The Abu Dhabi water and electricity sector is structured on a “single buyer” model, where all production capacity (power or water) is purchased centrally by the Abu Dhabi Water and Electricity Company (ADWEC). Water and electricity are then sold to distribution and supply companies via an annually adjusted bulk supply tariff (BST) for onward sale to the final customers. The two distribution companies (AADC and ADDC) also pay the Abu Dhabi Transmission and Despatch Company (TRANSCO) the transmission use of system (TUoS) tariffs for using its transmission system to transport water and electricity from production plants to the distribution systems.
The Abu Dhabi Sewerage Services Company (ADSSC) collects, treats and disposes of the wastewater received from the customers.
Except for the sale of water and electricity to the final customers, all transactions in the water and electricity sector are carried out on an economic basis reflecting the true costs and do not involve any subsidy.
The single buyer, transmission, distribution, supply and wastewater network companies are monopolies in their service or business areas so are regulated economically via price control reviews.
Both the BST and TUoS charges are approved annually by
the Bureau. These charges are designed to ensure that both ADWEC and TRANSCO
receive revenues determined by the price controls. In the case of AADC, ADDC
and ADSSC, any shortfall in revenues is determined by the price controls, which
is the difference in the customer tariffs and the Government subsidy.