‘Electricity Act, 2049 BS which came in force in 1992 is not relevant anymore’

Cabinet decides to present the new Electricity Bill in Parliament

There have been many changes in the hydropower and energy sector of Nepal in the past 31 years, but the Electricity Bill has not been amended to make it timely and relevant.

KATHMANDU, June 10: A cabinet meeting held on Wednesday decided to present the Electricity Bill to the Federal Parliament to regulate electricity trade. Prior to this, the Electricity Bill, 2077 BS – which was under consideration in the National Assembly – was withdrawn by the then Minister for Energy, Water Resources and Irrigation Pampha Bhusal from the upper house of parliament on September 16, 2022.

However, the recent cabinet meeting decided to send the Electricity Bill to the Federal Parliament again through the Ministry of Energy, Water Resources and Irrigation.

Rekha Sharma, spokesperson for the Government of Nepal and Minister for Communication and Information Technology announced the decision of the Council of Ministers on Wednesday and said that the bill will be sent to the Federal Parliament.

“The Electricity Bill, which was made to regulate electricity trade, was first forwarded to the Bill Committee of the Council of Ministers. After discussion there, it has been decided to go ahead with the necessary proceedings," Minister Sharma said, adding, "The meeting of the Council of Ministers held on Wednesday has instructed the ministry concerned to submit the bill to the Federal Parliament.”

The Electricity Act, 2049 BS is currently in force but despite several attempts to amend the Act in a timely manner, it has not been possible so far.

Ganesh Karki, vice president of the Independent Power Producers’ Association, Nepal (IPPAN), said that the Electricity Act, 2049 BS which came in force in 1992 is not relevant anymore. “That's why there is a need for a new electricity bill," he said, adding, "The old electricity bill does not include any content to involve the private sector in the electricity business. Therefore, there is a need to bring in a new electricity law to open the doors of electricity trade to the private sector internally and externally,” he added.

Vice President Karki said that since the implementation of the Electricity Act of 2049 BS, many changes have taken place now and a new Act should be brought to address the issues of the present-day needs.

"Because of political instability, the Electricity Act could not be made relevant for a long time," he said, adding that there is a need to bring the Electricity Act from the Federal Parliament as soon as possible.

According to the Ministry of Energy, Water Resources and Irrigation, the previous bill was first presented in the parliament for amendment in 2018, but the bill could not be passed by the parliament. The electricity bill, which was presented in the parliament by the then Minister for Energy, Water Resources and Irrigation Barsha Man Pun on July 2, 2020, was passed by the House of Representatives and reached the National Assembly and returned to the ministry.

The Electricity Bill, 2077 BS under consideration in the National Assembly was withdrawn by the then Minister for Energy, Water Resources and Irrigation Pampha Bhusal from the National Assembly on September 16, 2022.

There have been many changes in the hydropower and energy sector of Nepal in the past 31 years, but the Electricity Bill has not been amended to make it timely and relevant.

Due to the delay in amending the Electricity Act, the private sector is not allowed to trade electricity. This has caused a dilemma among the private sector on whether or not to invest in the hydropower sector. The then minister Bhusal withdrew the bill arguing that an ordinance could not be brought while the bill was under consideration in the parliament.

With the withdrawal of the bill, the ordinance to amend the Electricity Act 2049 BS was passed by the cabinet meeting on September 23, 2022 and sent to the President's Office for approval on September 27. The then President Bidya Devi Bhandari did not approve the ordinance. IPPAN Vice President Mohan Dangi said that private companies should be involved in electricity business by passing the electricity bill.

"There is a need to amend the provision that foreign companies can directly get licenses for hydropower projects and the private sector can also compete for electricity trade," he said.