IPPAN presents 12-point demand over proposed Electricity Bill 2080

By A Staff Reporter, Kathmandu, Sept. 18:The Independent Power Producers’ Association, Nepal (IPPAN) has put forth its 12-point riders on the Electricity Bill-2080 tabled in the Parliament public.

Organising a press conference on Sunday, it made the opinion public stating that although the system for developing power projects through competition is good, the provision for government and the private sector should not be arranged separately.

President of IPPAN Ganesh Karki said that apart from issuing electricity distribution and customer service licenses and opening the doors for electricity trade for the private sector, other points had reduced the role of the private sector in energy development.

Karki said that the electricity bill that prohibits the private sector, which accounts for 70 per cent of electricity production, will not fulfill the government's plan to bring prosperity through energy.

The government of Nepal prepared and registered the Electricity Bill, 2080 to amend and unify existing laws related to electricity in the Parliament Thursday.

The IPPAN has requested the government to reduce proposed royalty in the case of small projects and to do it as before in the case of big projects.

In Section 36 (b) of the Electricity Bill, 2080, the royalty of installed capacity after 15 years has been increased by Rs. 200 to Rs. 1,200 per kilowatt and the selling price per unit has been increased by 2 percentage points to 12 per cent.

According to IPPAN, it would be appropriate to reduce the royalty of small projects and to do it as before in the case of large projects in case that it is difficult to pay the current royalties due to the high cost of operation of projects smaller than 25 megawatts.

In Section 7 of the Electricity Bill 2080, the basis of competition, clause (b) has the provision of licenses through competition based on the economic basis of free shares, free electric energy, agreed to pay in lump sum in advance, agreed to pay in annual installments and electricity tariffs, the IPPAN has demanded to create a competitive environment for everyone by removing such provision.

The IPPAN has requested to add a role in the Electricity Bill 2080, similar to the Electricity Act 2049, that the private sector can identify and develop hydropower projects by itself.

According to the proposed electricity bill, the permit period has been amended to be 50 years in case of reservoir-based hydropower projects and 45 years in the case of other types of hydropower projects, and the IPPAN has requested it according to the previous Electricity Act, 2049, the validity of the survey permit for electricity production is 5 years and the permit for electricity production is 50 years.

It has suggested that the period of the permit should be changed to 35 years from 25 years in case of electricity projects other than water sources.

The IPPAN has requested for amendment of clause (1) of Section 6 of the Electricity Bill, 2080, which states that in the case of projects that consume electricity in the country, which have been granted a survey permit for electricity generation before the commencement of this Act, the electricity distribution organisation has to compete on the purchase rate to trade electricity. 

It said that the power purchase rate of the projects that have been advanced based on the fixed power purchase rate of hydropower projects with a capacity of less than 100 megawatts so far will be uncertain, so the situation will be impossible to complete project and the investment of billions of rupees in these projects will sink.