KATHMANDU, March 2: The cabinet on Tuesday endorsed Electricity Regulatory Commission Bill 2017, paving way for the tabling of the much awaited bill in the parliament for approval.
The bill envisages forming an independent regulatory commission led by an energy expert. The commission will regulate the electricity sector, including fixing electricity prices, and work to enhance competition in hydropower generation.
Dinesh Ghimire, the spokesperson for the Ministry of Energy, said that the bill will now be registered at the parliament for final approval. “The commission will generate fund by charging fee on its services. It will work independently,” said Ghimire.
The commission will replace Electricity Tariff Fixation Commission; set electricity prices and monitor power purchasing decisions of the Nepal Electricity Authority (NEA).
The bill also has a provision that allows the commission to control electricity prices as it also regulates investments in hydropower project which is directly reflected in Power Purchase Agreement (PPA) that the NEA signs with hydropower companies.
The regulated hydropower investment will indirectly help to curb inflated costs of projects while signing PPA and control consumer prices of electricity.
An official involved in drafting of the law also said that current opaque power purchase deals by NEA will come to an end once the new law comes into effect. The commission also protects hydropower companies from NEA's dillydallying in signing PPA.
In 2009, the bill was withdrawn from the parliament over the issue of regulating licenses of hydropower projects. Lawmakers had registered several amendment proposals on the bill at that time, aiming to keep hydropower licensing out of the purview of the commission.
As the new bill has omitted provision of regulating licenses, it won't control corruption related to licensing of hydropower projects. The commission will also issue permission on trading electricity.
But another important bill to replace Electricity Act has not yet been forwarded for overall reforms of the electricity sector.