Jdeideh generator price war sparks local power struggle

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A local row between generator owners in a Mount Lebanon town has led to a price war and a struggle for power, residents of the area have told The Daily Star.

An electricity generator owner in Jdeideh, east of Beirut, sparked the battle after offering hefty discounts on subscriptions to attract new customers and boost his share of the market. Posters festooning the locality advertise monthly fees for unlimited power generator consumption for six months at just LL 10,000 ($6.70). This is significantly below market rates in many areas and the government’s – albeit rarely followed – recommended generator rates for July this year of LL202 ($0.13) per hour of generator use for 5 amperes. With a monthly average of 253 hours of power cuts across the country, according to the monthly Energy Ministry generator price advisory, a recommended monthly bill would come to LL 51,106 ($33.92).

No meters are installed to monitor the subscriber households’ use of electricity, and the LL10,000 fee is a fraction of the average price. The Jdeideh generator owners’ cut-price deal came after a new generator owner entered the local market, offering prospective customers a special bargain of $1 per amp per month.

According to several local residents, who did not wish to be identified, the competition between the two owners culminated in a street brawl between their employees in early July that was broken up by local municipal police. But both are still in business, with their street battle still being fought through customer acquisition and pricing.

With frequent cuts, especially in summer, electricity generator subscriptions are considered a basic necessity for most Lebanese. The Bekaa Valley’s Zahle and its suburbs are an exception to this, as the local electricity company – Electricite de Zahle – provides 24/7 power. In Jdeideh, electricity cuts range between 12 and 16 hours per day but daylong outages are common. The town is heavily populated and has poor infrastructure, and the the state-owned Electricite du Liban is unable to meet the demand for electricity.

Other residents in the area not served by the warring generator companies offer conflicting statements about the role of the Jdeideh Municipality in enforcing the government’s recommended generator prices.

The municipality’s website announced in June that a lower monthly price limit of LL55,000 ($36.70) for a 5 amperes subscription was to go into effect in July, but residents say that owners seldom abide by the official price.

Some residents complain that there is no meter and that a 5 amp subscription is insufficient to power many power hungry but basic appliances such as a fridge.

Still, others believe that they are receiving much less than the agreed 5 amps, but have little way to tell. “I think we are receiving less than 5 amps, maybe 3 amps,” a university student living in the area told The Daily Star.

In winter, generator bills for many in the municipality range between $30 and $70, while in the summer, prices hover at around $50 per month, residents say. The generator business is highly profitable, as the owners gain from the largely unregulated and untaxed industry.

Nevertheless, in June 2016, Jounieh Municipality announced a $20 unified tariff for electricity generators – a decision that left residents of other municipalities angered that their own municipalities were not following suit.

The most recent officially mandated monthly generator bill in Jounieh is LL40,000 ($26.70) for 5 amperes.
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