The government has referred to Parliament a landmark piece of legislation aimed at overhauling Bahrain’s electricity and water sector.
The new 88-article Electricity and Water Sector Regulation Law is set to dissolve the existing Electricity and Water Authority (EWA) and replace it with Electricity and Water Regulatory Authority (EWRA), while also creating a National Electricity and Water Company (NEWC) to manage the operations.
Key components of the law include:
1. Establishment of a new regulatory framework: The EWRA will be a public body with legal standing and full financial and administrative independence. It will report to the relevant minister and have exclusive powers to regulate all electricity and water activities in Bahrain, including licensing, tariffs, performance monitoring, environmental compliance, and the promotion of competition and consumer protection in the sector.
2. Dissolution of the EWA: All the assets, liabilities, contracts and obligations of the authority will be transferred to the NEWC, which will operate under EWRA’s regulatory oversight.
3. Formation of the NEWC: The company will assume the operational responsibilities of electricity and water production, transmission, distribution and supply. It will also be responsible for a transition plan to ensure a smooth transfer of operations from the EWA, in accordance with the directives of the EWRA.
The new company will consist of at least four specialised business units focused on:
* Procurement of electricity and water;
* Transmission and distribution of electricity;
* Transmission and distribution of water; and
* Direct supply to consumers.
The law introduces a comprehensive licensing regime for all operators involved in electricity and water-related activities, including production (electricity and water generation, energy and water storage, importation); networks (transmission, distribution, interconnection, bulk supply); supply (delivery to consumers); procurement (centralised purchasing); and sub-activities (installation, operation, and testing of related equipment).
Entities currently operating in the sector must apply for appropriate licences within six months of the law coming into effect, with a possible six-month extension. Failure to comply may result in licence cancellation or modification.
Under the law, the EWRA will be mandated to ensure continuous, safe, and high-quality supply of electricity and water; regulate and review tariffs based on cost-recovery principles; enforce health, safety, environmental, and cybersecurity standards; and promote energy efficiency and sustainability, including the development of the energy services sector.
The law sets out strict penalties for unauthorised consumption, fraudulent activity, and obstruction of regulatory functions.
Unlawful consumption or theft of electricity and/or water will lead to imprisonment for not less than three months, or a fine of between BD500 and BD5,000, or both.
Repeat violations will be punishable by a jail term of not less than six months, or a fine of between BD1,000 and BD10,000, or both.
In either case, the offender will be liable to pay the actual cost of the stolen electricity or water and the cost of correcting the violation.
Reconciliation is allowed before a final court judgment, upon payment of the minimum fine and all associated costs.
Violations related to licensing and regulatory compliance include practising regulated activities without a licence, providing false or misleading information, obstructing investigations, and violating rules affecting competition or consumer interests.
Penalties for these violations include fines and possible imprisonment depending on the severity and repetition.
The obstruction of authority officials will attract imprisonment for up to one month, or a fine of up to BD1,000, or both.
Companies found guilty of violations can be fined up to double the maximum fine applicable to individuals.
Fines collected will go to the EWRA while compensation costs will go to the operator to cover expenses for providing the service.
Employees of the dissolved EWA will be transferred to the NEWC or other government entities while retaining all employment rights and benefits. The pension rights of the transferred staff will be protected.
The law will come into effect the day following its publication in the Official Gazette, subject to the approval by Parliament.
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