Kathmandu, December 24:

Small Hydro Power Developers’ Association Nepal (SHPDAN) today said the Nepal Electricity Authority’s (NEA) new power purchase rate of Rs 7 per unit during the dry season was inadequate.

The NEA management committee on Sunday had increased the power purchase rate by 26.6 per cent and 2.6 per cent to Rs 7 and Rs 4 in dry and monsoon respectively for projects generating up to 25 MW of energy.

“At the present cost of energy production, the private energy producers are getting returns up to 12 to 13 percent which do not match the government policy which allows profit up to 16 per cent of the income,” said Hari Bairagee Dahal, chairperson of the SHPDAN.

Till five years before, the NEA was conducting power purchase agreement (PPA) with the private energy producers at Rs 5.52 and Rs 3.90 per unit during dry and monsoon season.

“Considering the present rise in price of construction materials, consumers’ price and brain drain in the sector, the new power purchase rate is inadequate,” added Dahal.

The new decision allows three per cent increase in the purchase rate for nine times, which the energy producers say is impractical. “There has been no increase in purchase rate in the last five years. Hence, there should be a provision to raise the purchase rate by five per cent annually”, he added.

NEA has been purchasing 150 MW energy from private sectors, including the Bhote Koshi and Khimti hydro power projects.