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Industries have watched their electricity bills skyrocket, yet they’re not seeing a sufficient increase in power supply! They’re witnessing what they call a grinding “bazaar” that has unfolded since the introduction of the new billing system and the installation of smart meters. Invoices crisscross, accumulate, multiply…
Is Électricité du Liban (EDL) employing whimsical calculations for issuing electricity bills to industries? Many industrialists who continuously receive astronomical bills, despite electricity being distributed to them sparingly, tend to think so.
These individuals lament that the bills lack any physical meter readings. Numerous factories have transitioned to smart meters, rendering them unable to monitor their consumption, as kilowatt-hours are electronically recorded and data is transmitted remotely to EDL.
Outraged, a factory owner exclaimed, “Merely 140 hours of electricity consumed over two months, yet I’m faced with a $21,000 bill.” Eventually, he opted to disconnect from the EDL meter “due to the exorbitant cost of state-provided electricity.”
Following his example, many industrialists have either disconnected from the public power grid at the meter level or completely eliminated it. They prefer using solar energy and generators, which are much cheaper, to power their machinery. This transition to private electricity production undoubtedly represents a substantial loss for the public electricity provider.
Estimates
Carlo Ayoub, one of the owners of Ayoub Industries, is categorical. Speaking to This is Beirut (TIB), he states, “It is wiser to refrain from relying on state-supplied electricity,” and it is “significantly more cost-effective to run generators and to benefit from solar energy, both of which we can control.” He adds, “Bills can vary significantly, yet our consumption remains relatively constant. Furthermore, they accrue with monthly distribution, causing disruption to a company’s budget.”
Another industrialist, T.A., denounces the “whimsical” nature of bills. “It seems that the public electricity provider relies on old consumption data to generate new bills. However, consumption has changed, and the hours of provided electricity have decreased. This lacks verification, as both our electricity usage and production have significantly shifted since the crisis that began in 2019,” he asserts.
However, he hasn’t refrained from using public electricity. Instead, he endeavors to manage his electricity consumption as effectively as possible to minimize his electricity costs.
Drawing on extensive experience in Lebanon, he notes that “It is better to have many options, thus to have access to all energy sources.” “Sometimes, EDL’s electricity is cheaper, while other times it is the generators. As for solar energy, he describes it as “aleatory,” highlighting the challenge of operating an industrial facility during cloudy weather. “It remains a backup resource,” he concludes.
Farid Kamel, CEO of Kameltan.com, is one of those who consider that “industrialists are negatively affected by state-provided energy.” He runs his factory with 75% solar energy and the remaining 25% with generators, which are less expensive than electricity from EDL.
Kamel notes that due to economic policies burdening industrialists with high taxes, many have eventually left Lebanon and settled in countries like Egypt, Ivory Coast, Senegal, Nigeria, Ghana, and Turkey. He sees this exodus as “a loss of income for the State, which should have supported the Lebanese industry amidst the crises.”
Industrialists could have managed EDL’s bills if public electricity had been constantly available. However, they are now forced to pay two excessively high bills just to sustain production. The electricity sector has been problematic for years in a country plagued by corruption. As a result, the production system and the network as a whole have deteriorated over time, with no resolution in sight.
The debt of EDL alone represents nearly one-third, if not more, of Lebanon’s debt.
According to data from Lebanon’s Central Bank (BDL), the public electricity provider has burdened public finances with approximately $45 billion in costs since 1993. These figures align with estimates from the World Bank, indicating that around 46% of Lebanon’s accumulated public debt since 1992 (totaling over $100 billion) can be traced to transfers from the Treasury to EDL. It is noteworthy that no new power plants have been constructed, nor has any modernization work been undertaken during this period.
A Fixed Rate Reduced By 52%
Amidst the industrialists’ outcry, EDL is adamant and asserts that public electricity remains the cheapest option. Speaking to This is Beirut, the management reveals that with the new pricing, fixed rates for industrial customers have been reduced by 52%. They explained that while each kWh costs 27 cents, “it is essential to consider the number of amps as well.”
The management insists that the bills accurately represent consumption and reiterates that the additional 10 cents, applied to the first 100 kWh, cannot be deleted as it serves as a subsidy for households in the lower and middle classes.
Caretaker Minister of Energy, Walid Fayad, assures This is Beirut that “with the support of the ministry, EDL is collaborating with industrialists to ensure that their bills reflect the average price necessary for cost recovery.” According to him, this will be achieved through a combination of two measures. “The first involves subscription size (amperage), which is tailored to meet the needs and consumption levels, ensuring that the fixed portion of the monthly bill does not disproportionately exceed the variable portion. The second measure involves studying subscription patterns to ensure that the average bill per kWh does not surpass the cost recovery requirement,” he further says.
However, the process is likely to be time-consuming, while industrialists are grappling with cost reduction efforts. In the absence of supportive policies, they face the dilemma of either leaving or disconnecting their meters.
