Electricity Sector Regulatory Law No. 462 of 2002

This Law, comprising 49 articles organized into seven Chapters, aims to regulate the energy sector by: (i) facilitating the active involvement of the private sector in electricity generation, transmission, and distribution systems; (ii) ensuring the provision of electricity, maintaining its quality, and offering it at competitive prices, while considering environmental concerns; (iii) assisting the electricity sector in attaining self-sufficiency, ensuring its financial stability, and securing funds to cover equipment, investments, and debt servicing costs; (iv) promoting fair competition in energy production, transmission, and distribution; (v) guaranteeing energy supply for the domestic market through electricity-related institutions, while upholding obligations of public service and fostering competition, all aimed at ensuring energy security and safeguarding consumers and the environment.
Article 4 establishes the foundation for privatized companies, allowing for the establishment of joint-stock companies under commercial law, subject to exceptions, with the purpose of undertaking production and distribution functions upon obtaining the required license, specifying procedures for ownership transfer and board composition, and granting various exemptions from fees and taxes. Article 6 outlines the powers and functions of the Ministry, including formulating sector policies, proposing legislation, setting safety and environmental standards, facilitating international cooperation, and addressing sector-related issues. Article 7 establishes the Electricity Regulatory Authority (ERA), tasked with organizing and overseeing electricity matters, including preparing sector master plans, drafting legislation, promoting investment and competition, setting technical and environmental norms, issuing and monitoring licenses, ensuring service quality and tariff transparency, resolving conflicts, and submitting annual reports to the Council of Ministers, as outlined in Article 12. Article 17 stipulates that the decisions made by the regulator must adhere to the principle of justification, requiring clear explanation of the reasons and objectives behind them, with such decisions taking effect only upon notification or publication in the Official Gazette. Article 34 establishes guidelines for setting tariffs, allowing generation sale prices to be freely circulated within a specified ceiling limit determined by the Council of Ministers based on the regulator's recommendation, with transmission and distribution tariffs considering cost components, international price averages, consumer categories, service quality, and consumption periods. Article 42 mandates adherence to environmental protection and safety regulations, including those concerning archaeological and tourist sites, in all electricity-related statutes, licenses, and permits, while Article 43 requires distribution service providers to comply with existing and future decrees regarding the use of public and private properties. Furthermore, Article 44 outlines procedures for licensees to request the appropriation of real estate necessary for their operations, with the regulator overseeing the process and facilitating necessary approvals. Finally, article 46 states that during the total or partial privatization of the electricity sector, the treasury is responsible for managing municipalities' funds owed by EDL (Electricité du Liban, it is a public establishment with an industrial and commercial vocation) and KADISHA Electricity (concession in North Lebanon which is owned by EDL), and following privatization, the Ministry of Finance consolidates and distributes these balances to municipalities from the independent municipal fund, based on the amounts owed to each municipality by EDL or KADISHA company.
Chapter 3 outlines the licensing and permit procedures in the electricity sector, emphasizing equality, competition, and compliance with technical and environmental standards, with the regulator responsible for processing applications, setting conditions, and ensuring timely decisions, while also granting privileges according to existing laws and overseeing equipment approval processes, and stipulating regulations for license transfer and annulment, with penalties for non-compliance and measures to ensure uninterrupted power supply in case of license cancellation. Chapter 4 delineates the processes and responsibilities concerning generation, transmission, and distribution in the electricity sector. It covers definitions of generation and transmission, technical norms, and responsibilities of the transmission company. Additionally, it addresses distribution definitions, functions, and responsibilities of distribution companies, ensuring fairness, safety, and efficiency in delivering electricity services to consumers.