Private Sector Electricity Developers Dissatisfied with Proposed Electricity Bill

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KATHMANDU, Sept 15: Private sector electricity developers have expressed their dissatisfaction over the proposed Electricity Bill 2023, which has been awaiting approval of parliament.

Minister for Energy, Water Resources and Irrigation Shakti Bahadur Basnet on Wednesday tabled the draft of the new Electricity Bill 2023 at the lower house of the federal parliament. The Bill talks about promoting competition to grant operating licenses, and development and trading of hydropower projects.

Till date, the domestic energy industry functions as per the Electricity Act 1993. Stakeholders concerned have been demanding that the government revise the law to make it compatible with the current times.

The Bill to amend the Electricity Act-1993 has envisioned amending and integrating the existing electricity laws. It has maintained provisions to provide licenses to the private sector to trade electricity within and outside the country.

Although the private sector is supposed to participate in purchase and sale of electricity, the hydropower projects run by the government and related bodies do not have to compete for the same, according to the new bill.

Ganesh Karki, president of the Independent Power Producers’ Association, Nepal (IPPAN), said the bill seems to tighten the noose for the private sector rather than being flexible to it. “Despite talking about inviting the private sector for electricity trading, it has maintained the provision that they will get only the less priority projects left over by the government bodies,” he said.

Earlier, a report of the Office of the Auditor General showed that the cost of government operated hydropower projects is up to three times more expensive compared to the cost of the projects run by the private sector. “In this context, the production of high-cost projects cannot prove to be cost-competitive in the international market,” Karki said.

The proposed bill has considered delegating authority to the local governments to manage hydropower projects with five megawatts capacity and the alternative energy-based production units. The projects with a capacity of up to 25 MW will be looked after by the provincial government, while the ones with a capacity of more than 25 MW will be under the jurisdiction of the federal government.

Prakash Dulal, deputy general secretary of the IPPAN, said the bill has considered giving unlimited authority to the government bodies that issue licenses to the hydropower producers. “It might give rise to the possibilities of manipulations.”