Politicization, Not Facilitation : Stakeholders Oppose Electricity Bill 2080 BS

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KATHMANDU, Jan 29: Stakeholders are expressing concerns and reservations about the ‘Electricity Bill 2080 BS’ recently introduced in Parliament. Many believe that addressing the issues of the energy sector could be better achieved by amending and fully implementing the existing Electricity Act of 2049 BS (1992).

The Electricity Bill 2080 BS is currently pending before the Infrastructure Development Committee of the Federal Parliament. The committee is working by forming a sub-committee (Energy, Water Resources and Irrigation Sub-Committee) to address the questions on the Electricity Bill. In a meeting of experts from the power sector on Sunday, the members of the Independent Power Producers’ Association Nepal (IPPAN) and the Solar Power Producers Association Nepal (SOPAN) questioned the need for the new electricity bill.

Krishna Acharya, former president of IPPAN, expressed skepticism about the intentions behind the new bill, suggesting it appears designed for control rather than protection.

“The new bill is not for protection but to control. The new bill seems to curtail the rights granted by the Electricity Act of 1992,” said Acharya. “In a situation where politicians have turned every sector into their income-generating source, it seems that the new bill has been brought without any inputs from the hydropower sector,” Acharya added.

Acharya said that when he reached 14 ministries, 23 departments, and 200 tables, he had seen a mentality of directing and controlling investors everywhere. Acharya suggested that instead of politicizing and controlling employees, they should focus on facilitation, which would help in the development of the sector.

Energy entrepreneur Guru Neupane suggested that rather than introducing a new bill, amending the Act of 1992 would be more appropriate. He emphasized the need to revise the Act of 1992, a discussion that has been ongoing since 2007 without any concrete amendments. Neupane expressed skepticism about the possibility of amending the act in the present scenario.

Neupane suggested uniformity in laws for both foreigners and Nepalis rather than having separate regulations. Mohan Dangi, senior vice president of IPPAN, said that the new bill is regressive and recommended amending the old one.

During the discussion, Kedar Karki, a hydropower developer, raised questions about the obstacles posed by the previous act and the necessity for a new one. “What did the previous act hinder and why is the new act needed? For whom is the government creating a new one?,” said Kaki.

Similarly, hydropower developer Lal Prasad KC opined that the laws and regulations of the Ministry of Energy, Water Resources and Irrigation, the Nepal Electricity Authority, and Department of Electricity Development are conflicting with each other, and this situation should be resolved. KC questioned the rationale behind a new law instead of amending the existing laws of 1992 and asked for clarification from the government.

These are the demands for amendments in the bill

Power projects designated by the Government of Nepal to be developed and operated by the Government of Nepal or an organization, body or organization with 51 percent or more ownership of the Government of Nepal as mentioned in sub-section 3 (b), sub-section (c) by the Government of Nepal, provincial governments and local levels. Or electricity projects decided to be developed and operated in joint investment by the government of the relevant level have demanded that sub-sections 3 (b) and (c) of electricity projects to be developed and operated in accordance with section 57 be removed.

In section 5 of the bill, there is a provision that the production, development and operation of power projects that have been identified and studied in detail by the government should be done on the basis of competition.

Their demand is to add a provision that the private sector itself does not have to compete with the projects that have applied for the potential power license after identifying the projects.

They say that they have made such a demand because it is necessary to continue the provisions of the Electricity Act 2049 that allow the private sector to identify and develop hydropower projects.

Similarly, it is mentioned that the Electricity Act is only for projects up to 500 MW, and above that, the Investment Board Act will attract the private sector to build small projects. Their demand is to create an environment of competition for everyone equally.

Section 6 Competition related to electricity purchase Sub-section (1) of electricity production survey permit issued before the commencement of this Act or in the case of electricity produced by electricity projects that have received a permit in accordance with this Act, in the case of electricity consumed domestically, the electricity distribution organization shall purchase electricity at the specified electricity purchase rate as determined by the regulatory body. have to do

Based on the need and justification, they want to add a system that permits more than one work to be given to the same organization. If the power generation organization has to transmit the electricity produced by the project and if the power generation organization wants to get the power transmission license along with the license, the transmission license can also be issued simultaneously. It is mentioned that arrangements should be made.

It has been demanded that the period of the permit should be 55 years in the case of reservoir-based hydropower projects and 50 years in the case of other types of hydropower projects in sub-section 1 (a) of section 19.

There is a demand that it should take 35 years to generate electricity from various sources other than water sources. It is mentioned that 35 years for electricity transmission, distribution and trading should be 10 years for customer service.

It is mentioned that after the period specified in the operation and management license of power generation center or transmission and distribution line established without foreign investment, the organization that received the previous license should enter into an agreement with the government and proceed with further procedures according to the agreement.

After 15 years, it has been requested to arrange for the annual royalty of one thousand rupees per kilowatt per year and 10 percent of the selling price per unit (kilowatt hour) for the projects that have received the permit.

It is mentioned that land acquisition should also be facilitated. IPPAN has also suggested that solar power be produced on the land of the hydroelectric project, and arrangements should be made to ensure that there is no disruption to agriculture and tourism related activities.

Ippan says that since it is the government’s responsibility to facilitate the acquisition of land for infrastructure development projects, the government should facilitate it.

Now they are demanding to reduce the punishment provision in the bill. In case of committing the following offence, they have asked to arrange a fine ranging from one lakh to five lakh rupees depending on the amount of the offence. The bill provides for a fine ranging from five lakhs to one million. Similarly, Ippan has submitted many other suggestions to the parliamentary committee for amendments in the bill.

Gokarn Bista, a member of the infrastructure committee and coordinator of the sub-committee, said that the state will also look at how much hydropower development is needed and how it will be done gradually and make a policy accordingly. He also promised to move forward by further discussing the issues needed to add to the bill.

Bista said that the bill will be passed by the parliament only if the demands of the private sector are met. Reminding that the top leaders of all political parties have proposed amendments to it, Bista said, ‘Be assured that the bill will come only to protect the investment by including the issues of energy producers.’