Parliament enacts law to govern power sectorAfter more than a decade of planning, the Parliament on Friday endorsed the Electricity Regulatory Commission Bill 2017, paving the way to establish Nepal Electricity Regulatory Commission (NERC), an independent body to regulate the power sector of the country.
After more than a decade of planning, the Parliament on Friday endorsed the Electricity Regulatory Commission Bill 2017, paving the way to establish Nepal Electricity Regulatory Commission (NERC), an independent body to regulate the power sector of the country.
The bill was presented at the meeting of the Legislature-Parliament in April by the then Energy Minister Janardan Sharma after getting the nod from Cabinet in March.
As per the provision, the bill will become a law 91 days after President Bidhya Devi Bhandari signs it.
The law will allow the Energy Ministry to establish regulatory commission to govern entire organisations and entities of the power sector. It will supersede the existing Electricity Tariff Fixation Commission.
“The ministry, after 91 days will start establishing the commission. It will be headed by a chairman and include four members,” said Dinesh Kumar Ghimire, spokesperson of the ministry. “The commission will set standards and regulate the organisations that are involved in the generation, transmission, and distribution and trading of the electricity.”
The commission will have a full mandate to determine the power purchase rate for the Nepal Electricity Authority (NEA), the state-owned power utility. It will also set the charges that customers will have to pay to the power utility. The bill contains a provision allowing the commission to fix the electricity tariff after holding a public hearing.
The commission, according to the bill, will also establish a code that various entities under its jurisdiction will have to follow. The code will specify standards for the construction of hydropower plants, transmission lines and distribution networks. It will also determine the voltage of electricity that will be supplied to customers.
The ministry has already formed a three-member committee under the leadership of the Energy Secretary Anup Kumar Upadhyay. The committee will appoint the chairman and members and forward it to the Cabinet for the approval. “Once the bill becomes law, the committee will announce a 15-day notice requesting the interested candidates to submit proposal to become the chairman and members of the commission,” said Ghimire. “Then, within 21 days, the committee will recommend the names for the office bearers of the NERC.”
The private sector welcomed the endorsement of the much-awaited bill. However, they have raised a few questions if the commission established under the new law will be independent enough to give a fair treatment to all players in the power sector.
“The office bearers of the commission will be selected by Energy Secretary who is also chairman of the state-owned power utility, which will be regulated by the commission,” said Khadga Bahadur Bista, immediate past present of Independent Power Producers’ Association Nepal. “This might invite conflict of interest.”