Untangle the Knot of ‘Electricity Bill’ Straightaway

Nepal     is now in its 112 years' journey of electricity development. The total electricity production, including grid and off-grid from the government and private sectors together, has reached around 2,800 MW. According to government statistics, about 95 percent of the people now have access to electricity. It is of course a pleasant fact that almost every household has now done away with the traditional tuki—an oil lamp with a wick— or pine twigs as means of lighting, and have opted for electricity. Although the numerical figure on electricity access appears worthwhile, it is not at all satisfactory when it comes to the quality and flow of the power supplied.

In this long journey, we should have obtained the height of economic prosperity in terms of electricity development and its utilization by now. Widespread industrialization, operation of adequate number of electric vehicles on the roads, and the use of electrical appliances in almost every household should have become a common fact. Every sector should have become electricity-friendly by now. Nepal should have achieved the European standard in this context. China, if taken as an instance, started producing electricity much later than Nepal did, but the former has been attracting the world’s attention with its astonishing development work that makes extensive use of electricity.

It was only after Nepal and India that China emerged in the region to show its presence. India built a 130 KW hydroelectric project in Darjeeling's Sidrapong only a few years before Nepal started its first electricity production. However, it has achieved a notable growth in the segment, surprising the entire world. Despite its location between these two huge neighboring countries, Nepal has not been able to gain the comparative advantage that it deserves. It seems the power struggle that has been going on since the days of the Rana regime, the culmination of individualistic thinking, the lack of formulation of proper laws at the right time and the weak implementation of the enforced laws are some of the obvious reasons that have pushed the country's electricity development in shadow.

For the first time in South Asia, Nepal constructed the largest hydroelectric project of 500 kilowatts in Pharping, Kathmandu. However, over this long period, the country has not been able to catch the tune of development taking place in this sector. Had the Ranas, who ruled the country for 104 years, imitated at least some part of the extensive work done in electricity and other development during the British rule in India, Nepal would have achieved a certain level of development. Of course, they incepted the work in the country, but failed to devise proper laws and policies to convey awareness at the grass root level to sustain the development.

For a long period in its history, Nepal was stuck in the transition of political system. Even though monarchy was replaced by democracy, it could not sustain itself, and hence Panchayat System dawned. The political parties of the time that were out of power mobilized the citizens to protest against the Panchayat. The revolt against Panchayat, followed by the Maoists' 'People’s War' and the People's Movement of 2006-07, pushed the country further for other political changes. Since the rulers could not harness the opportunities available to them amid liquefied political atmosphere, the pace electricity development has also been entangled till today.

It should not be undermined that the then King Mahendra tried to make electricity commercially developed by bringing in 'Nepal Electricity Act, 1964'. Kulekhani I and Kulekhani II reservoir projects were built on the foundation of the Panchayat system, while the 69 MW Masryangdi power plant was also an outcome of the same political system.  Along with the run-of-river (ROR) project, the previous governments seemed willing maintain advance energy security by constructing reservoirs and even diesel plants. In spite of enforcing related laws, the Panchayat could not ensure the optimum development of electricity, it being a closed political system that discouraged the adequate involvement of the private sector.

After the restoration of multi-party system in 1990, the Electricity Act 1992 and Regulations 1993 were enforced. Although it is not clear how many provisions of the existing electricity laws were incorporated in it, but the willingness of the government to allow the private sector to participate in hydropower development by granting permission changed dramatically. Backed by the revised laws, the private sector got aggressively involved in electricity development, and we have the achievement as their outcomes. In around three decades of the licensing of the private sector in electricity production, more than 1,500 megawatts of power has been generated.

Along with this achievement, there is a need to transform the role of the state and the private sector in a new dimension. If we look at the activities since the past, it is clear that the country has failed to make the optimum achievement in electricity development, mainly due to the fact that the appropriate laws are not made at the right time and they are not revised in time. Moreover, the state does not assume its accountability for their effective implementation. In the last two decades, the same practice has been repeated. The amendment of the Electricity Act 1992 was initiated to make it compatible with the Hydropower Development Policy issued in 2002, but it has not been completed till the date.

The proposal to amend the electricity bill, which was first tabled in the parliament in 2009, is still moving in limbo. It is clearly understandable that the interests of political parties and parliamentarians are intertwined in the revised bill, which has not been approved despite being presented before the parliament twice. Leaders, ministers and parliamentarians of every political party are suspected to be working for their vested interests rather than for the country’s common goal.

The other side of the story could be the hangover of the former political systems. So the amendment of the electricity related law is not in their priorities. The goal of electricity development cannot achieved with such a mindset. Therefore, political parties, the government, bureaucracy and the concerned agencies should keep electricity development and energy security in the front line. When the Act was passed during the Panchayat period, the private sector did not dare to enter the field, and so, hydropower development remained confined within the government for decades. In the same way, if the amended bill is not approved in time, the dream to transform power development into a new dimension and to achieve energy security will always remain in shadow.

Producing electricity won't suffice for us anymore. Transmission, distribution, marketing and quality supply of power are becoming more imperative. Even more, the issue of energy security is becoming more and more complicated. Our ROR projects produce electricity in their full capacity in rainy seasons, but it drops to one-third in winter. It is not possible to maintain balance between energy demand and supply without purchasing electricity from India, mainly during winter. The production nature that makes wasteful output in rainy season while having scanty production during winter has made energy security more challenging.

Regardless of many other issues concerned, a mixed energy system was developed during the Panchayat period by establishing projects in running rivers, storage system and diesel plants. For 34 years after the end of Panchayat rule, the numerical growth of ROR projects accelerated, but the government could not construct even a single reservoir-based project. 
It is the responsibility of the government to attract the private sector for such reservoir projects. Although the government has stepped on to some extent, not a single project has been completed till date. In the last bill passed by the Legislation Committee of the National Assembly, there is a provision, which states that separate private companies can build dams and power plants if they show concern to construct reservoir projects. Along with this, the energy security aspect should be taken forward by facilitating the development of solar electricity and other renewable energy.

Transmission and distribution infrastructures are also becoming weaker and dilapidated day by day. This is adding challenges to energy security on daily basis. As of now, there are no concrete plans for increasing domestic consumption of electricity and expansion of international and regional markets. Now the state alone cannot undertake charge of the overall electricity development. Therefore, along with production, the presence of the private sector should be made mandatory in transmission, distribution and market expansion as well. The Electricity Bill which is currently being discussed in the Ministry of Energy, Water Resources and Irrigation should include these issues before it is tabled in the parliament. Only then, it will help develop an integrated electricity supply system. To mention again, tangles seen on process of approving electricity bill, mainly due to the self-interest of the political parties, is a knot in the electricity bill, which is making it tighter. It should be undone immediately. Only these measures can help us strengthen the energy security, while maintaining balance in geopolitics and energy diplomacy.

This Editorial is taken from 4rth issue of Urja Khabar bi-annual Journal Publish on 16th June, 2023