Article 5 of the Saudi Electricity Law
المادة 5 من نظام الكهرباء · الفصل الثالث: الإطار التنظيمي للرخصة
The article bans any electricity activity without a license or exemption, requires the Authority to decide within 30 working days, bars assigning a license without permission, and requires licensees to compensate those harmed.
Official text (Arabic)
This article has not been amended since the law was issued.
1- تتولى الهيئة إعداد إطار هيكلي للرخصة وإصدارها، وجميع ما يتعلق بها.
2- لا يجوز القيام بأي نشاط كهربائي إلا بعد الحصول على الرخصة.
3- استثناءً من الفقرة (2) من هذه المادة، يجوز للهيئة إصدار إعفاء لمزاولة بعض الأنشطة الكهربائية بحسب ما تحدده اللوائح.
4- تقدم طلبات الحصول على الرخصة للهيئة، وعليها إصدار الرخصة خلال مدة لا تتجاوز (30) ثلاثين يوم عمل من تاريخ اكتمال الطلب متى توافرت شروط إصدار الرخصة، وفي حالة رفض الطلب يجب أن يكون القرار مسبباً، ويحق لمن رفض طلبه أو مضى (30) ثلاثون يوم عمل من تاريخ اكتمال طلبه دون البت فيه التظلم أمام المحكمة الإدارية وفقاً للإجراءات النظامية.
5- لا يجوز للمرخص له -قبل الحصول على إذن مكتوب من الهيئة- التنازل عن رخصته، أو نقل ملكية الأصول المرخص لها، سواء عن طريق البيع أو الرهن أو أي طريق آخر. وتضع الهيئة الشروط الخاصة بذلك، على ألا يترتب على أي من هذه التصرفات إخلال بأداء نشاط الكهرباء.
6- إذا تعذر على المرخص له القيام بالنشاط المرخص له به، فعلى الهيئة اتخاذ الترتيبات اللازمة لضمان استمرار تقديم الخدمة، وذلك بناءً على القواعد والإجراءات التي تحددها اللوائح.
7- يعوض المرخص له المتضررين في حال تقصيره في تقديم الخدمة لهم، وتتضمن اللوائح المعايير والشروط المتعلقة بذلك.
8- تقوم الهيئة بالرقابة والتفتيش في سبيل تنفيذ مهماتها التنظيمية وفقاً للفقرة (6) من المادة (التاسعة عشرة) من النظام.
This is the official Arabic wording, the only legally binding version. We do not translate the law itself; the explanation below is ours. Official source: Bureau of Experts at the Council of Ministers
Article 5 explained in plain English
This is one of the most important articles of the Electricity Law for investors. It governs the license from issuance to transfer:
- Jurisdiction: the Authority prepares the structural framework for the license, issues it, and handles everything related to it.
- The prohibition: no electricity activity may be carried out until a license has been obtained.
- Exemption: as an exception, the Authority may issue an exemption to carry out certain activities, as the regulations specify.
- Time to decide and grievance: applications are submitted to the Authority, which must issue the license within no more than 30 working days from the date the application is complete, provided the conditions are met. A decision to reject must be reasoned. An applicant whose application is rejected, or on whose complete application no decision is made within 30 working days, may file a grievance before the Administrative Court in accordance with the legal procedures.
- Disposing of the license and assets: before obtaining the Authority's written permission, a licensee may not assign its license or transfer ownership of the licensed assets by sale, mortgage or any other means. The Authority sets the conditions, provided the disposal does not affect the performance of the activity.
- Continuity of service: if the licensee is unable to carry out its activity, the Authority must make the arrangements needed to keep the service running in accordance with the regulations.
- Compensation: the licensee compensates those harmed if it falls short in providing them with the service, and the regulations contain the criteria and conditions.
- Supervision: the Authority carries out supervision and inspection in accordance with paragraph (6) of Article 19, which assigns the detection, investigation and recording of violations to inspectors designated by decision of the Governor. They may examine the violator's books and records and obtain copies of the relevant documents.
Anyone whose license application is rejected or delayed is well advised to consult a lawyer who specializes in administrative cases to calculate the time limit for a grievance and prepare it.
Practical example
A company in Dammam applied for a license to generate electricity from solar energy, and its application was complete. 30 working days passed from the date the application was complete without the Authority deciding on it, so the company may file a grievance before the Administrative Court in accordance with the legal procedures.
Translated from our Arabic explanation with machine assistance. For guidance only; it does not replace advice from a lawyer on your situation.
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Frequently asked questions about Article 5 of the Saudi Electricity Law
How long does it take to issue an electricity activity license?
The Authority must issue the license within no more than 30 working days from the date the application is complete, provided the conditions for issuing it are met.
What can I do if the Authority rejects my license application?
A decision to reject must be reasoned, and an applicant whose application is rejected may file a grievance before the Administrative Court in accordance with the legal procedures.
Am I entitled to compensation if the electricity company falls short in its service?
The article provides that the licensee compensates those harmed if it falls short in providing the service to them, and the regulations contain the criteria and conditions.
Can a licensed power plant be sold?
A licensee may not transfer ownership of the licensed assets by sale, mortgage or otherwise before obtaining the Authority's written permission.
Articles this article refers to
The texts are reproduced from the official website of the Bureau of Experts at the Council of Ministers for reference; where they differ, the officially published Arabic text prevails. This content is not legal advice.