmission System.


Throughout the period of transmission of electricity.

(a) developing any part of a Distribution System; or

Distribution Licence


5.1.4

(b) distribution of electricity over a Distribution System for the purpose of enabling a supply to be given to any Consumer, including sale of electricity to Consumers within the authorized area of the Distribution Licence.

Distribution Licence

Throughout the period of distribution of electricity.

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Article Electricity Activity Licence required

Date Licence Required

5.1.5 Trading of electricity or Co-generation products either to other Trading Licensees or to Retail Licensees, or to Distribution Licensees where they sell such electricity to Consumers within their authorized areas.

Trading Licence

Throughout the period of Trading activity.

5.1.6 Sale of electricity to Consumers. Retail Licence Throughout the period of Retail activity.

5.1.7 Preparatory work (including the developing of plans and the carrying out of studies) prior to the commencement or extension of an Electricity Activity.

Authorization under Article 7

From the date of commencement of such preparatory work up to the date of commencement of construction activity.

5.2 Changes to licensable activities: The Authority may, by Decision of the Board from time to time, provide that specified activities in the Electricity Industry shall become, or cease to be, Electricity Activities requiring a Licence for the purposes of the definition of Electricity Activity in Article 5.1 and may by Decision of the Board establish new types of Licences or amend the types or the scope of Licences set out in Article 5.1. A Decision under this Article 5.2:

5.2.1 shall be made following consultation by the Authority with such Persons who will be affected by the Decision, as the Authority considers appropriate; and

5.2.2 may provide for necessary consequential changes to these Implementing Regulations, the Rules and Procedures, Licences and other Electricity Industry documentation approved by the Authority.

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6. ARTICLE 6 - ELECTRICITY ACTIVITIES EXEMPTED FROM LICENSING OR SOME OF ITS REQUIREMENTS

6.1 Exemption from Generation/Cogeneration Licence: A Licence shall not be required for the Electricity Activities specified in Articles 5.1.1 or 5.1.2 where the Generating Station carrying out the Electricity Activity that is not connected to a Transmission System or Distribution System – other than the systems exempted from Licensing in accordance with Article 6.2 - and the whole of electricity or Cogeneration products generated or produced at the Generating Station are consumed (or, in the case of a Generating Station being constructed, intended to be consumed) solely by the owner of the Generating Station and its affiliates.

6.2 Exemption from Transmission/Distribution Licence: A Licence shall not be required for the Electricity Activities specified in Articles 5.1.3 or 5.1.4 where the transmission or distribution electrical lines and facilities used for carrying out the Electricity Activity are not connected to another Transmission System or Distribution System and the electrical energy transmitted is consumed solely by the owner of the electrical lines and facilities and its affiliates.

6.3 Small Generation/Cogeneration Station Licence: Where not exempted by Article 6.1, generation of electricity or the production of Cogeneration products at a Generating Station with a name plate rated capacity not exceeding 30MW is hereby granted a small generation or Cogeneration (as appropriate) Licence subject to the conditions in Article 6.4. The holder of a small generation or Cogeneration Licence shall not be required to pay the annual Licence fees to the Authority under Article 10.

6.4 Persons granted a small generation or Cogeneration Licence pursuant to Article 6.3 shall:

6.4.1 provide to the Authority, in such manner and at such times as the Authority may direct, such information as the Authority may consider necessary for the purposes of performing its obligations under the Law; and

6.4.2 comply with all of the applicable Electricity Industry's standards and codes, as provided in the Rules and Procedures.

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7. ARTICLE 7 - AUTHORIZATION PROCEDURES AND CRITERIA

7.1 Each Person proposing to carry out preparatory work (including the developing of plans and the carrying out of studies) to commence Electricity Activities would require a further Licence to undertake such activities, shall apply for a statement from the Authority to proceed with the planning of the Electricity Activities (“Authorization”) from the Authority in accordance with this Article 7.

7.2 An applicant for an Authorization shall complete the relevant application form available at the Authority’s offices or on its website, as modified from time to time, which shall include the following information:

7.2.1 the name and address of the applicant;

7.2.2 the proposed capacity of the Electricity Activity and its proposed connection points to the network (if any); and

7.2.3 the proposed location and date for commencement of construction of the Electricity Activity.

7.3 The Authority shall issue an Authorization within ten (10) Business Days of receipt of a duly completed application form and required attachments.

7.4 An Authorization under this Article 7 shall be granted subject to such conditions as the Authority considers appropriate, and may include the following requirements:

7.4.1 provide information to the Authority on a periodic or other basis on progress of planned Electricity Activity;

7.4.2 notify the Authority of any changes in the proposed capacity of the Electricity Activity; and

7.4.3 apply for and obtain a Licence prior to commencement of construction of the Electricity Activity.

7.5 The Authority shall notify an applicant for an Authorization in the event of an unsuccessful application and provide the applicant with reasons for the refusal on request.

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7.6 An Authorization shall not:

7.6.1 grant any permission or licence for the construction or operation of the proposed Electricity Activity subject of the Authorization unless the Authorization holder is granted a Licence to carry out the Electricity Activity from the Authority;

7.6.2 limit in any way whatsoever (whether in relation to the activity, time or location) the Authority’s rights to grant similar Authorizations to other applicants for the same Electricity Activity at the same time and the same locations.

ARTICLE 8 - LICENSING PROCESS AND CRITERIA

8.1 Application procedure: Each applicant for a Licence shall obtain from the Authority and complete the relevant licence application form and its associated appendixes, which may include a requirement to provide the following information:

8.1.1 the name and address of the applicant;

8.1.2 a description of the specific type of Electricity Activities (for which the Licence is sought) that the applicant proposes to conduct, the geographic area (where appropriate) that the Electricity Activity would cover, and details of all facilities at which the Electricity Activities are to be performed under the proposed Licence;

8.1.3 evidence as specified by the Authority that the applicant has the financial capability to carry out the Electricity Activities for which the Licence is sought and a statement by the applicant that it would be able to finance the activities if it were to be granted a Licence;

8.1.4 evidence as specified by the Authority that the applicant has the technical capability and experience or has access to the technical capability and experience to carry out the Electricity Activities for which the Licence is sought;

8.1.5 evidence as specified by the Authority that the applicant’s proposed and existing facilities, equipment, installations, or plant necessary for performing the Electricity Activities for which the Licence is sought are consistent with the objectives of the Law (including Article (2.7) of the Law) and satisfy relevant technical, health, safety and environmental protection regulations;

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8.1.6 disclosure of any ownership interest of such applicant in a Licensee or another applicant for a Licence above such threshold as the Authority may from time to time specify;

8.1.7 with the exception of the Electricity Activities exempted from licensing or some of its requirements pursuant to Article 6, the names of the executives responsible for any Electricity Activity shall be submitted to the Authority, which may reject the application in case it objects to any one of them. The Authority may also object to any of the named executives during the validity of the licence, and the licensee's non-compliance with the Authority's decision in this regard shall be considered a Violation of the licence conditions.

8.1.8 such further information as is specified in the Rules and Procedures as made available on the Authority’s website.

The applicant shall also provide all information the Authority may reasonably request for proper consideration of the application.

8.2 Application fee: The applicant shall pay the application processing fee for the type of Licence applied for as prescribed by the Authority in the Rules and Procedures or as made available on the Authority’s website.

8.3 Acknowledgement of licence application: The Authority will acknowledge receipt of each Licence application within ten (10) Business Days of receipt of such application.

8.4 Further information: Where the Authority requires further information from the applicant or third parties to assess whether the applicant meets the required conditions for grant of a Licence, it shall notify the applicant within twenty (20) Business Days of the application (or such longer period as the Authority considers reasonable in the circumstances) and the following shall apply:

8.4.1 the notice shall specify any information required from the Licensee and the time period within which such information must be provided and a date by which the Authority intends to make a final Decision on the application;

8.4.2 the Authority shall also notify such third parties as it considers appropriate, indicating whether it requires information or comments, and specifying a time period within which these must be provided;

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8.4.3 the Authority may make the proposed Licence available to the public and invite views from interested parties.

The Authority shall take information provided into account and shall (except where such date is extended by notice to the applicant with reasons for the extension) make a final Decision on the application by the date specified in the notice.

8.5 Refusal of licence: the Authority shall not grant a Licence to an applicant who does not fulfil the requirements of the Law, these Implementing Regulations and the relevant Rules and Procedures.

8.6 Notification of decision: The Authority shall notify the applicant of its decision regarding the grant or refusal of a licence within thirty (30) days from the receipt of a duly completed application and submittal of information required in a manner acceptable to the Authority.

8.7 Publication of licence application decisions: The Authority will publish its Decision on each Licence application and, in the event of a successful application, issue and (subject to Article 4.7) publish the relevant Licence. The Authority shall provide reasons for the denial of a Licence to the applicant upon request.

8.8 Additional application procedures: The Rules and Procedures shall provide sufficient information to enable applicants to file complete applications including:

8.8.1 forms for Licence application, which may be different for different types of Licences;

8.8.2 further details relating to information to be provided by an applicant for a Licence; and

8.8.3 further procedures relating to Licence applications, including in relation to the filing of further information in relation to incomplete applications.

ARTICLE 9 - LICENCE RENEWAL, AMENDMENT, SUSPENSION, REVOCATION AND

WITHDRAWAL

9.1 Amendment: The Authority may renew, amend, suspend, revoke, or withdraw a License

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in the following circumstances:

9.1.1 if the Licensee has requested such action;

9.1.2 if the Licence conditions require such action;

9.1.3 if the Licensee contravenes the Licence or commits a Violation.

9.2 Amendment proposal by Licensee: Where a Licensee has applied for an amendment pursuant to Article 9.1.1, the Authority shall within twenty (20) Business Days notify the Licensee whether it approves or rejects the proposed amendments or that it requires further information from the Licensee or third parties to properly assess the proposed amendment, in which case the following shall apply:

9.2.1 the notice shall specify any information required from the Licensee and the time period within which such information must be provided and a date by which the Authority shall make a final Decision on the proposed amendment ;

9.2.2 the Authority shall also notify such third parties as it considers appropriate, indicating whether it requires information or comments, and specifying a time period within which these must be provided; and

9.2.3 the Authority may make the proposed amendments available to the public and invite views from interested parties.

The Authority shall take information provided into account and shall make a final Decision on the proposed amendment by the date specified in the notice, and may make any approval of the proposed amendment subject to such further conditions, or amendments to the Licence, as it considers appropriate.

9.3 Amendment pursuant to Licence conditions: Where a Licence is being amended pursuant to a condition of the Licence, such amendment shall take effect in accordance with such procedures and on such date as may be prescribed.

9.4 Process pursuant to Authority action: Prior to any amendment, refusal to renew, suspension or revocation of a Licence pursuant to Articles 9.1.3, the Authority shall notify the Licensee in writing that it is considering the relevant action. The notice:

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9.4.1 shall give the Licensee sufficient time to prepare and submit comments (including, where requested by the Authority or the Licensee, a presentation to the Authority) on the relevant action including any measures the Licensee is taking or proposes to take to remedy any events or circumstances complained of by the Authority;

9.4.2 shall set out any procedures the Authority will use in considering the relevant action;

9.4.3 may invite comments from other concerned parties if the Authority deemed it necessary.

9.5 Date of effect: If the Authority amends, suspends or revokes, or does not renew, a Licence pursuant to Article 9.4, it shall give the Licensee such time as the Authority considers appropriate (taking into account the comments of the Licensee under Article 9.4) to comply with the Decision and shall specify a date on which the amendment, suspension, revocation or expiration shall take effect.

9.6 Renewal of licences: Six (6) months before the expiry of the term of its Licence, the relevant Licensee shall notify the Authority whether it intends to seek renewal of its Licence. The Authority shall notify the Licensee not later than three (3) months before the expiry of the term of the Licence whether it requires the Licensee to submit a formal Licence renewal application. Where the Authority does not so notify the Licensee, it shall renew the Licence for a term not less than one (1) year commencing on expiry of the current term during which period the Authority and Licensee shall meet to discuss issues related to the renewal or further extension of the Licence.

ARTICLE 10 - LICENSING FEES

10.1 Types of fees: In accordance with the Law and Charter the Board establishes fees payable to the Authority as stated in the Rules and Procedures, as under:

10.1.1 Application Processing Fee: one-time non-refundable payment for the processing of each application for issuance or renewal of Licences, such payment to be made at the time of the application;

10.1.2 Annual Licence Fee: for the maintenance of Licences, payable by Licensees on

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an annual basis within one month of the date due as specified in the Rules and Procedures;

10.1.3 Additional Services Fee: for other services provided by the Authority as specified in the Rules and Procedures, payable within one month of the date specified in the Authority’s invoice.

10.2 Amount and classification: The Authority shall set out in Rules and Procedures the methodology, requirements, conditions and determination of the fees to be charged pursuant to Article 10.1 in accordance with the following principles:

10.2.1 fees shall be transparent, non-discriminatory, objectively justifiable and appropriate for the type of licensed Electricity Activity;

10.2.2 the total amount of fees charged by the Authority shall be intended to permit the Authority to recover its total costs and maintain appropriate reserve requirements associated with its regulatory activities stipulated in the Law and shall take into account the need to foster the development of competition and to enhance the operational efficiency of the electricity system;

10.2.3 the total amount of fees charged by the Authority pursuant to Article 10.2.2 above shall be distributed proportionately among Licensees according to transparent, clear and fair principles to be determined by the Board.

ARTICLE 11 - CONDITIONS OF LICENCES

11.1 Licence conditions: The Authority shall include in Licences such conditions as it consider appropriate to implement the objectives of the Law and the requirements of these Implementing Regulations, including, without limitation, conditions that address the following matters:

11.1.1 the term for which the Licence is granted and shall be effective, taking into account the design life of the plant, lines and other facilities to be used to carry out the licensed Electricity Activities;

11.1.2 scope of the Electricity Activities for which a Licensee is granted a Licence and which the Licensee is authorized to carry out ;

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11.1.3 activities that the Licensee is prohibited from carrying out (if any), including any conditions on ownership of the Licensee or by the Licensee of other businesses carrying out Electricity Activities;

11.1.4 notification and authorization by the Authority of a proposed Merger or Acquisition involving the Licensee;

11.1.5 the level of and requirements for segregation of Electricity Activities from other activities of the Licensee for accounting and regulatory purposes;

11.1.6 provision of accounting information by the Licensee to the Authority;

11.1.7 provision of such information by the Licensee to the Authority as is required by the Authority to carry out its functions;

11.1.8 compliance by the Licensee with applicable laws, codes and standards and with Decisions of the Authority;

11.1.9 terms and conditions on which the Authority may suspend, cancel, revoke or amend the Licence;

11.1.10 in relation to the Licensee’s system (as defined in the relevant Licence), entering into agreements on specified terms with other Persons for connection to or use of the Licensee’s system;

11.1.11 submission to the Authority by a Network Licensee of a Transmission Code or a Distribution Code, as applicable, for its approval by the Board, and following approval, compliance with such code and ensuring compliance with the code by Persons connected to its system;

11.1.12 a requirement for the payment of Licence fees to the Authority,

11.2 Non-exclusive grant: Unless expressly indicated in the Licence, the grant of a Licence shall not hinder or restrict the grant of a Licence to another Person for a like purpose and, in the absence of such an express indication, the Licensee shall not be entitled to claim any exclusivity, provided that the Authority may allow a licensed activity to be exclusive for all or part of the period of the Licence, for a specific purpose, for a geographical area, or for some combination of the foregoing.

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11.3 Transfers of Licence or assets: Where a Licensee wishes to cede, give, lease, assign or exchange its Licence or transfer ownership of the principal assets used in the performance of its licensed Electricity Activity it shall notify the Authority in accordance with Article (7.2) of the Law and shall provide such further information as the Authority shall request in relation to such proposed action. The Authority:

11.3.1 may make the proposed action subject to such conditions it considers appropriate, including the amendment of the relevant Licence;

11.3.2 may require the Licensee to pay such fee as the Board shall determine to recover its reasonable costs in considering and determining the application;

11.3.3 in the case of a transfer of a Licence, shall not consent to such transfer where the transferee would not be entitled to be granted the Licence.

Any action taken by the Licensee with regard to the transfer of the licence ownership or the assets shall not go into effect until the Authority's approval has been granted in writing.

CHAPTER THREE – LICENSING PART 2 - CONNECTION

PART 2 - CONNECTION

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ARTICLE 12 - STANDARD CONNECTION OFFERS

12.1 Preparation of standard offer: Every Network Licensee shall prepare a standard offer in relation to connections with and use of his network by Licensees and Large Consumers (a “Standard Offer”), for approval by the Authority within such time period as the Authority shall specify by a Decision. Network Licensees shall periodically update Standard Offers in the manner prescribed by the Authority from time to time. A Standard Offer shall:

12.1.1 comply with these Implementing Regulations and any applicable guidelines in Rules and Procedures published by the Authority, which guidelines may specify the terms to be included in the Standard Offer and standard forms of connection agreement.

12.1.2 include a standard form of agreement for connection or use of system (as applicable).

12.2 Publication of standard offer: A Network Licensee shall make publicly available its approved Standard Offer by:

12.2.1 sending a copy to the Authority;

12.2.2 making a copy available at its principal business offices; and

12.2.3 sending a copy to any Person on request.

ARTICLE 13 - CONNECTION AND USE OF SYSTEM OFFERS

13.1 Connection and use of system offers: Subject to Article 13.3 and following completion of the negotiations pursuant to Article 13.2, a Network Licensee shall, within one (1) month of receipt of a duly completed application by any Licensee or Large Consumer, offer to provide connection to or use of its Transmission System or Distribution System, as the case may be, to any applicant by means of a written agreement. Connection and use of system offers proposed by Network Licensees in accordance with this Article 13.1 shall:

13.1.1 except with the prior consent of the Authority, be consistent with a Standard Offer approved by the Authority for the Network Licensee pursuant to Article 12;

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13.1.2 shall remain open for acceptance by the applicant for a period not less than sixty (60) Business Days;

13.1.3 be transparent, non-discriminatory and objective;

13.1.4 meet all reasonable requests for access to its electricity network at any technically feasible point;

13.1.5 be subject to reasonable terms and conditions, consistent with the Law and these Implementing Regulations including, where appropriate, a requirement on the applicant to comply with the relevant industry codes and standards;

13.1.6 (where a connection is requested), include a connection agreement which would allow the connected Person to connect and keep connected specified points of connection to the Network Licensee's electricity network, and to use the Network Licensee’s system as reasonably requested;

13.1.7 (where use of system only is requested) include a use of system agreement which would allow the applicant to use the Network Licensee’s system as reasonably requested.

13.2 Good faith negotiations: Upon receipt of a written request by any Licensee or Large Consumer in such form as may be reasonably prescribed by the Network Licensee, a Network Licensee shall enter into good faith negotiations to make a connection or use of system offer. The following actions or practices by applicants shall be deemed to breach the duty to negotiate in good faith:

13.2.1 obstructing or delaying negotiations or resolution of disputes;

13.2.2 refusing to provide information about electricity facilities or requirements that are necessary for the connection arrangements;

13.2.3 misleading or coercing a party into reaching an agreement it would not otherwise have made; or

13.2.4 refusing to include a provision allowing amendment of the connection agreement to take into account Decisions of the Authority pursuant to the Law and these Implementing Regulations.

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The Consumer or the Network Licensee may refer a failure to comply with this clause to the Authority pursuant to Article 15.

13.3 Right to refuse connection or use: A Network Licensee shall only be entitled to refuse to enter into a connection or use of system agreement under Article 13.1 where to do so would, in its reasonable opinion:

13.3.1 cause or be likely to cause material danger, damage or injury to any Person or to any property;

13.3.2 cause material damage or otherwise interfere with the operation of its electricity network, electricity facilities, the provision of its electricity services or otherwise with the carrying out of its Electricity Activities;

13.3.3 not be reasonably technically feasible after considering alternative technical solutions.

Any Person refused a connection shall be entitled to refer the matter for consideration by the Authority pursuant to Article 15.

13.4 Charging Statement: Each Network Licensee shall by such date as is notified by the Authority submit for the Authority’s approval an explanatory statement setting out the basis and criteria on which the costs of connection to and use of its network are based (the “Charging Statement”).

13.4.1 The Charging Statement shall be in such form and in such detail as shall be necessary to enable any Licensee or Large Consumer to make a reasonable estimate of the charges to which it would become liable for the provision of such services by the Network Licensee.

13.4.2 The Charging Statement, and revisions to the Charging Statement, shall seek to achieve the following objectives:

(a) the facilitation of competition in the generation and retail of electricity;

(b) the recovery by the Network Licensee of its prudent (as determined by the Authority) capital expenditure and operational expenditure incurred by its transmission or distribution business (as the case may be);

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(c) the recovery of a reasonable rate of return, to be approved by the Board, on the technically prudent and economically efficient (as determined by the Authority) capital expenditure incurred by its transmission or distribution business (as the case may be) including needed reinforcements of its system.

13.4.3 Where the Network Licensee wishes to make a change to its Charging Statement, it shall submit its proposed revised Charging Statement to the Authority for its approval and such revision shall take effect only on approval by the Board. Approval by the Board may be subject to such conditions as the Board considers appropriate to meet the objectives of the Law.

13.4.4 The Network Licensee shall only enter into arrangements for connection to and use of its system with Licensees and Large Consumers which conform with the Charging Statement in effect at the date of the arrangements coming into effect. Such arrangements may provide for charges to be revised from time to time to take into account revisions to the Charging Statement.

13.4.5 The Network Licensee shall send a copy of the Charging Statement to any Person on request, subject to payment of a charge reflecting the Network Licensee’s reasonable costs of providing such Charging Statement.

13.4.6 The Network Licensee shall at least once each year review and submit to the Authority for approval its Charging Statement with such proposed revisions as may be necessary to take into account any criteria specified by the Board from time to time, in addition to those set out in Article 13.4.2.

13.5 Further obligations of Network Licensees: Every Network Licensee shall ensure that in relation to applications for connections by other Licensees and by Large Consumers:

13.5.1 it does not unduly discriminate between applicants for connection under similar circumstances;

13.5.2 it makes available on request and within a reasonable period of time all necessary information and specifications to applicants requesting connection and access;

13.5.3 it only uses information received from applicants for the purposes for which it was supplied and does not disclose the information to other departments, Affiliates or Persons to whom the information could provide a competitive advantage.

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ARTICLE 14 - PROVISION OF INFORMATION ON CONNECTION AGREEMENTS

14.1 Reports on connection arrangements: Every Network Licensee shall provide to the Authority, at such time or times as the Authority prescribes, a report on its connection and use of system arrangements. The report shall:

14.1.1 list all connection agreements with Licensees and Large Consumers to which the Network Licensee is a party;

14.1.2 certify whether or not such agreements comply fully with the Standard Offer and fully explain any variances;

14.1.3 provide such information on the quality of its connection and use of system services as the Authority prescribes;

14.1.4 contain any additional information on its connection arrangements required by the Authority.

ARTICLE 15 - NON-COMPLIANT CONNECTION OFFERS AND AGREEMENTS

15.1 Non-compliant Connection Agreements: If the Authority decides that a connection agreement is not in compliance with the Law, these Implementing Regulations or the Licence of a party to the connection agreement, it shall notify the non-compliance to the relevant Network Licensee within a reasonable period of determining the existence of the non-compliance. The Authority’s notification shall set out the basis for its Decision and require the Network Licensee to agree amendments to the connection agreement with the other party to the agreement within the time prescribed in the notice. If the parties are unable to reach agreement on the terms and conditions of a connection agreement complying with the determination of the Authority, either party may refer the matter for dispute resolution in accordance with Article 15.5.

15.2 Authority’s settlement of terms: If a Network Licensee has failed or refused to make an offer for connection or use of system to an applicant pursuant to Article 13 within the time period specified, or the applicant is dissatisfied with the terms of the offer or the negotiations, on application by either the Network Licensee or the applicant the Authority may settle any terms of the offer or agreement in dispute having regard to the provisions of this Article 15. Where the applicant wishes to proceed on the basis of the

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terms settled by the Authority pursuant to this Article 15.2, the Network Licensee shall enter into such agreement.

15.3 Disputes relating to varying of contractual terms: Where a Network Licensee or a party to a connection or use of system agreement wishes to vary the contractual terms of the agreement, the Authority may, at the request of the Network Licensee or other party, settle any dispute relating to such variation having regard to the other provisions of this Article 15.

15.4 Charges in conformity with Charging Statement: Where a Network Licensee and a party to a connection or use of system agreement are in dispute as to whether charges pursuant to such an agreement are in conformity with the relevant Charging Statement, the Authority may, at the request of the Network Licensee or other party, determine whether the charges conformed with the relevant Charging Statements.

15.5 Disputes: Disputes under Articles 15.1, 15.2, 15.3 or 15.4 shall be referred to the Authority in accordance with the provisions of Chapter Seven.

CHAPTER THREE – LICENSING PART 3 – RELATIONSHIP OF LICENSEES WITH USERS AND CONSUMERS

PART 3 – RELATIONSHIP OF LICENSEES WITH USERS AND CONSUMES

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ARTICLE 16 - NO UNDUE DISCRIMINATION

16.1 No undue discrimination: Unless otherwise specifically permitted by or pursuant to these Implementing Regulations, Network Licensees shall offer all users of their services non-discriminatory terms of service, unless different terms as may be approved by the Authority are objectively justified between users, or classes of users, based on differences in supply conditions, including different costs or a shortage of available facilities or resources.

16.2 Cessation of undue discrimination: Where any undue discrimination is shown, the Network Licensee shall be obliged to justify it to the satisfaction of the Authority, or to cease the undue discrimination immediately upon receipt of a Decision from the Authority.

ARTICLE 17 - AVAILABILITY OF INFORMATION TO CONSUMERS

17.1 Paper copies: Each Transmission Licensee, Distribution Licensee and Retail Licensee shall at its business offices maintain current paper copies of its current Tariffs and updated applicable codes and standards as approved by the Board. These paper copies shall be made available for public inspection, without charge, during normal business hours. A Distribution Licensee shall provide, upon request and without charge, paper copies of its schedule of Tariffs to any Consumer who requests them.

17.2 Website information: Each Transmission Licensee, Distribution Licensee and Retail Licensee shall where they have an official website at all times maintain on such website, the following information:

17.2.1 information that would be useful for potential applicants for connection to or use of its system, including a copy of its Charging Statement and its schedule of Tariffs;

17.2.2 a copy of any approved codes and standards applicable to the Licensee;

17.2.3 in the case of Network Licensee downloadable forms for connection applications together with guidance notes on their completion;

17.2.4 a copy of its Licence, as amended from time to time;

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17.2.5 the official website, official e-mail address and official postal address of the Authority, together with a clear statement that the Licensee is regulated by the Authority under the Law and Implementing Regulations and that Consumers, Licensees and other Persons may contact the Authority if they are unable to resolve disputes with the Licensee.

17.3 Notification of tariff changes: If the Tariffs of a Transmission Licensee, Distribution Licensee or Retail Licensee are varied, amended or supplemented in accordance with the provisions of Chapter Four, the Licensee shall notify Consumers and other users of their services as are affected by the change. The Licensee shall use reasonable endeavours to ensure that such notice is given prior to the date on which such change in Tariffs shall take effect.

ARTICLE 18 - QUALITY OF SERVICE FOR CONSUMERS

18.1 Transmission and generation consumers: Where Transmission Licensees, Generation Licensees and Cogeneration Licensees provide electricity services to Consumers, such electricity services shall comply with the quality of service standards specified in Rules and Procedures and in the connection agreements with each such Consumer. The Authority may from time to time amend, add or delete quality of service standards, following such consultation with affected Persons as the Authority considers appropriate.

18.2 Quality of service standards: Distribution Licensees shall provide electricity services that meet specific quality of service codes and standards to Consumers. The quality of service codes and standards shall be developed by the Distribution Licensee having the largest number of Consumers and shall be approved by the Authority. The Authority may provide further rules and procedures on quality of service standards in Rules and Procedures. The Authority may from time to time amend, add or delete quality of service standards, following consultation with the affected Distribution Licensee including in response to comments or complaints received by the Authority from Consumers.

18.3 Reports on quality of service standards: Where the quality of service codes and/or standards have been established by the Authority in relation to a Distribution Licensee, the relevant Distribution Licensee shall deliver written reports in respect thereof to the Authority, in a form and at a frequency established by the Authority. At the Authority’s request, such a report shall be prepared and provided by an independent

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third party. The reports shall set out the Distribution Licensee’s actual results for each quality of service standard.

18.4 Failure to meet a quality of service standard: Where any quality of service report indicates that a standard has not been achieved, the Distribution Licensee shall provide an explanation as to why the standard was not achieved and what specific steps it has taken or intends to take to correct the problem. The Authority shall advise the Distribution Licensee within thirty (30) Business Days of receipt of any quality of service report whether it accepts the explanation provided for any standard that was not achieved. If the Authority does not accept the explanation:

18.4.1 it shall issue a Decision setting out the additional steps that the Distribution Licensee shall take and the time within which those steps shall be taken;

18.4.2 it shall issue a Decision ordering what, if any, additional reporting requirements the Distribution Licensee shall adhere to, until the standard is achieved;

14.4.3 it may by order require a reduction in the Distribution Licensees tariffs or repayment to some or all of the Consumers directly connected to its Distribution System of such amount as may be specified in the order.

ARTICLE 19 - SUSPENSION AND TERMINATION OF SERVICE TO CONSUMERS

19.1 Right to suspend or terminate electricity service: Subject to other terms as may be agreed between the Licensee and a Consumer, the Authority may issue a Decision to establish the terms, conditions, process and procedure under which a Licensee shall have the right to suspend or terminate a user or Consumer’s electricity services pursuant to Article (8.3) of the Law.

19.2 A Licensee shall not be entitled to suspend or terminate services under Article 19.1 unless it has given the Consumer not less than twenty (20) Business Days written notice of its intention to do so and indicated in the notice the Consumer’s right to raise the issue as a dispute with the Authority under Chapter Seven.

19.3 Where any Person takes electricity without the permission of the Licensee, the Licensee shall be entitled to recover from that Person the value of the electricity taken.

CHAPTER THREE – LICENSING PART 4 – ACCESS TO PROPERTY

PART 4 – ACCESS TO PROPERTY

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ARTICLE 20 - RIGHTS OF ENTRY ON LANDS

20.1 Rights of entry on land: Pursuant to Article (8.2) of the Law, and subject to Article 20.2, a Person authorized by a Licensee shall be entitled to access rights for its equipment and installations as necessary on a third party’s premises up to the point of connection of the Licensee’s electric system to the electric system of a third party, for the purposes of executing its duties under its Licence, which may include:

20.1.1 to inspect lines and equipment, to connect or to disconnect the premises;

20.1.2 to install, inspect, maintain or read any electricity meter.

20.2 Restrictions: The rights of entry under Article 20.1 shall be subject to the following restrictions:

20.2.1 subject to Article 20.3, the Licensee shall give the third party reasonable notice of the proposed entry, being not less than two (2) Business Days, and the proposed time of entry shall be during reasonable hours;

20.2.2 the Licensee shall utilise properly identified and qualified personnel;

20.2.3 the Licensee’s personnel interfere as little as possible with the second party's activities and premises.

20.3 Emergencies: A Licensee shall not be required to comply with Article 20.2.1 where it requires access to deal with an emergency situation which has a risk of damaging equipment or injuring Persons.

ARTICLE 21 - RIGHTS OF EXPROPRIATION OF LAND

21.1 Application for expropriation: Where a Licensee requires land or has an interest in land to carry out its licensed Electricity Activities, the Licensee shall attempt to reach a commercial agreement with the property owner or his representative.

21.2 Application to Authority: If the Licensee fails to reach an agreement with the property owner or his representative, it may apply to the Authority for the expropriation of any necessary property pursuant to Article (8.1) of the Law. The Authority shall consider the details of the application and may:

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21.2.1 mediate between the parties to seek to find a solution acceptable to both parties;

21.2.2 propose an alternative solution to the parties (where possible);

21.2.3 determine by Decision that land is not required by the Licensee to carry out its licensed Electricity Activities; or

21.2.4 determine by Decision to initiate the exercise of its functions under the Expropriation Law in accordance with Article 21.3.

21.3 Exercise of expropriation functions: The Authority shall carry out its functions as required under the “Law for the Expropriation of Real Estate for the Public Interest and Temporary Acquisition of Properties” (the “Expropriation Law”) in relation to the application for expropriation, and shall provide a recommended solution and such further assistance as may be requested by the Minister in relation to the exercise of the Minister’s powers under the third article of Royal Decree issued for the Expropriation Law (M/15 of 11/3/1424AH).

ARTICLE 22 - SITES WITH ENVIRONMENTAL OR HISTORICAL SIGNIFICANCE

22.1 Requirement to protect designated sites: Where technically possible, and subject to the discretion of the Authority, Licensees shall protect sites designated under existing laws and regulations or identified by a public authority in the Kingdom as having environmental or historical significance from damage or disruption due to the construction, operation or maintenance of electricity networks and other electricity facilities.

22.2 Notification to Authority and compliance with Decisions: Licensees shall immediately notify the Authority where damage or disruption to sites with environmental or historical significance has or is expected to occur in connection with its licensed Electricity Activities and shall comply with any Decisions of the Authority in relation to the protection of such sites.

CHAPTER FOUR - TARIFFS

CHAPTER FOUR – TARIFFS

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ARTICLE 23 - TARIFFS

23.1 Review of tariffs: In accordance with the Law and Charter, the Authority shall review and recommend Tariffs to be collected by Licensees from Consumers or other users of electricity services in the following circumstances:

23.1.1 where the Council of Ministers requests that the Authority carry out a review of the Tariffs;

23.1.2 where the Authority considers it appropriate, having regard to the circumstances, to initiate a review of the Tariffs;

23.1.3 where the relevant Licensee has requested the initiation of a review, with reasons, and the Authority considers it appropriate, having regard to the circumstances, to initiate an interim review of the Tariffs,

and in the case of a review under Articles 23.1.2 and 23.1.3, the Authority shall notify affected Licensees of the circumstances which make it appropriate to undertake a review of the tariffs.

23.2 Review notice: To initiate a Tariff review pursuant to Articles 23.1.1, 23.1.2 or 23.1.3, the Authority shall send a review notice to the Licensees and such other Persons as the Authority considers appropriate.

23.3 Information in review notice: A review notice under Article 23.2 shall set out:

23.3.1 the period to which the Authority expects the review to relate (“the review period”);

23.3.2 the date by which the affected Licensees and other notified Persons are to provide such information as is specified by the Authority (in the review notice or otherwise) to enable the Authority to carry out the Tariff review.

23.4 Draft recommendations: Following consideration of the information received pursuant to a review notice, as set out in Article 23.3, the Authority shall send its draft recommendations to the affected Licensees, and such other Persons as the Authority considers appropriate setting out:

23.4.1 the Authority’s conclusions on the Tariff review with such supporting reasons as it considers appropriate;

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23.4.2 specifying the changes to the Tariffs which the Authority intends to recommend to the Council of Ministers;

23.4.3 stating the date on which the Authority proposes that each of the relevant changes should come into effect;

23.4.4 specifying a period being not less than fifteen (15) Business Days within which affected Licensees and other notified Persons may comment on the Authority’s proposed recommendations,

and the Board shall consider any comments received prior to finalisation of its recommendations to the Council of Ministers in regard to the Tariffs to be collected by the Licensees from Consumers.

23.5 Considerations in relation to Tariff recommendations: The Authority may from time to time publish methodologies setting out its processes, practices and considerations in relation to the development of recommendations for Tariffs pursuant to this Article 23 and Article (9) of the Law. The matters that may be set out in the methodologies may include:

23.5.1 the policies on which the methodologies are based;

23.5.2 the methodology for calculation of Tariffs as may be specified, for categories of Electricity Activity or categories of Consumers;

23.5.3 any other matters the Authority considers relevant for the purposes of collation of relevant information or calculation of the Tariffs.

23.6 Implementation of Tariffs: Following approval of revised or new Tariffs by the Council of Ministers pursuant to Article (9) of the Law, the Authority shall notify the affected Licensees of such revised or new Tariffs including:

23.6.1 the steps to be taken to implement the revised or new Tariffs and to notify Consumers and other users of the Licensee’s electricity services affected;

23.6.2 (subject to the terms of the Tariffs approved by the Council of Ministers, a date (being not less than fifteen (15) Business Days from the date of the notice) on which the revised or new Tariffs shall take effect.

23.7 Agreement of Prices: Two Licensees, or a Licensee and a Large Consumer, may agree Price(s) for the provision of electricity services provided that any such agreement is

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notified to the Authority in advance and the Authority does not raise any objection to the agreement within twenty (20) Business Days of notification. Where the Authority raises an objection the parties may resubmit the agreement to take account of the objection or raise the matter as a dispute in accordance with Chapter Seven.

23.8 Monitoring of compliance: Subject to Article 23.3, The Authority shall monitor compliance with the Tariffs established pursuant to this Article and Article (9) of the Law, and may require the Licensee to provide such information as it requires to determine such compliance. Where the Authority determines that the Tariffs have not been complied with it:

23.8.1 shall require the Licensee to provide an explanation;

23.8.2 may make such adjustments to the Prices to be charged by the Licensee as to compensate for any over-recovery by the Licensee;

23.8.3 may take action for contravention by the Licensee in accordance with Part 2 of Chapter 7.

23.9 Reporting requirements: The Authority shall establish reporting requirements on relevant Licensees to allow calculation of the cost of provision of electricity services by such Licensees. Such information requirements shall include:

23.9.1 information on key performance indicators, as specified by the Authority from time to time, impacting on the cost of electricity service and on Tariffs;

23.9.2 information on the assets, profit and loss, revenues, costs, liabilities and reserves of each separately identified business conducted by the Licensee in each period as specified by the Authority.

Such information shall be submitted in such forms as may be made available from time to time by the Authority on its website and in accordance with such unified accounting system and criteria as is established by the Authority and as modified from time to time.

23.10 Information database for Tariffs: The Authority shall establish and regularly update a database of information to assist it in the preparation of Tariffs.

23.11 Pre-existing Tariffs: Any Tariff which on the date of these Implementing Regulations was in effect shall continue to be in effect until a new Tariff is determined pursuant to the provisions of the Law and this Article 23.

CHAPTER FIVE – COMPETITION AND ANTI-COMPETITIVE CONDUCT

CHAPTER FIVE – COMPETITION ANTI-COMPETITIVE CONDUCT

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ARTICLE 24 - ANTI-COMPETITIVE PRACTICES

24.1 No anti-competitive practices: Pursuant to Article (10.3) of the Law, no Licensee shall engage in a practice restricting or distorting competition in the Electricity Industry, or a part of it including the following:

24.1.1 arrangements involving a Licensee that directly or indirectly fix the prices or other terms or conditions of service in the Electricity Industry, or a part of it;

24.1.2 arrangements involving a Licensee that directly or indirectly determine which Person will win a contract or business opportunity in the Electricity Industry, or a part of it;

24.1.3 arrangements involving a Licensee to apportion, share or allocate electricity markets among themselves or other Licensees;

24.1.4 any other act or arrangement involving a Licensee that, in the Authority’s opinion, is likely to restrict or distort competition in the Electricity Industry.

24.2 No abuse of dominant position: Pursuant to Article (10) of the Law and subject to Article 24.4, Licensees which have a Dominant Position in the Electricity Industry, or any part of it, are prohibited from undertaking activities or actions that are an abuse of their Dominant Position. An abuse of a Dominant Position shall be any action or activity engaged in by a dominant Licensee that the Authority determines by Decision, to have the effect, or to be likely to have the effect, of materially restricting or distorting competition or influencing the fairness of a decision in the Electricity Industry, or any part of it.

24.3 Determination by Authority of abuse of dominance or anti-competitive practice: Subject to Article 24.4, the Authority may, on application by any Person, or on its own initiative, determine whether, in any case, the actions or activities of a dominant Licensee constitute an abuse of its Dominant Position, within the meaning of Article 24.2, or whether the actions or activities of any Licensee amount to an anti-competitive practice within the meaning of Article 24.1. The Authority shall give advance notice to directly and materially affected parties that a Decision is being considered pursuant to this Article 24.3 and shall offer an opportunity to such parties to comment on the relevant issues before the Decision is made. Without prejudice to Article (13) of the Law, a determination by the Authority under Article 24.3 shall be binding on all parties.

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24.4 Actions which are not abuse of dominance or anti-competitive: The Authority may issue a Decision clarifying that a specific action or activity is not an abuse of dominance, or an anti-competitive practice, as the case may be, under such circumstances as may be specified in the Decision. A Decision issued under this Article 24.4 shall specify the reasons for the Decision, which shall be consistent with the development of a competitive market-based Electricity Industry.

24.5 Registration of Agreements: Licensees shall register with the Authority agreements required to be registered pursuant to Article (10.2) of the Law within a period not exceeding twenty (20) Business Days of concluding these agreements. Agreements registered with the Authority shall be subject to the confidentiality provisions set out in Article 4.7. The Authority shall use the information obtained pursuant to this Article 24.5 solely for the purposes of determining whether to take any action pursuant to this Chapter Five.

ARTICLE 25 - REMEDIES FOR ANTI-COMPETITIVE PRACTICES

25.1 Authority powers to remedy: If the Authority determines that, in a particular case, or in a number of related or unrelated cases, the actions or activities of a Licensee constitute an abuse of its Dominant Position or an anti-competitive practice, within the meaning of the Law and these Implementing Regulations, the Authority may take one or more of the following actions:

25.1.1 issue a Decision requiring one or more Persons named in the Decision to take the following actions:

(a) to cease the actions or activities specified in the Decision, immediately or at such time prescribed in the Decision, and subject to such conditions prescribed in the Decision;

(b) to make specific changes in actions or activities specified in the Decision, as a means of eliminating or reducing the abusive or anti-competitive impact;

25.1.2 request that the Licensee involved in the abusive actions or activities or anti-competitive practices and the Persons affected by such actions, activities or practices meet to attempt to determine remedies to prevent or eliminate continuation of such actions, activities or practices, and, if necessary resolve any dispute pursuant to Chapter Seven;

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25.1.3 require the Licensee to provide periodic reports to the Authority to assist in determining whether the actions or activities are continuing and to determine their impact on the Electricity Industry or part of it;

25.1.4 refer the matter to the Committee under Chapter Seven with such recommended penalty for the Violation as the Authority considers appropriate;

25.1.5 issue a Decision (following consultations with the relevant Licensee or any other affected Persons as per Authority's assessment) permitting the actions or activities complained of, provided that the Licensee takes such further action as the Authority may specify and which the Authority considers to be an effective means of putting an end to the continuation of the abusive or anti-competitive action, activities or practices, such as abandoning the ownership of specified parts of Licensee's works or carrying out of specified parts of his business in a separate company with separate books of account.

ARTICLE 26 - MERGERS OR ACQUISITIONS

26.1 Requirements of the Law: Pursuant to Articles (10.5) and (10.6) of the Law, the Licensees shall:

26.1.1 obtain the Board's approval before undertaking any merger with or acquisition of a majority shares or assets of other Licensees;

26.1.2 inform the Authority of any initial agreement reached on a merger as described in Article 26.1.1;

26.1.3 obtain the Board's approval before purchasing five percent (5%) or more of the shares of another Licensee, or his securities, bonds or any other form of ownership rights or purchasing a lesser percentage that may create a Dominant Position in any part of the Electricity Industry.

26.2 Applications for approval: Licensees shall apply for approval of a proposed Merger or Acquisition under Article (10.5) and (10.6) of the Law by submitting an application (in such form as the Authority may from time to time require) which shall include detailed information on the proposed Merger or Acquisition or purchase transaction. Such information shall, at a minimum, include:

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26.2.1 identification of all Persons involved in the Merger or Acquisition or purchase transaction that have a greater than five per cent (5%) ownership interest or such lower percentage as the Authority may specify;

26.2.2 a description of the nature of the transaction and a summary of its commercial terms;

26.2.3 basic information on the Persons involved in the transaction, including their annual financial revenues from electricity markets, value of assets devoted to electricity business, the total capacity of generation, transmission or distribution owned, operated or Controlled by such Persons, the number of customers supplied (including quantity of electricity supplied) and copies of any published annual or quarterly financial reports; and

26.2.4 a description of the relevant parts of the Electricity Industry in which the Persons involved in the transaction operate.

26.3 Request for further information: The Authority may require further information to be provided relating to a transaction for which approval is sought and its implications for the Electricity Industry, including information on the following matters:

26.3.1 electricity related services provided by parties to the transaction, Consumers, suppliers, market shares, and financial performance;

26.3.2 activity of competitors and competitors’ market shares;

26.3.3 availability of alternative sources of electricity or electricity services in the relevant parts of the Electricity Industry;

26.3.4 the impact of the transaction on suppliers, competitors and Consumers in relation to the relevant Electricity Activity.

The Authority shall require the provision of such further information within such time period as is reasonable taking into account the complexity of the information to be provided and the difficulty of obtaining or preparing such information.

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26.4 Board decision on application: Within twenty (20) Business Days of receipt of a duly completed application under Article 26.2, including all further information as may be requested under Article 26.3, the Authority shall:

26.4.1 approve the transaction without conditions;

26.4.2 approve the transaction with such conditions as are reasonably related to promoting the development of open and competitive Electricity Industry, and maximizing the benefit for Consumers;

26.4.3 not approve the transaction and quote reasons.

26.5 Guidelines: The Board's Decision with respect to a Merger or Acquisition under Article (10.5) or (10.6) of the Law shall take into account the following guidelines:

26.5.1 a Merger or Acquisition shall be found to be likely to prevent or lessen competition substantially when the parties to the Merger or Acquisition would more likely be in a position to exercise a materially greater degree of market power in a substantial part of the relevant market in the Electricity Industry for five years or more than if the Merger or Acquisition did not proceed in whole or in part; and

26.5.2 Mergers or Acquisitions generally will not be challenged on the basis of concerns relating to the unilateral exercise of market power where the post-Merger or Acquisition share of the entity would be less than 25% or such percentage specified by a Decision of the Authority from time to time taking into account the transition period to a competitive Electricity Industry.

26.6 Considerations in applying guidelines: In applying the guidelines referred to in Article 26.5, the Authority shall consider whether in its view:

26.6.1 the Electricity Activity or a part thereof of a party to the proposed Merger or Acquisition has failed or is likely to fail;

26.6.2 acceptable alternative sources for the services provided by the parties to the proposed Merger or Acquisition are or are likely to be available;

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26.6.3 there are any barriers to entry by other Persons in the relevant market, including any effect of the proposed Merger or Acquisition on such barriers.

26.6.4 effective competition would remain in a relevant market in the Electricity Industry that would be affected by the proposed Merger or Acquisition;

26.6.5 there is a likelihood that the proposed Merger or Acquisition will or would result in the removal of a competitor;

26.6.6 the nature and extent of change and innovation in the relevant market in the Electricity Industry mitigates against other effects of the proposed Merger or Acquisition,

and any other factor that is relevant to competition in a market that would be affected by the proposed Merger or Acquisition.


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ARTICLE 27 - RESTRUCTURING OF THE ELECTRICITY INDUSTRY

27.1 Preparation of Electricity Industry restructuring plan: Pursuant to and in accordance with Article 11 of the Law, the Authority shall prepare the Electricity Industry restructuring plan, approved by the Board, consistent with such development plans as may be prepared by the Ministry under Article (3.2) of the Law and shall make such Electricity Industry restructuring plan available on its website. The Electricity Industry restructuring plan shall deal with the following areas:

27.1.1 unbundling the Electricity Activities that are licensable at the date the Law comes into effect and to:

(a) enhance generation of electricity and its transmission, distribution, supply and Trading;

(b) enhance Cogeneration and Trading of Cogeneration products;

(c) enhance private sector participation in legitimate competition in the Electricity Industry ;

(d) promote the orderly and timely introduction of legitimate competition and to curb abuse of any monopoly powers;

27.1.2 introduction of open and non-discriminatory access to any Licensee or Large Consumer for connections to and use of the Transmission System(s) and Distribution Systems, which could include steps for the creation of a separate transmission entity;

27.2 Steps for implementation of the Electricity Industry restructuring plan: The Electricity Industry restructuring plan shall detail the further actions to be taken to further liberalise the Electricity Industry, to increase private sector participation in the Electricity Industry, to reduce monopolies in the Electricity Industry and toward final introduction of a competitive electricity market, which actions may, subject to Article (12) of the Law, include:

27.2.1 details of firm actions to be taken and such further information as the Authority considers necessary for proper consideration of such firm actions;

27.2.2 details of further actions proposed to be taken and the dates by which the Authority anticipates conditions will be appropriate for such further actions to be taken;

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27.2.3 preparatory actions to be carried out by the Authority, or other Persons pursuant to Decisions of the Authority, to establish a state of readiness for further actions identified pursuant to Article 27.2.2 above, comprising:

(a) amendments to the legal and regulatory framework, including to the Law, Charter, the Implementing Regulations, Licences and key industry documents, identified as necessary to facilitate the firm and further actions identified under paragraphs 27.2.1 and 27.2.2 above;

(b) the overall timescales for the introduction of, and thereafter further development of, a competitive electricity market in accordance with Article (11.4) of the Law;

(c) such other matters as the Authority considers appropriate.

27.3 Consultation: Pursuant to Article 27.2, the Authority:

27.3.1 shall consult with such Persons as it considers appropriate prior to preparing and updating the Electricity Industry restructuring plan;

27.3.2 may require Persons involved in the Electricity Industry and public bodies to provide to it such information as it requires to carry out its functions in relation to the preparation or implementation of the Electricity Industry restructuring plan;

27.3.3 shall as part of a consultation under Article 27.3.1 indicate to any Licensee whether it intends to issue a direction or Decision requiring that Licensee to take steps in connection with the competitive electricity market and shall:

(a) give the Licensee such time as the Authority considers appropriate for considering such proposal and providing comments to the Authority;

(b) take the Licensee’s comments into account before issuing such a direction or Decision to that Licensee.

27.4 Monitoring of restructuring: The Authority shall continuously monitor progress in implementation of the Electricity Industry restructuring plan and shall, subject to

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Article (12) of the Law, issue such directions and Decisions as it considers appropriate to ensure compliance, including:

27.4.1 requirements to corporatize separate business units;

27.4.2 requirements to establish contractual arrangements to support the restructuring process;

27.4.3 the preparation of transfer schemes in relation to assets and liabilities;

27.4.4 the establishment of asset and employee registers and a process for allocation of these to separate business units mentioned above.

27.5 Establishment of a competitive electricity market: The Board shall take such steps pursuant to Article (11.4) of the Law and this Article (27) as it considers appropriate for the development of the Electricity Industry to the point where a competitive electricity market can be established. At such stage when the Board considers that a competitive electricity market may be established, the Board shall issue such directions and Decisions to Licensees as appropriate in connection with the implementation of the competitive electricity market, which may include:

27.5.1 proposals for amendments to Licences in accordance with these Implementing Regulations;

27.5.2 a requirement to implement codes and documents relating to the competitive electricity market;

27.5.3 a requirement to vary industry codes and documents to reflect changes necessary for the proper implementation and operation of the Electricity Market;

27.5.4 such other directions as the Board considers appropriate.

27.6 Protection of existing investments: The Authority shall, in taking actions pursuant to Article 27.5, take such steps as necessary to comply with the requirements to protect the rights of investors and developers under Article (12) of the Law. The protection of the rights of the investors and developers in projects in the Electricity Industry pursuant to Article (12) of the Law applies to the contractual rights of investors as existing at the date of the

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introduction of a competitive Electricity Market pursuant to Article 27.5. The protection afforded by Article (12) of the Law continues to apply until the earlier of the following:

27.6.1 the project electing, with the approval of the Authority, to participate in the competitive Electricity Market; (upon agreement of the relevant contractual parties),

27.6.2 expiry or termination of the contractual rights of investors and developers referred to above,

and the Authority may issue such further Decisions and directions as it considers necessary in relation to the participation of such projects in the competitive Electricity Market from the date set out in Article 27.6.1 or 27.6.2 above (as applicable).

CHAPTER SEVEN – DISPUTES AND VIOLATIONSPART 1 – DISPUTES & DISPUTE RESOLUTION PROCEDURES

PART 1 – DISPUTES & DISPUTE RESOLUTION PROCEDURES

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ARTICLE 28 - GENERAL

28.1 Disputes: Pursuant to the Law and in particular Articles (6.2), (13.2) and (15.2) thereof, disputes shall be dealt with as follows:

28.1.1 Consumer Disputes: disputes between a Consumer and a Licensee in relation to the application of Tariffs to such Consumer, electricity services provided by the Licensee to the Consumer or other activities impacting on the Consumer carried out by the Licensee pursuant to the Law, the Implementing Regulations, Rules and Procedures or its Licence:

(a) shall be dealt with under the processes established under Article 29;

(b) where not resolved under Article 29, may be referred to the Authority under Article 31;

(c) where a party wishes to appeal the determination of the Authority under Article 31, such party may refer the matter to the Committee in accordance with Article 31.

28.1.2 Electricity Industry Disputes: subject to the provisions on dispute resolution in any contractual agreement between the parties to the dispute, disputes between Licensees, or between a Licensee and a Large Consumer, relating to an Electricity Activity:

(a) may be dealt with under the processes established under Article 30;

(b) where not resolved under Article 30, may be referred to the Authority under Article 31;

(c) where a party wishes to appeal the determination of the Authority under Article 31, such party may refer the matter to the Committee in accordance with Article 31.

28.1.3 Disputes relating to Authority Decisions: disputes relating to Authority Decisions shall be dealt with as follows:

(a) any Person refused a Licence, or the renewal of a Licence, by the Authority may refer the matter to the Committee under Article 31;

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(b) a Decision of the Authority in relation to a custodianship action shall in accordance with Article (15.2) of the Law be referred to the Committee under Article 31;

(c) Decisions of the Authority determining disputes as described in Articles 28.1.1 and 28.1.2 shall be dealt with in the manner described under those Articles;

(d) Decisions of the Authority determining the existence of a Violation shall be referred to the Committee in accordance with Articles 31 and 34; and

(e) all other disputes relating to Decisions of the Authority shall not be referable to the Committee. However, with due regard to the Kingdom’s laws, the relevant Person may refer the issue for arbitration according to Article (13.8) of the Law.

28.1.4 Appeal from Disputes Resolution Committee determinations: In accordance with Article 13(4) of the Law, a Decision of the Committee may be appealed to the Board of Grievances within sixty (60) days from the date of its notification, and shall be final upon the expiration of such sixty (60) days unless so appealed.

28.2 Procedures for dispute resolution:

28.2.1 The Authority shall deal with all disputes that are submitted or referred to it in accordance with the dispute resolution methods set out in this Chapter Seven. The Authority may provide further rules, procedures, and provisions on its role in dispute resolution in Rules and Procedures.

28.2.2 The referral of disputes to the Committee as provided for in Article 28.1 shall be in accordance with, and within such timescales provided in, the rules and procedures of the Committee produced pursuant to Article (13.3) of the Law. For reference, the current rules and procedures of the Committee are set out in Annex 1.

28.3 Effectiveness of Authority Decisions pending appeal: In the case of a referral of a Decision of the Authority to the Committee or to the Board of Grievances as described in Article 28.1.3, the Decision of the Authority being appealed shall remain in effect pending resolution of the appeal, unless the Authority provides otherwise.

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ARTICLE 29 - CONSUMER DISPUTES

29.1 Licensee’s procedures: Each Licensee providing electricity or electricity services to Consumers shall prepare and submit to the Authority for approval a procedure for handling complaints from Consumers. Such procedure may provide for separate processes for different classes of Consumers. Such procedures shall specify:

29.1.1 the time periods within which Consumer complaints will be processed and responded to by the Licensee;

29.1.2 that any complaints or disputes not resolved under such procedures may be referred to the Authority;

29.1.3 the details of the Consumer care contact person at the Authority, as notified by the Authority to the Licensee from time to time.

29.2 Provision of Licensee’s procedures: The Licensee shall without charge provide a copy of procedures prepared pursuant to Article 29.1:

29.2.1 to any of its Consumers requesting a copy;

29.2.2 to a Consumer it intends to take any action against including termination of service, disconnection or action for non-payment;

29.2.3 to a consumer which has raised any complaint, in writing or otherwise, in connection with the services provided by the Licensee,

and where it has a website, shall make a copy of the procedures available on its website.

29.3 Consumer disputes referable to Authority: Disputes between a Licensee and a Consumer dealing with any of the following matters may be referred to the Authority in accordance with Article 31:

29.3.1 the access to, or quality of, electricity service provided or offered by the Licensee;

29.3.2 the financial obligations that the Licensee intends to impose or has imposed on the Consumer as a condition of obtaining or continuing to obtain service, including any disputed invoice;

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29.3.3. the refusal to make an offer of a connection or use of system agreement;

29.3.4 the disconnection or reconnection of electrical service by the Licensee;

29.3.5 the interpretation of a contract relating to an Electricity Activity between the Licensee and Consumer;

29.3.6 the interpretation of, or applicability of, any approved Tariff;

29.3.7 the treatment of the Consumer’s confidential information by the Licensee;

29.3.8 the Consumer failing to pay within the prescribed time payments due from the Consumer to the Licensee for the provision of services by the Licensee; or

29.3.9 any other matter that is within the jurisdiction of the Authority.

29.4 The Authority's Right to Investigate: Following a complaint, or of its own initiative, the Authority is empowered to investigate compliance by a Licensee with its obligations under the Law, the Implementing Regulations, Rules and Procedures or the Licence or to take enforcement action against a Licensee.

29.5 Actions pending resolution of a dispute: Licensee shall not disconnect or otherwise change any of the services then being provided to a Consumer during the time for which they are the subject of a dispute with that Consumer, without an interim or final determination from the Authority.

ARTICLE 30 - MEDIATION

30.1 Submission of dispute: Without prejudice to the Law, in relation to a dispute between Licensees, or between a Licensee and a Consumer, the parties to the dispute may submit a request for Mediation to the Authority. No request for Mediation may be made under this Article 30 until the parties to the dispute have negotiated in good faith for a minimum period of twenty (20) Business Days and have been unable to reach agreement.

30.2 Information in submission: One or more of the parties to the dispute shall submit the request for Mediation. The request shall set out the following information:

30.2.1 a statement that a dispute exists between the parties listed in the request;

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30.2.2 a signed statement from each of the parties to the dispute that they agree to submit the dispute to the Authority for mediation;

30.2.3 a statement of facts and issues upon which the parties agree;

30.2.4 a statement of facts and issues upon which the parties do not agree;

30.2.5 a statement from each party setting out its position on each disputed fact and issue;

30.2.6 a statement from each party setting out its position on the other party’s position on disputed facts and issues;

30.2.7 a statement setting out the dispute resolution approach sought from the Authority;

30.2.8 a statement setting out a proposed timetable for resolution of the dispute.

30.3 Response to submission: Within fifteen (15) Business Days of receipt of a request, the Authority shall advise the parties in writing whether it has:

30.3.1 agreed to proceed by way of Mediation;

30.3.2 accepted the proposed dispute resolution approach;

30.3.3 accepted the proposed timetable for resolution.

The Authority may refuse a request for Mediation. The Authority may approve a request for Mediation but not approve the proposed dispute resolution approach or timetable. The Authority in consultation with the parties shall propose an approach and timetable for Mediation as well as the method for compensating the Authority for its incurred expenses. In case of disagreement on the Mediation approach and timetable, the Authority may decide to refuse the request for Mediation.

30.4 Procedure for mediation: Where the Authority approves a request for Mediation and decides upon a Mediation approach and timetable, the Authority shall appoint a Person or Persons to conduct the Mediation and specify the procedure and the schedule to be followed. The procedure may include one or more of the following:

30.4.1. a process in which the Person or Persons appointed by the Authority mediates a mutually acceptable resolution of the dispute;

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30.4.2 a process in which the Person or Persons appointed by the Authority is/are mandated to request that the parties to the dispute submit ‘final offers’, and the mandate to select one of the final offers;

30.4.3 a process in which the Authority makes a Decision to resolve the dispute, with or without the steps set out in Article 30.4.1 and Article 30.4.2 or other procedures;

30.4.4 a requirement that the parties agree to be bound by the final agreed outcome of the Mediation.

30.5 Confidentiality: Information submitted to the Authority as part of a Mediation shall be treated as confidential in accordance with the provisions on confidentiality of information in Article 4.7.

ARTICLE 31 - DISPUTE RESOLUTION PROCESS BY THE AUTHORITY

31.1 Refusal to hear dispute: Where a dispute is referred to the Authority under this Article 31, the Authority may in its discretion notify the Person referring the dispute that it shall not hear the dispute, including the reasons for its such determination, which may include:

31.1.1 the dispute appears to the Authority to be frivolous or vexatious;

31.1.2 the dispute does not relate to a matter in respect of which the Authority may exercise its enforcement function pursuant to the Law or the Authority’s founding Charter;

31.1.3 other processes or powers are available that would be more suitable to deal with the matters in dispute;

31.1.4 in the case of a complaint by a Consumer, the Consumer has not taken such steps as appear to the Authority to be reasonable to give the relevant Licensee an opportunity to resolve the complaint; and

31.1.5 the matter complained of is substantially connected to a matter subject to an existing dispute before the Authority, the Committee, the Board of Grievances or any other competent authority in the Kingdom.

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Where the Authority refuses to hear a dispute, the relevant party may seek to refer the matter to the Committee in accordance with its rules and procedures as set out in (Annex 1).

31.2 Submission of information: Where the Authority does not give a notice pursuant to Article 31.1, the Authority shall establish, in each proceeding, the time limits for each party to the dispute to submit information to the Authority and shall notify these to the parties to the dispute. In establishing time limits, the Authority shall take into account:

31.2.1 the complexity of the information to be submitted; and

31.2.2 the ease with which the information can be obtained by the Person required to submit it.

The parties to the dispute shall provide information to the Authority in accordance with such time limits and shall admit all facts and issues set out in the original application for dispute resolution with which the respondent agrees. If a party does not file an answer within the time period established pursuant to this Article 31.2, the Authority may make a determination on the application on the basis of the information available to it and information provided to it by the other parties to the dispute.

31.3 Determination: Following expiry of the time limits for filing of information with the Authority:

31.3.1 no further documents may be submitted except by a request of the Authority;

31.3.2 the Authority may make a determination on the dispute on the basis of the written materials before it, or may require further information from one or both of the parties.

The Authority shall communicate its determination on the application to all parties to the dispute, promptly after the determination is made and shall indicate that the determination may be referred by the Authority at the request of one or more of the parties to the dispute to the Committee in accordance with, and subject to the timescales set out in, the procedures of the Committee as described in Article 31.4. References by the Authority under this Article 31.3 shall be accompanied by an explanatory memorandum in accordance with Article 32.

31.4 Disputes Resolution Committee procedures: The procedures of the Committee as at the date of these Implementing Regulations are set out in (Annex 1). Such procedures may be amended by the Board from time to time.

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31.5 Officers or employees with interest in proceedings: No officer or employee of the Authority who has any financial interest or other interest in the outcome of the proceedings may be involved in any determination of the Authority, and any such officer or employee shall not participate in the deliberations of the Authority.

31.6 Fees for dispute process: The Authority may require payment of a fee to be paid by any party to the dispute to the Authority in connection with the costs of investigation and resolution of the dispute by the Authority.

ARTICLE 32 - EXPLANATORY MEMORANDUM

32.1 Explanatory memorandum: The Authority shall provide an explanatory memorandum to the Committee with (or within a reasonable period following) each of the following circumstances:

32.1.1 where the Authority’s determination of a dispute is referred by the Authority pursuant to Article 31.3;

32.1.2 where the Authority’s Decision on a Violation is referred by the Authority pursuant to Article 28.1.3(d);

32.1.3 where the Authority’s Decision on refusal of a Licence, or the renewal of a Licence, is referred by the Authority pursuant to Article 28.1.3(a);

32.1.4 where the Authority’s Decision in relation to a custodianship action in accordance with Article (15.2) of the Law is referred by the Authority pursuant to Article 28.1.3(b).

32.2 The Authority’s explanatory memorandum to the Committee shall be submitted for the purposes of assisting the Committee and shall set out:

32.2.1 the facts relating to the dispute, Decision or Violation as determined by the Authority;

32.2.2 the reasons for the Authority’s findings in relation to the dispute, Decision or Violation (as the case may be);

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32.2.3 recommendations on any interim measures by the Committee pending final resolution by the Committee or, in the case of a further appeal, to the Board of Grievances;

32.2.4 in the case of a custodianship action, such further matters as are specified in the Custodianship Action Rules and Procedures set out in (Annex 2)as may be determined by the Board from time to time;

32.2.5 any other matters the Authority considers appropriate for the Committee to take into account.

CHAPTER SEVEN – DISPUTES AND VIOLATIONS PART 2 – ENFORCEMENT ACTION

PART 2 – ENFORCEMENT ACTION

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ARTICLE 33 - INTRODUCTION

33.1 This Part 2 sets out provisions relating to enforcement actions by the Authority to enforce the provisions of the Law, Charter, the Implementing Regulations and the Licences by, in summary:

33.1.1 taking action against such contraventions pursuant to Article 34;

33.1.2 determining the existence of a Violation and an appropriate sanction, subject to review by the Committee, pursuant to Article 34.4.3;

34.1.3 investigating alleged Violations pursuant to Article 35.

ARTICLE 34 - CONTRAVENTIONS

34.1 Monitoring of compliance: On its own initiative, or upon receiving a complaint from any Person, the Authority may, for the purposes of carrying out its duties and functions under the Law or the Charter, inquire into and investigate whether a Person (including a Licensee) is carrying out its obligations under the Law, the Implementing Regulations, Rules and Procedures, Decisions or the terms and conditions of any Licence held by such Person. The Authority may require any Person (including a Licensee) to provide such information it requires to determine whether a contravention has occurred, or is occurring, and where it considers appropriate may require such a Person to meet with the Authority to discuss the matter.

34.2 Notice of Invocation: The Authority may by notice to the concerned Person invoke the enforcement procedures in this Article 34. The notice invoking the procedures shall:

34.2.1 indicate the activity complained of and the relevant provisions of the Law, Implementing Regulations or Rules and Procedures or Licence prohibiting the activity;

34.2.2 indicate that the Authority proposes to make a Decision against the concerned Person under this Article 34, subject to consideration of any representations by that Person;

34.2.3 indicate whether in the Authority’s view there has also been a Violation, and any sanction the Authority proposes (subject to review by the Committee in

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accordance with the procedure set out for a reference by the Authority under Article 31 above) in relation to such a Violation, subject to consideration of any representations by that Person;

34.2.4 provide details of any proposed Decisions to order the Person to do anything the Person is required to do or forbid the Person from doing anything that the Person is prohibited from doing under or pursuant to the Law, or the Charter, these Implementing Regulations, the Rules and Procedures or any Licence held by such Person;

34.2.5 indicate a time period being not less than fifteen (15) Business Days within which such Person may make written representations to the Authority as to why such a Decision should not be made, or should be made in a form other than that proposed.

34.3 Final Decision: The Authority shall consider any representations received in accordance with Article 34.2 before making a final Decision. Where the Authority is satisfied that the Person is contravening or has contravened the Law, the Implementing Regulations, the Rules and Procedures, or its Licence, the Authority may by notice to the Person issue a final Decision requiring the Person to do, or not to do, such things for the purpose of rectifying the contravention within a specified period. The final Decision shall be effective five (5) Business Days from issue of the Decision, or such later date as may be specified in the notice.

34.4 Enforcement action: The Authority may take the following action as the Authority considers appropriate, taking into account the matters set out in Article 34.5, where by final Decision it finds there to have been a contravention of the Law, the Charter, these Implementing Regulations, the Rules and Procedures or a Licence:

34.4.1 issue a Decision to the contravening Person as it considers appropriate, which in the case of a Licensee may include amendment, suspension or revocation of the relevant Licence;

34.4.2 issue a Decision to other Licensees requiring them to take such steps in relation to their provision of electricity services to the contravening Person as the Authority considers appropriate;

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34.4.3 Refer the matter to the Committee requesting any of the following actions as may be appropriate:

(a) order the cessation of any Electricity Activity by the contravening Person;

(b) impose a penalty on the contravening Person where it determines that there has been a Violation and shall state the amount of the penalty imposed and specify a date, being not less than forty (40) Business Days from the date of the Decision, within which the Person is to pay the penalty to the Authority;

(c) where the Authority concludes that the Violations constituted an ongoing Violation or a series of repeated or related Violations, assess a penalty for:

(i) each day that the Violation continues after the date on which the Decision requires that it should cease; and

(ii) each separate Violation that occurs after the date on which the Decision requires that they should cease;

34.4.4 invoke the arrangements set out in Part 3.

34.5 Considerations: The matters to which the Authority shall have regard in considering the appropriate response to a contravention under Article 34.4 shall be as follows:

34.5.1 the Authority’s duties and objectives under the Law and the Charter;

34.5.2 the need to ensure and incentivize compliance with the Law, the Charter, Implementing Regulations, the Rules and Procedures and Licences;

34.5.3 the impact of the contravention on Consumers and the Electricity Industry;

34.5.4 whether the contravening Person achieved any gain, financial or otherwise, from the contravention;

34.5.5 whether the contravening Person has committed similar contraventions in the past;

34.5.6 the duration and seriousness of the contravention;

34.5.7 any mitigating or aggravating factors.

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34.6 Interim Decisions: The Authority may make any interim Decision it deems appropriate pending a final Decision on a matter being considered by it under this Article 34. Such interim Decisions may provide for steps to be taken to conserve the position of Persons affected by the matter under consideration until a final Decision is issued. The issue of an interim Decision shall be without prejudice to the rights and powers of the Authority in relation to the issue of a final Decision.

34.7 Non-compliance with interim or final Decision: Where a Person has failed to comply with an interim or final Decision, the Authority may seek the assistance of any other public authorities and take such further steps to enforce the Decision as it considers necessary and may also refer the matter to the Committee for further action.

34.8 Guidelines: The Authority may publish in Rules and Procedures further guidelines on the process or relevant considerations in relation to the exercise of its powers under this Article 34 and shall make such guidelines available on its website.

34.9 Publication of Decision: The notice of invocation and the contravention Decision shall be made available by the Authority in such manner as it considers appropriate, to draw the attention of other Persons affected or likely to be affected by the contravention.

ARTICLE 35 - INVESTIGATIONS OF VIOLATIONS

35.1 Initiation: The Authority may initiate an investigation where it believes there has been a Violation of the Law as described in Article (14) of the Law and shall conduct such an investigation in accordance with this Article 35.

35.2 Provision of information: For the purposes of an investigation under this Article 35, the Authority may require by notice in writing any Person to produce such information available to that Person which the Authority considers relevant to the investigation, within such time period as may be specified in the notice.

35.3 Failure to provide information: Where any information is not provided in accordance with a notice under Article 35.2, the Authority may:

35.3.1 require such Person to provide an explanation for the failure to provide the information;

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35.3.2 take such failure to provide information into account in any explanatory memorandum submitted to the Committee in relation to the alleged Violation.

35.4 Entry into premises: Any employee of the Authority authorized by name in writing by the Governor of the Authority in accordance with Article (13.7) of the Law (“Authorized Officer”) may enter such premises as are specified or described in the authorization in connection with a Violation investigation in accordance with the provisions of Articles 35.5 to 35.7.

35.5 Notice of proposed entry: The Authorized Officer shall, subject to Article 35.6, only be entitled to enter premises where he has given at least two (2) Business Days notice to the occupier of the premises indicating:

35.5.1 the proposed time of entry onto the premises;

35.5.2 the subject matter and purpose of the investigation;

35.5.3 the nature of the alleged Violation.

35.6 Exceptions to notice requirements: Article 35.5 shall not apply:

35.6.1 where the Authorized Officer has taken all reasonable steps to give notice but been unable to do so;

35.6.2 where the authorization by the Governor of the Authority under Article 35.4 provides that there are reasonable grounds for suspecting that if notice was given, documents or information required would be concealed, removed, tampered with or destroyed.

35.7 Duties and powers of Authorized Officer on entry: An Authorized Officer exercising a power of entry to premises shall identify himself by producing a copy of the authorization and an identification card or other official document. The Authorized Officer may:

35.7.1 be accompanied by such other Persons as he considers essential;

35.7.2 require any Person on the premises to produce any document or information he believes relevant to investigation and to assist in locating and identifying such document or information;

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35.7.3 take copies of any document or information;

35.7.4 take possession of such documents or information where it appears to him to be necessary to prevent interference with them or where it is not reasonably practicable to take copies.

The Authorized Officer shall not interfere with the premises more than is reasonably necessary to achieve the objectives of the investigation.

35.8 Obstruction on investigation: Where a Person hinders or obstructs an investigation under this Article 35 the Authority may refer the matter to the Committee for imposition of sanctions for such Violation.

CHAPTER SEVEN – DISPUTES AND VIOLATIONS PART 3 – URGENT ACTIONS

PART 3 – URGENT ACTIONS

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ARTICLE 36 - PROCUREMENT OF ADDITIONAL GENERATION CAPACITY

36.1 Where it appears to the Authority, on the basis of information provided to it by Licensees or otherwise, that there is insufficient generation or network capacity existing, under construction or planned to meet the projected demand for electricity at any time in the future, the Authority pursuant to Article (4.2) of the Law may direct an entity of its own choice (which may be the holder of a Transmission Licence) to invite tenders for such further capacity as, in its opinion, will meet any such projected shortfall in supply. The Authority shall take such measures to ensure there is adequate finance for the provision and use of any capacity tendered for or other measures it directs pursuant to this Article 36.

36.2 Where the directed entity conducts a tender under Article 36.1, it shall carry out the tender and select the successful bidder in accordance with the Authority’s direction and on the basis of criteria determined by the Authority for the purposes of such tenders.

ARTICLE 37 - CONTINUITY OF SERVICE

37.1 The Authority shall make necessary arrangements to ensure continuity of service to Consumers in the event of actual or anticipated failure to continue to carry out licensed Electricity Activities by Licensee. The Authority shall issue Decisions to such a Licensee for this purpose including, but not limited to, the following:

37.1.1 a Decision to take any necessary corrective actions to enable the Licensee to carry out the licensed Electricity Activity in the manner specified in its Licence;

37.1.2 an interim arrangement pending an undertaking that carries out the licensed Electricity Activity including appointing administrators, liquidators and (for the duration of the interim arrangement) additional directors;

37.1.3 a Decision to invoke the powers under Article (15.2) of the Law in accordance with Article 38 below and the Custodianship Action Rules and Procedures set out in( Annex 2)as may be amended from time to time .

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ARTICLE 38 - APPLICATION OF CUSTODIANSHIP ACTION

38.1 Pursuant to Article (15.2) of the Law, the Authority may, in urgent and necessary situations, and in accordance with the Custodianship Action Rules and Procedures stipulated in (Annex 2) and approved by the Board pursuant to Article (4.6) of the Law, apply the Custodianship Action Rules and Procedures on the activities of any Person who commits a Violation that necessitate such action.

38.2 The Custodianship Action Rules and Procedures may be amended by Decision of the Board from time to time.


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ARTICLE 39 - POWERS

The Governor shall exercise the functions and powers entrusted to the Authority in these Implementing Regulations with the exception of those specifically stipulated for the Board. The Governor may delegate any of these functions and powers to whomever he deems fit.

ARTICLE 40 - EFFECTIVE DATE OF THE IMPLEMENTING REGULATIONS

40.1 These Implementing Regulations shall come into effect on the date of their publication in the Official Gazette.

ARTICLE 41 - AMENDMENTS

41.1 The Authority shall review these Implementing Regulations and may by Decision of the Board update them from time to time to the extent relating to the Authority’s functions under the Law and the Authority’s Charter.

41.2 The Authority may consult with such Persons as it considers appropriate in relation to any proposed amendments to these Implementing Regulations.

The Authority shall publish Decisions to amend these Implementing Regulations in accordance with the approved procedures for the publishing of Rules, Regulations and Decisions. It shall also publish them on its official website.

ANNEX 1RULES AND PROCEDURES OF THE ELECTRICITY INDUSTRY DISPUTES RESOLUTION COMMITTEE

ANNEX 1

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RULES AND PROCEDURES OF THE ELECTRICITY INDUSTRY DISPUTES RESOLUTION COMMITTEE

ARTICLE 1

The Committee resolves cases arising out of the application of the Electricity Law, the Charter or their Implementing Regulations including cases between the Licensees and Consumers, cases raised against the Authority or those which the Authority files against violators of the Law , the Charter or their Implementing Regulations.

ARTICLE 2

The Committee elects from among its members its Vice-Chairman who shall act for the Chairman in his absence.

ARTICLE 3

A meeting of the Committee is properly constituted when a majority of its members are present, provided the Chairman or the Vice-Chairman is among the members present. The Committee meetings shall be convened at the Authority's headquarters or at any other place selected by the Committee.

ARTICLE 4

Rules pertaining to removal of judges set out under the law shall apply to members of the Committee.

ARTICLE 5

In addition to the rules set out in the Law, the Authority's Charter and their Implementing Regulations, the Committee shall apply procedures, scheduling and rules stipulated in the Judicial Proceedings Statute and the Penal Procedures Statute in all situations not specifically covered by the Rules and Procedures of the Committee.

ARTICLE 6

Claims shall be submitted directly to the Chairman of the Committee on the special form which is designed for that purpose.

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ARTICLE 7

Violations of the Law, the Authority's Charter or their Implementing Regulations shall be recorded and investigated by the relevant department in the Authority whose duties shall be:

7.1 to enter into legally licensed facilities, carry out investigations and review the books and records of the service providers or the Consumers, the related documents and all information and data necessary to uncover the violation and secure a copy of the same under a written and reasoned authorization issued by the Governor or a person authorized by him;

7.2 to prepare a report for each violation stating the name of the facility, description of the Violation, and all procedures taken during the investigation, duly signed by the person who performed the investigation;

7.3 to investigate any violation of the Law, the Authority's Charter or their Implementing Regulations as well as to investigate disputes referred to the Committee.

ARTICLE 8

The Governor may depute whomever he considers qualified either from among the employees of the Authority or from other persons not employed by it to undertake the functions of prosecution on behalf of the Authority against violators of the Law, the Authority's Charter or their Implementing Regulations. Such a person may also represent the Authority in law suits brought against it.

ARTICLE 9

An investigator shall submit to the Governor, on the second day following completion of the investigation, the findings of his investigation including evidences of culpability, and testimonies as well as his own views. Upon the Governor’s approval of the findings of the investigation and the procedures followed by the investigator, all the documents shall be referred to the Committee, together with the claim journal, by the person charged with this task.

ARTICLE 10

If the Committee receives a claim that does not fall under its jurisdiction, it shall dismiss that claim while stating the reasons for its decision.

ARTICLE 11

Until a case is finally adjudicated, the Committee may issue interim decisions in issues that are urgent, or that may become urgent during the proceedings.

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ARTICLE 12

The full Committee may proceed to inspect the site of a violation, or it may depute one of its members or whomever it selects to undertake the inspection.

ARTICLE 13

The Committee may bring into the dispute under its consideration whomever it wishes to include pursuant to the Judicial Proceedings Statute. Other parties may also intervene in the dispute prior to issuance of the Committee's Decision, if the Committee determines that such parties may have an interest in the case, provided that the other litigants are duly notified.

ARTICLE 14

The Committee may opt to obtain advice from professional experts or from the Authority's employees on issues under its consideration in accordance with the stipulated rules of the Judicial Proceedings Statute.

ARTICLE 15

The Committee, at its own initiative or at the request of one of the litigants, may call any witness and request government agencies and departments to provide documents related to the claim. ARTICLE 16

Proceedings of all hearings before the Committee shall be recorded and minutes taken. ARTICLE 17

The Committee may order remedy of a violation of the Law, the Authority's Charter or their Implementing Regulations and impose a penalty not exceeding the maximum limit prescribed by law; it may order revocation or termination of the contract, cancellation of the licence, or cessation of the activity for a limited period. It may also vacate, amend or endorse the Authority's decisions pertaining to the dispute. Furthermore, the Committee may order compensation for damages resulting from the Violation, and payment of lawyer’s charges and fees of experts and specialists that may be retained by the Committee, all in accordance with the rules set out in the Judicial Proceedings Statute. ARTICLE 18

Decisions of the Committee shall be taken by a majority of votes of its members. In the case of a tie, the side with which the Chairman casts his vote shall prevail. The record of the

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Committee's minutes shall reflect whether the decision was taken unanimously or by a majority of votes and the minority views shall also be recorded in the minutes. ARTICLE 19

Rules pertaining to the correction and interpretation of judgements as stipulated in the Judicial Proceedings Statute shall apply to the Committee's decisions. ARTICLE 20 In the absence of a rule or text in the statutes and regulations applicable to the Violation or the incident under its consideration, the Committee shall deduce its ruling from the principles of Islamic Jurisprudence (Sharia), common practices, and the principles of fairness. ARTICLE 21 21.1 The Committee shall look into the supervisory custodianship action imposed by the

Authority on the activity after its referral from the Authority within the legal period. The Committee may also look into the action at the request of the Licensee on whose activity the custodianship has been imposed, before referral of papers from the Authority in accordance with the Implementing Regulations of the Law.

21.2 Based on the request of the Licensee, the Committee may order removal of the custodianship imposed on him by the Authority. Such action by the Committee, however, does not abridge the Authority's right to prosecute the Violation.

21.3 If the Committee is satisfied with the Authority's reasons for imposition of the custodianship, it shall allow its continuation under a decision issued by the Committee which shall be appealable if the opposing side is dissatisfied.

21.4 In ordering the custodianship initially or in ordering the continuation of the supervisory

custodianship, the Committee shall adhere to the rules set out for the imposition of judicial custodianship stipulated in the Judicial Proceedings Statute.

ARTICLE 22

Decision of the Committee may be appealed before the Board of Grievances within sixty (60) days from the date of its notification to the party concerned, in accordance with the rules established in the Judicial Proceedings Statute.

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ARTICLE 23

A petition for review of the Committee's decision may be made pursuant to the rules and procedures stipulated in the Judicial Proceedings Statute provided sufficient justifications were made for the review. ARTICLE 24 With the exception of urgent decisions, the Committee decisions may not be implemented until they become final through either their acceptance by the parties to the dispute, the expiry of the period set out for making an appeal without submitting an appeal, or approval of the decision by the Board of Grievances . ARTICLE 25 An interested person, not a party to the litigation before the Committee, may object to the implementation of the decision, in accordance with the rules of the Judicial Proceedings Statute. ARTICLE 26

The Committee is empowered to approve arbitration documents for disputes within its jurisdiction pursuant to the Arbitration Law. ARTICLE 27

When the Committee decision becomes final, the Chairman of the Committee shall communicate it to the government agency concerned with the implementation of the judicial orders as well as to the Governor of the Authority. ARTICLE 28 The Governor of the Authority shall appoint the Secretariat of the Committee which shall consist of a Secretary and a number of employees who shall provide administrative and technical support for the work of the Committee. The following tasks are among the duties of the secretariat:

28.1 recording the minutes of the Committee meetings, organizing the meetings, and receiving visitors;

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28.2 coordinating with interested parties both inside and outside the Authority ;

28.3 providing typing services, keeping files and records of the Committee’s decisions and rulings of the Grievances Court;

28.4 the Secretary shall have the authority of directly communicating with administrative agencies and departments in matters assigned to him by the Chairman of the Committee.

ARTICLE 29 The Authority's Board of Directors shall provide a budget for the Committee within the Authority's budget, which includes remunerations of the Committee's members, expenses of its Secretariat, and such other expenses as may be required for the working of the Committee and the Secretariat, including expenses for expertise and investigations. ARTICLE 30 The monthly remuneration of the Committee members and its Chairman shall be determined by a decision of the Authority's Board of Directors. ARTICLE 31 The Committee shall publish annually a report listing the number of cases reviewed, the number of decisions issued, the average schedule of the Committee and such other data as may be necessary to achieve transparency. ARTICLE 32 The Committee shall publish each year the principles it adopted. ARTICLE 33

These by-laws shall be published in the Official Gazette and shall become effective thirty (30) days thereafter.

ANNEX 2 RULES AND PROCEDURES FOR APPLICATION OF CUSTODIANSHIP

ANNEX 2

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RULES AND PROCEDURES FOR APPLICATION OF CUSTODIANSHIP

1. INTRODUCTION

These Rules and Procedures for application of custodianship are issued pursuant to Article (4.6) and Article (15.2 ) of the Law. They shall be invoked for urgent and critical cases where the Authority exercises its powers according to Article (15.2) of the Law which empowers it to apply custodianship on the activity of any Person who commits a Violation .

2. EXPLANATIONS

2.1 A reference to an article is, unless the context otherwise requires, a reference to an article of these Rules and Procedures.

2.2 The definitions defined in the Law and its Implementing Regulations shall have the

same meaning in these Rules and Procedures, unless the context otherwise requires. 3. PRECONDITIONS FOR THE EXERCISE OF POWERS

3.1 The Authority has no right to exercise its powers stipulated in Article (15.2) of the Law unless the following conditions are achieved:

3.1.1. the powers shall be exercised against the activity of a Person against whom it is proved, according to a decision issued by the Authority pursuant to Article 34 of the Implementing Regulations, that he committed a violation ("affected Person");

3.1.2. the decision, mentioned in 3.1.1 above, is referred to the Committee immediately during a period not exceeding thirty (30) days from the date of issue;

3.1.3. that the Authority has studied the pertinent circumstances relating to the case and has reached to the conclusion that, in the framework of the case, it is necessary to activate the granted powers, pursuant to Article (15.2) of the Law, and that taking this course is the best option from the other powers and procedures available to the Authority to handle the case, or the creditors of the affected Person, according to the intervention arrangements agreed upon between them;

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3.1.4. if the affected Person is a Licensee, and the Authority deems that cancellation or suspension of his license is a proper punishment for such violation, this condition shall apply, in (but is not limited to) the following situations:

a. where the Licensee was a Network Licensee and was intending to

cease his Electricity Activity relating to transmission or distribution, as per the case;

b. where the Licensee was a Network Licensee and his performance

was deteriorating substantially, or he was unable to adhere to the performance standards adopted according to his License;

c. that the Licensee was deliberately failing to adhere to his obligations

as per the Law, its Implementing Regulations or License;

d. that the Licensee was deliberate in providing the Authority with incorrect or distorted information which the Licensee perceived (or should perceive);

e. that implementation of Licensee's bankruptcy procedures have started or are about to start;

f. where the financial position of the Licensee renders him unable to meet his full responsibilities pursuant to the Law, its Implementing Regulations or License, and the exercise of Authority's powers, pursuant to Article (15.2) may help the Licensee in continuing his adherence to those obligations;

g. where Violation of any prerequisite on the part of the Licensee may clearly endanger License cancellation;

h. where the Licensee was a Generation or Cogeneration Licensee, and was intending to cease all or a major part of his production activities, and this cessation would have affected the security of supply and safety of the electricity network in the Kingdom;

3.1.5. where the Affected Person was a person other than the Licensee, and the Authority

perceived that cessation of Electricity Activity to that Person, or its suspension, was a reasonable penalty for the Violation;

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3.1.6. that the cessation or cancellation or suspension of Electricity Activity or Licence, from the Authority's viewpoint, may have tangible effect on the public interest or on the supply of electricity supply to the Consumers in the Kingdom or any part of it, or may have tangible effect on the safety of the electricity system or equipment or any Person;

3.1.7. that the Authority, according to a written decision, appointed a Person or Persons

("Temporary Operator") for implementing the arrangements stipulated in the Decision, and what changes take place from time to time according to another future Decision ("Decision to apply Custodianship").

4. NOTICE

4.1. The Affected Person should be notified, in writing, of the Custodianship Application

Decision, outlining:

4.1.1. that the decision has been taken pursuant to Article (15.2) of the Law; 4.1.2. the effective date for the implementation of the arrangements to be applied

according to the decision which shall not be less than five (5) working days from the date of notice;

4.1.3. the information or assistance to be presented by the recipient of the notice to the

Temporary Operator (before the validity date of the decision and later) to facilitate implementation of arrangements contained in the Decision;

4.2. other Persons should be notified of the Custodianship Application Decision, in a

manner the Authority thinks proper, taking into account the directives relating to publishing decisions informing other Affected Persons of the Decision.

5. DUTIES OF THE INTERIM OPERATOR AND HIS POWERS 5.1. The Temporary Operator shall adhere to the frame of administrative arrangements

stated in the Custodianship Application Decision and any amendments made to it from time to time, and assume its duties according to the following:

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5.1.1. take possession of the assets of the Affected Person, and if the Affected Person is a corporate entity, appoint who may run the administration including specific persons from the Affected Person’s personnel;

5.1.2. operate the assets of the Affected Person in a manner which ensures continuity

of the Electricity Activity, guaranty safety of electrical systems and their security, and realize any other objectives specified in the Custodianship Application Decision;

5.1.3. implement Electricity Activities beneficial to the Affected Person and on his

account, and the Affected Person shall bear the expenses and risks;

5.1.4. transfer the net income to the Affected Person after deducting costs and expenses for arrangements implemented pursuant to the Custodianship Application Decision.

6. DUTIES OF THE NOTIFIED PERSONS 6.1. No Person, who is notified of the intention of the Authority for exercising the

application of custodianship, or notified of the effective Custodianship Application Decision, shall undertake any of the following procedures without the prior written permission of the Authority:

6.1.1. exercise, or attempt to exercise, any right available to him to terminate or cease

any contract necessary for the performance of Electricity Activities pertaining to the Affected Person;

6.1.2. undertake any administrative, liquidatory or insolvency procedures. He shall

strictly adhere to Authority's Decisions and reasonable directives issued by the Interim Operator during the period of validity of the Custodianship Decision related to the Affected Person.

7. REFERRAL TO THE DISPUTES RESOLUTION COMMITTEE 7.1. The Authority shall submit to the Committee, within thirty (30) days of the date of

issue, a copy of the Custodianship Application Decision, along with an explanatory memorandum stating:

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7.1.1 details of the relevant Violation and reasons for taking the Decision; 7.1.2 expected impacts on the Affected Person, Electricity Industry and the

Consumers from the implementation or non-implementation of the arrangements proposed pursuant to Article (15.2) of the Law;

7.1.3 details of other options available to the Authority and reasons for their

unsuitability; 7.1.4 expected period of the arrangements; 7.1.5 any other information the Authority may think pertinent to the case in

question.

7.2 The disputes shall be dealt with in accordance with Chapter 7 of the Implementing Regulations and Committee's Rules and Procedures .

8. TERMINATION OF ARRANGEMENTS

8.1. Following issue of Custodianship Application Decision, the Authority shall monitor whether or not the circumstances which prompted the issuance of the Custodianship Application Decision are still present. The Custodianship Application Decision shall remain effective from the date of its implementation pending any of the following:

8.1.1 Date and time specified in a written Decision from the Governor terminating

the arrangements, where the Authority is satisfied that the circumstances leading to the issue of the original Decision no longer prevail;

8.1.2 a resolution by the Disputes Resolution Committee, pursuant to Article 7.1 above and Article (15.2) of the Law encompassing the judgment:

(a) necessity for the termination of the arrangements, or

(b) change of arrangements with other arrangements as stipulated in the judgment.

8.2 If the judgment of the Committee obligates change of arrangements implemented pursuant to the Custodianship Application Decision, the Authority may implement those changes pursuant to the provisions of the Law and its objectives.

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