IPPAN urges government to amend ‘Electricity Bill’ ensuring to protect private sector's role in power generation

Kathmandu; The Independent Power Producers' Association Nepal (IPPAN) has called for amending the 'Electricity Bill 2023,' which aims to amend and consolidate Nepal's electricity laws.

While the tabled is under purview of the parliament, the IPPAN has urged to take forward a number of amendments to the bill to ensure safeguarding the role of the private sector in power generation. These proposed amendments aim to protect the private sector's role in Nepal's power generation, maintain competition, and ensure affordable electricity for consumers, according to the IPPAN.

The umbrella organization of the private sector power producers emphasizes the crucial role played by the private sector over the past 25 years, contributing significantly to Nepal's electricity production. Their involvement has enabled the country to become an electricity exporter during the rainy season. IPPAN asserts that the private sector should continue to participate in hydropower projects' identification and development, similar to the provisions in the 'Electricity Act 1993.'

The IPPAN highlights the importance of maintaining the system of open access to electricity production, which fosters entrepreneurship and investment in the sector. IPPAN warns that abolishing this system would discourage private sector participation in electricity production.

Here are key demands forwarded by IPPAN:

IPPAN requests that permits granted under the previous Electricity Act 1993 be honored, and project extensions be processed as per the law.

Section 7(b) of the Electricity Bill 2080, which eliminates certain provisions related to competition in licensing, should be amended to ensure fair competition and prevent expensive electricity production.

IPPAN advocates for private sector involvement in identifying and developing hydropower projects, citing their significant contributions to the country's electricity generation.

They propose that the validity of electricity production survey permits should be maintained at five years, as per the previous Electricity Act 1993, while electricity production permits should remain valid for 50 years.

A request has been made to amend the Electricity Bill 2023 to extend the permit validity for electricity projects not related to water sources from 25 years to 35 years.

IPPAN urged that power projects, whether operated by the government or government-owned organizations, be subject to competition to ensure transparency and cost-efficiency.

It has also proposed adjustments to the royalty rates for small and large projects to account for operational costs and ensure fair payments.

IPPAN also requested an amendment allowing projects that failed to submit the required details within the survey permit period to proceed as per the previous Act.

IPPAN has also objected to a provision to restrict the construction of solar power projects on arable land, park reserves, or areas with government irrigation facilities, as specified in Section 41(2) of the Electricity Bill 2023.

IPPAN recommended mandatory institutional representation on directorate committees, replacing the alternative arrangement of inviting private sector representatives.

Lastly, it called for more stringent penalties in Section 46 of the Electricity Bill 2023, increasing fines and imprisonment terms to deter non-compliance.