NEA unbundling process set to begin soon

Kathmandu, March 25:

The government is going to introduce a legislation in parliament ‘in a fortnight’ kickstarting reforms in the energy sector.

The legislation is coming as part of the institutional and political commitment to power sector reforms which, among others, involves unbundling the Nepal Electricity Authority (NEA) and having a regulatory body too.

“Power sector reforms hold. The draft bills are being scrutinised by Ministry of Law, Justice and Parliamentary Affairs. They will come up with their views in ten days before we push forth,” said Tika Dutta Niraula, Secretary, Ministry of Water Resources.

“Our agenda now is to have all the laws on power sector reforms ready by June 15,” Niraula told The Himalayan Times.

He also said that once the drafts come back with “positive comments”, they will be forwarded to the cabinet.

Once enacted, the Electricity Bill, 2007, will split the NEA into two separate entities with separate functions, as part of the reforms process “to boost the performance and image of the NEA”,.Similarly, once passed Nepal Electricity Regulatory Commission (NERC) Bill, 2007 will culminate in the formation of a regulatory body which will revitalise the now defunct Electricity Tariff Fixation Commission (ETFC).

While one entity will be entrusted with the sole task of looking into power generation, the other will look into tasks like power transmission.

While Electricity Bill, 2007, will supersede Electricity Act, 1992, the NERC Act, 2007, is being enacted to evolve the existing Electricity Tariff Recommendation Commission (ETRC) into a regulatory authority. Secretary Niraula said the task was being speeded up following a circular from the Prime Minister’s Office which had explicitly said that “the task of enacting necessary legislation for energy sector reforms be finished by the end of the current fiscal year by July 15.”

The bid to supersede the governing laws by new Acts goes back to the second half of 2005. The efforts received a setback in January 2006 when the erstwhile regressive government failed to push the ordinances lacking “political commitment.”

However, the enforcement of the new law could cause employees unrest, with NEA employees’ union flaying unbundling as a ploy to benefit none else than the existing” cronies” in the power sector.