The Nepal Electricity Authority has opted to propose tariffs for electric vehicle charging stations even before constructing the stations and finalising rules needed to operate and regulate the crucial infrastructure touted to boost electric mobility in the country.

A recent board meeting of the power utility has forwarded a proposal on tariff revision under the heading ‘other transportation sector including rates for charging stations’ to the Electricity Regulatory Commission for review and final decision.

As per the proposal, any charging station operator including the power utility which has plans to operate 50 such stations independently across the country will be liable to pay Rs 200 as demand charge per kVA each month and Rs8.75 in energy charges per unit of power to operate low voltage charging stations.

The state-owned power utility has proposed to levy a demand charge of Rs 255 per month and Rs9.35 per unit during peak hours and Rs 3.70 per unit during the night and Rs 8.40 in odd hours in the wet season for charging station operators using medium voltages.

In the dry season, the utility has aimed to collect Rs9.35 per unit during peak hours and Rs8.40 in odd hours.

The rates for power usage in charging stations are higher than the electricity tariff proposed to be levied on the public transportation sector.

The move from the power utility has come two months after the energy ministry outlined a business model paving the way for private investments in building charging stations for commercial operation.

In its outline, the energy ministry had asked the power utility to come up with concrete technical and financial standards which will govern commercialisation of the infrastructure.

As per the outline, all charging service providers are required to follow the parameters set by the electricity authority while designing, installing and commissioning the facility.

“Service providers will be allowed to set up charging points at public spheres, government offices, public entities and businesses, and commercial and residential buildings,” states the outline. “The developers must test and commission the facility in the presence of a technical officer of the electricity authority and obtain a test certificate before beginning commercial operation.”

Two months on, the power utility is yet to formulate the work procedures, which will mandate criteria for private investments in the infrastructure, while the country has been witnessing a gradual increase in the number of EVs plying on the roads.

According to Electric Vehicle Association of Nepal (EVAN), the number of Evs in the country, including private two-and four-wheelers, has crossed 45000 in 2018 and around 10 percent of vehicles sold in the country are Evs.

“There were some procedural hassles that hindered us from developing the procedures and there is also a need to hold discussions with experts and stakeholders on fixing the terms and standards for charging infrastructure,” said Sagar Gyawali, a member of the task force formed to draft the procedures and assistant manager of Energy Efficiency and Loss Reduction Department of Nepal Electricity Authority.

“We are aware that without work procedures along with specific criteria and technical standards, operating charging stations would be difficult and are working to forward a draft on the same for approval within a month.”

Also, the power utility which announced an ambitious plan six months ago to invest in 50 charging stations across the country within a year and a half has yet to invite bids for the construction of the infrastructure.

According to Gyawali, the department has finished preparing technical documents needed before opening a global tender for construction of proposed charging stations and will forward the document to power utility board for approval within 15 days.

The power utility has laid plans to build charging stations with have a Combined Charging System equipped with Mode 3 DC charging ports in sync with the interface of the new range of electric vehicles in the market.

Amid the uncertainty over the construction of charging stations, formulation of the work procedures and standard tariffs, some transport entrepreneurs have already invested in charging stations and are awaiting the authorities to make things easier.

Sundar Yatayat, which runs four electric buses in Kathmandu has been operating a station installed with 30 kW, 60 kW and 120 kW charging ports at a cost of Rs5.4 million excluding taxes.

Company officials recently told the Post that they were ready to invest in more stations only if the authorities fix a standard rate and other norms for operating charging stations.

However, the private sectors’ plan to invest in EV charging stations is likely to be deferred as the Electricity Regulatory Commission is yet to issue the final directives on tariff fixation.

“The power utility will be able to impose new rates for general and commercial users of energy, only after the directive which the commission has published for stakeholder review is endorsed,” said Ram Prasad Dhital, member of the commission who oversees legal and external affairs.

“Once the directives are implemented, the power utility would also have to propose for tariff revision again submitting additional documents as mentioned in the new rules.”

As per the draft directive, the Nepal Electricity Authority must submit its projected annual revenue requirement to obtain permission to revise its tariff.

The regulator in the proposed rules has said that it will base its decision on the tariff after evaluating the power utility’s audited financial report of the past two years and its financial projections for the current and next fiscal years.

As per the directive, the commission will review the capacity demand charge levied on industrial consumers, the energy charge paid by general consumers, the annual return of the power utility from investments, the cost, quality and quantity of electricity supplied through the country in relation to the source, the interest expenses and the power purchase commitments of the power utility before making a decision on revising the tariff.