Kathmandu, January 30

Formation of the Electricity Regulatory Commission has moved ahead with the consent of the Ministry of Finance on the related regulation drafted by the Ministry of Energy to execute the Electricity Regulatory Commission Act, which was endorsed by the Parliament on August 11.

Dinesh Kumar Ghimire, spokesperson for the Ministry of Energy, said as per the provision of the act, the ministry would form a committee led by the energy secretary, comprising one expert and a gazetted first class officer, to appoint the chairman and four members of the commission.

The government has envisioned the commission to regulate electricity generation, transmission, distribution and trade. Currently, there is no regulatory agency in the electricity sector.

The concept of the Electricity Regulatory Commission was introduced one-and-a-half decades ago. However, the Ministry of Energy finally geared up to form the commission following endorsement of the Electricity Regulatory Commission Act. Following MoF’s consent, the Ministry of Energy will seek required feedback from the Ministry of Law, Justice and Federal Affairs and present a proposal to the Cabinet for further action.

The Energy Crisis Prevention Action Plan issued by the government on February 18, 2016, incorporates the provision for formation of a high-level Electricity Regulation Commission, which would have the authority to regulate issues relating to transmission lines, power purchase, tariff fixing and implementation. The commission’s decisions and directions will have to be followed mandatorily, meaning that its presence will be significant in putting an end to the irregularities reported in the energy sector.

As per a provision of the act, the commission will develop grid and distribution code and operation and maintenance guidelines for generators, transmission companies and distribution utilities. Currently, Nepal Electricity Authority is the sole power utility in the country. Following the formation of the regulatory body, private companies are expected to enter the transmission and distribution sectors, according to Ghimire. Till date, private sector engagement is only in generation.

“As we have envisioned distributed generation to address the energy demands of local bodies, private companies can be engaged in transmission and distribution as well.”

Ghimire added that the commission will regulate the quality and efficiency of the national grid and transmission safety to ensure reliable power supply to consumers.

The commission will also fix the wheeling charge of transmission lines, surcharges in special cases (services) and electricity tariff. It will call a bid for competitive tariff from the generators to end the syndicate in tariff rate and safeguard consumers’ interests. It will also promote merger and acquisition of energy companies of similar nature.