Empower, one of the biggest district cooling companies in Dubai, has denied raising charges for its customers after dramatically increasing revenues last year.
Empower says bigger bills not its fault
Empower, one of the biggest district cooling companies in Dubai, has denied raising charges for its customers after its revenue increased dramatically last year.
The utility instead blamed increased water and electricity costs, which it says it passed on to consumers, resulting in higher bills for a number of Dubai residents.
Empower's profitrose 25 per cent last year to Dh162 million (US$44.1m) on the back of a 40 per cent increase in revenue to Dh670m.
Its customer base last year increased 20 per cent and the number of new buildings served by the company was up 12 per cent.
The company's customers have become increasingly vocal in the past year about higher prices and a complicated charging structure that they say does not reflect a consumer's rate of consumption.
As a result, Empower launched an awareness campaign in October to improve transparency about its charges. Ahmed bin Shafar, the chief executive of Empower, said an increase in consumer demand and a backlog of customers connecting to the district cooling network were responsible for lifting revenue by such a large amount.
"We have maintained a demand cost of Dh750 and will keep this at a fixed rate," he said. "I think [we have] the best rate in the market."
He said the company had also maintained the rate it charged customers for consumption - 0.568 fils per hour.
Empower breaks its charges down into a consumption charge, a demand charge per quarter, a fuel charge and a charge for meter maintenance.
The demand charge is levied by Empower for providing the cooling service on an annual basis, but it is billed quarterly.
Last year, consumers called for one charge to solely reflect the rate of consumption.
Mr bin Shafar said he would "happily" give customers this option but that the charge per hour would probably increase from 0.568 fils to about Dh1.20, so he could continue to pay back the costs of investing in the district cooling plants and infrastructure.
"I would increase the rate tomorrow. I would collect my cash quicker," he said.
Rima Armstrong, a resident in Jumeirah Beach Residence (JBR), which is one of the major developments that Empower supplies, said she would prefer to be billed solely on the basis of consumption. Her bills had "definitely gone up in the past few years", she said. "But I don't know by what per cent.
"My Empower and Dewa [Dubai Electricity and Water Authority] bills are ridiculous, though."
Some customers in JBR complained last year that bills had risen fivefold in the previous four years.
"It can't be right that a bill can increase from Dh200 four years ago to Dh1,000 a month now," Hamid Hamri told The National in November about his charges in JBR.
Ms Armstrong said the demand charge was usually about Dh1,000 every three months. "Nothing is transparent. If I could see where my money was going, I would have a better understanding about forking out the money every month," she said.
Mr bin Shafar said that if JBR residents added up their cooling bills and Dewa bills in a year, the total would be 15 to 25 per cent lower than for an "older house" in Dubai.
Empower provided cooling to more than 17,500 customers last year, up from 14,663 in 2010. It serves 295 buildings in Dubai, up from 263 a year earlier.
The company is looking to build two district cooling plants in the Business Bay area of Dubai by 2014, increasing production capacity by 20 per cent.
Mr bin Shafar said "the only way forward" for the district cooling industry in Dubai was to consolidate and agree a uniform pricing structure with other companies.
He said Empower had Dh570m of loans outstanding to banks, having paid back Dh370m last year. The company had Dh150m of debt maturing this year and hoped to borrow a further Dh500m for expansion.