The energy promoter’s disagreement with the proposal to identify, grant licenses, and conduct competitions for hydropower projects.

The Electricity Bill has been stuck in the Infrastructure Development Committee of the House of Representatives for a year. Although the bill, aimed at promoting electricity production, transmission, distribution, and trade, was sent for discussion one and a half years ago, the committee has not yet started work on it.

The then Energy Minister Shakti Basnet registered the bill in Parliament on September 13, 2023. Parliament sent the bill to the committee on October 13 of the same year. Committee Secretary Udaya Kumar Bhandari said that 97 MPs have filed amendment proposals on the provisions made in the Bill. “From this week, we are preparing to start the monthly discussion on the bill,” he said. Stakeholders have been expressing dissatisfaction with the bill. The energy promoters have been objecting that the private sector is being protected. Disagreeing with the proposals to be made on the basis of identification, permit and competition for hydropower projects, the energy promoter has expressed his concern that if the Bill is passed, there will be an exodus from the hydropower sector.

Electricity trading, which has been demanded by the private sector for a long time, is included in the proposed electricity bill. The participation of the private sector in electricity trading and transmission lines is included in the bill. “An organization that has received a business license subject to the law will be able to conduct electricity business,” it is mentioned in Article 34 of the draft.

Provisions have been made in the proposed bill to purchase electricity produced by organizations that have received permission to produce electricity in whole or in part, to buy and sell electricity among organizations that have received trade permits, to sell the purchased electricity wholesale or retail, and to conduct international trade in electricity.

In the proposed bill, the project of connected capacity up to 5 megawatts and projects related to alternative energy have been given authority to the municipality. More than 5 megawatts and up to 25 megawatts, two or more projects of up to 5 megawatts within the municipal boundaries have been given to the provincial government.

Projects with a capacity of more than 25 megawatts, projects between 5 to 25 megawatts located on the border of two or more provinces will be under the authority of the central government. Also, in the case of power projects to be connected to the national grid, the government will have the right to do so.

Former Energy Secretary Anup Kumar Upadhyay said that even though there is a need to change some sections for the purposes of federalism, the Act of 1992 is sufficient to improve the energy sector. “The existing law is enough to reform the energy sector, if there are some changes in the current law, it covers everyone,” he said, “There is no need for a new law, there is no need to keep using new/new ones in the energy sector.” He said that the Electricity Act 1992 is private sector friendly. He said that the existing law has brought various facilities to the private sector and brought the development of electricity to its present state.

Section 5 of the Electricity Bill has provisions related to competition. In sub-section 3 ‘b’ of section 5, it is mentioned that hydropower projects decided by the government to be developed and operated by the government or an organization, body or organized organization with 51 percent or more ownership of the government, or by the union, state and municipality as a single or joint investment, do not have to compete.

Even though it is a good arrangement to develop power projects through competition, the government and the private sector should not be arranged separately, said Prakash Chandra Dulal, Deputy Secretary General of the Independent Energy Producers Association (IPPAN). “Through this bill, the government, state and municipality and government-owned companies do not have to compete, only the private sector has to compete for power project development,” he said. “The bill differentiates between private and government.” He alleges that the bill will prevent the private sector from identifying and developing projects. “After identifying the 500 kilowatt and 1 megawatt projects in my village neighborhood, the project could be developed by completing the government process, now the three-level government can participate in the private sector only after identifying the project and competing,” said Dulal. According to section 56 of the bill, there is an arrangement for the private sector to get only the hydropower projects left by the government and foreign governments and companies. In the said section, it has been arranged that hydropower projects can be developed and operated by agreement. It is mentioned in that section that anyone can give projects larger than 100 MW without competition.

The permit period of the hydropower project, which was previously 50 years, has been reduced to 45 years. In section 19, the period of the permit is stipulated to be 45 years in case of reservoir hydropower projects and 40 years in case of other types of hydropower projects. Energy According to the old Electricity Act, the promoter should maintain the 5-year period of the electricity production survey permit and the 50-year period of the electricity production permit, said Dulal, Deputy Secretary General of IPPA.

There is a demand from the private sector that the permit period of 25 years for projects like solar other than water resources should be amended to 35 years. In Section 19, the license period is 25 years for electricity transmission, distribution and business and 5 years for customer service. The promoters say that 10 years should be kept for customer service and 50 years for electricity transmission, distribution and business. It is mentioned that the government can extend five years if there are problems like obstacles in the project, development and operation.

Source : Kantipur