Abu Dhabi’s new electricity bills

Abu Dhabi’s new electricity bills

From this January, Abu Dhabi residents will be told the exact amount the government subsidizes in every electricity bill. Kipp wonders how effective the new move will be.

November 25, 2010 2:55 by shafeer

In an attempt to raise awareness amongst residents, come January water and electricity bills in Abu Dhabi will now specify how much of each bill is subsidized by the government.

Currently, when it comes to water and electricity bills, the Abu Dhabi government subsidizes 86 percent of UAE national’s bills and 50 percent of expats bills. Some say the move could be possible preparation for increased electricity rates.

Christian von Tschirschky, a regional utilities expert with the management consultancy AT Kearney told the National, “building awareness around real costs can increase the readiness of the people to prepare for higher prices which are closer to the real cost.”

Others say the new bills are an attempt to make consumers more conscientious about energy usage. Gulf News reports “Revealing these numbers is important as it ensures transparency with regards to the system. In addition, it comes as an eye-opener (…) Hence, this approach will hopefully encourage consumers to be conscious of the scarcity of these resources and follow best practice in preserving them.”

Kipp finds itself wondering how effective detailing subsidized amounts on bills will really be. After all, many residents in Dubai, (the less generous energy subsidizing Emirate) consciously sign off large electricity checks every month without altering their energy consumption habits. It’s more likely, then, that is preparation for a rise in bills. Not welcome for the consumer, obviously, but be realistic: how long can Abu Dhabi pay half of everyone’s energy bill?

In terms of habit changing, it will surely take more to change the mindset of energy consumption among the wealthy and relatively wealthy. Consider the case of Mukesh Ambani’s new 27 storey home in Mumbai, which cost $1 billion to build. The cost of electricity for the Antilla (the name of his house) sets Ambani back Rs 7 million (approx Dh.570,000) every month. Even if the Indian government subsidized his bills (which they’d probably never would) he’d still have to pay Rs 3.5 million. But does he care? No, because he can afford it.

What would make you more conscientious about your power use?