The Electricity Regulatory Commission (ERC) is moving rapidly to implement open access in Nepal’s electricity transmission and distribution system. With the aim of making Nepal’s electricity sector more competitive and ensuring the public’s right to access quality, reliable, safe, and universally available electricity, the Commission has prioritized implementation of the Open Access Directive issued in December 2025.
Regarding the various draft directives related to open access, the Commission stated that a subcommittee formed under the coordination of Commission member Lok Raj Pathak, and comprising representatives of the Nepal Electricity Authority (NEA), the National Transmission Grid Company, and the Independent Power Producers’ Association, Nepal (IPPAN), has been working on the drafts with the participation of invited subject experts.
In this context, at its meeting held on September 10, 2026, the Electricity Regulatory Commission made public the drafts of two more open access-related directives—the Installation and Operation of Meters Directive, 2026, and the Deviation Settlement Mechanism and Related Matters Directive, 2026—for the opinions, suggestions, and comments of stakeholders and the general public. Concerned stakeholders and members of the public may submit their opinions, suggestions, and comments on the draft directives in writing to the Commission’s office at Sano Gaucharan, Kathmandu, or by email at info@erc.gov.np.
These directives are subordinate regulations under Section 51 of the Directive on Open Access in the Electricity Transmission and Distribution System, 2025, and will be issued under Section 43 of the Electricity Regulatory Commission Act, 2017. With regard to the Commission’s duties, functions, and powers, Section 14 of the Electricity Regulatory Commission Act, 2017, concerning the maintenance of competition and protection of consumer interests, empowers the Commission to make the necessary arrangements for open access in the electricity system.
The Commission had already issued the Open Access Directive, 2025, in December 2025 and has now released drafts of two of the related directives required to bring the framework into full implementation.
Among the directives issued in draft form, the Installation and Operation of Meters Directive, 2026, sets out provisions regarding the location, type, and ownership of special meters to be installed and operated for the fair, transparent, and effective implementation of open access. It also establishes accuracy standards for energy measurement.
The directive seeks to bring uniformity to meters installed across Nepal’s electricity system, ensure safety and quality standards, and govern the collection, flow, management, and storage of data obtained from meters. It further provides for the transmission and collection of meter data through Power Line Carrier, Radio Frequency, and GSM 3G/4G technologies, as well as management of such data through a central Meter Data Management System.
Likewise, the Deviation Settlement Mechanism and Related Matters Directive, 2026, proposes a mechanism for addressing and settling deviations from pre-approved electricity import (drawal) and export (injection) schedules in order to maintain the security, reliability, and stability of the electricity transmission and distribution system.
Under the proposed directive, if an open access user’s actual import or export of electricity differs from its scheduled import or export, a penalty ranging from Rs 4 to Rs 16 per unit or an incentive ranging from Rs 5 to Rs 20 per unit will apply, depending on whether the deviation has a positive or negative effect on the grid. Open access users will receive the applicable penalty or incentive in proportion to the amount of power deviation and based on system frequency.
What is the significance of the meters specified under the new directives?
Under open access, multiple generators and consumers are connected to the same transmission and distribution network, making it essential to measure accurately and reliably how much electricity each party generates or consumes. Metering therefore forms the backbone of open access.
The accuracy-certified special meters prescribed under the directive will:
• Measure each user’s electricity generation and consumption data accurately and without dispute;
• Enable automatic collection, transmission, and storage of data through a Meter Data Management System;
• Allow data to be obtained even from remote meters using technologies such as Power Line Carrier, Radio Frequency, and GSM 3G/4G; and
• Provide a transparent basis for calculating charges, penalties, and incentives.
Reliable metering is a prerequisite for the fair implementation of open access, making these directives particularly significant.
What is a deviation in a power system?
Every generator and buyer must submit a schedule in advance indicating how much electricity it will generate, consume, import, or export during a given period. However, actual generation or consumption may differ from the scheduled amount. This difference is referred to as a deviation.
For example, if a hydropower project schedules 100 MW of generation for the following day but generates 110 MW due to higher-than-expected river flows, the resulting 10 MW difference constitutes a deviation.
Why is deviation management important?
A power system must continuously maintain a balance between electricity generation and consumption. Otherwise, system frequency may rise or fall, affecting grid stability and security and potentially leading to blackouts.
In an open access environment where multiple generators and buyers operate simultaneously, even small individual deviations can accumulate and place significant stress on the grid. It is therefore essential to measure deviations promptly, assess whether they have a positive or negative effect on the grid, and apply penalties or incentives accordingly.
Such a mechanism encourages users to adhere closely to their schedules, helps maintain system stability, and supports the long-term development of a reliable and competitive electricity market.
The Commission has already published for public feedback the draft Grievance Redress Directive, 2026, and the Balancing and Settlement Directive, 2026. It has also stated that it is preparing to issue additional directives necessary for implementing open access, including a transmission tariff directive and a Grid Connectivity Directive.
Individuals, organizations, and consumers using the Nepal Electricity Authority’s transmission and distribution system will also be able to benefit from open access.
At present, in the absence of open access provisions, the Nepal Electricity Authority bears the entire risk of Nepal’s electricity market. However, once the Open Access Directive is fully implemented, electricity generators and consumers will no longer need to depend solely on the NEA. This is expected to reduce market risk and help build a more competitive, predictable, and reliable electricity market in Nepal.
Spotlight
