National 2 (Spotlight Weekly)

Power To the People

The United States shows how electricity can transform the entire sphere of life

By KESHAB POUDEL, in Washington DC

How can uninterrupted and affordable electricity supply change the fate of people? This is what one can see in the development of the United States, the world's sole super power. Electricity is the primary catalyst for change there.

This is one of the reasons why the United States spends billions of dollars in research each year to continue supplying electricity at affordable prices. The global experience has shown that poverty is also linked with the supply of electricity. The greater the section of the population using electricity, better the economic conditions.

Distribution line: Need for expansoin

Electricity operates homes, office and industries; provides communications, entertainment and medical services; powers computers, technology and Internet and runs various forms of transportation. "No one can imagine life without electricity. Our media are more concerned about it. The blackout in California has taught us a great lesson on how to effectively manage the power industry," said, Marvin Leibstone, editor and publisher of GS&T-Global Security and Trade Journal.

The electric power sector is a $216 billion-plus industry that provides a vital service to the United States. The industry is undergoing unprecedented change as competition continues to evolve in what was once a strictly regulated environment.

This has not been realized in countries like Nepal where lack of regulatory mechanisms has forced the consumers to pay high tariffs. The lack of competition among the power producers has also increased the tariff. Nepal and United States began producing electricity almost at the same period. The United States has provided electricity throughout the country during the period, while only 15 percent of the Nepalese population has access to electricity.

If the supply of electricity is linked with the overall development of the country, why has not the government taken necessary steps to expand generation and facilitate transmission and distribution at affordable prices?

In the United States, the private sector is responsible for the generation, transmission and distribution of electricity. In rural areas, cooperatives play that role. The federal regulatory authorities work to prevent monopolies and unnecessary tariff increases.

"Although the electric power industry is a diverse one with thousands of suppliers, not all of them are regulated in the same way. Some suppliers, such as shareholders-owned utilities, are highly regulated and at the federal and state levels while others such as electric cooperatives and government-owned utilities are not subject to the same regulatory requirements," said John Hammond, Program Manager, United States Energy Association (USEA0. "The electric power industry in the US is highly competitive."

Under the South Asia Regional Media Partnership on Energy, executive exchange program, a group of mediamen and senior officials from Nepal, India and Sri Lanka shared their views on the experience of the United States in Washington DC.

Conducted by the US Energy Association under the South Asia Regional Energy Programs and funded by US Agency for International Development, the five-day program helped to strengthen skills in reporting on energy-related issues and to increase overall knowledge of the energy-related national and regional issues.

The electricity power industry in the United States seems to be complex but it functions in accordance with the law. "There are various agencies to regulate the power industry to make the electricity more affordable to the people," said Amy J. Hillagan, of the USEA and senior program coordinator for South Asia Regional Energy Partnership Program.

South Asian countries follow similar practices, as there is high leakage in the electricity supply. In most countries, generation, transmission and distribution is controlled by government agencies. Competition in transmission and distribution is virtually non-existent.

In the case of Nepal, power was generated in the early days to light the homes of the elite. This concept still seems to be guiding principle. In the policy making level, nobody seems to be worried about ensuring affordable tariff. Prime Minister Chandra Sumsher Rana built the first hydropower plant in Pharping, south of Kathmandu, in 1911 with a generation capacity of 500 KW to supply electricity to Rana families and their relatives in Kathmandu and Lalitpur. It was the second or third hydro project in the Indian sub-continent. Yet a half-century on, the only addition was the 700 KW Sundarijal plant in 1934 and a 1600 KW diesel plant 1956.

From the inception of the industry, electricity is meant for privileged and urban elite, not for the general public. As Nepal was a completely isolated until 1951, the rulers does not want to introduce electricity that would have increased literacy, generated awareness though foreign radio broadcasts. Despite the expansion in generation, transmission and distribution, electricity remain the preserve of the urban population. Nepal's total hydro-electricity capacity is 507.2 MW, with 51.3 MW thermal. The country imports 50 MW of power.

The basic concepts of the United States and Nepal behind electricity generation, supply and distribution are quite different. Nepal's ruler were worried about expanding electricity in the first phase, whereas US authorities were anxious to increase supply.

President Theodore Roosevelt's vision helped to promote electrification in the United States. "It is the obvious duty of the government to call the attention of farmers to the growing monopolization of water power. The farmers above all should have that power, on reasonable terms, for cheap transportation, for lightening their homes, and for innumerable uses in the daily task on the farm." (President Theodore Roosevelt, message of transmittal to Congress Report of the Country Life Commission. February 9, 1909).

Contradictory to Roosevelt's statement, Nepal's prime minister Chandra Sumsher Rana called it a great personal privilege and named the electricity bulb as Chandra Jyoti (Chandra Light). Nepal's rulers were more concerned with providing the facility to their families, whereas Roosevelt was concerned with the difficulties of the people.

From the inception of the power industry, the aim of every change in the United States is to supply electricity in a regular and affordable way. The private sector, which generates, transmits and distributes the electricity, is guided by various agencies to monitor and regulate production.

The United States generates 3,309,550 million kWh. The country's 110,505,820 residential consumers use 1,183,137 or 36 percent of electricity. The commercial sector uses 30 percent, industrial sector 31 percent and others 3 percent. Average price for residential users is 8.21 cents, followed by 7.36 cents for commercial users, 4.57 cents for industrial users and 6.48 cents for others. The average is 6.78 cents. In Nepal there are 8,75,000 consumers with average tariff of 9 cents per kWh. Domestic sector uses 36.84 percent where as the industrial sector uses 37 percent. Others use the remainder.

Electricity supply in the United States is affordable, regular and highly sophisticated. "We have been doing research to find alternative affordable energy sources for the future," said Patrick Quinlan, senior energy analyst at National Renewable Energy Laboratory, Washington DC.

The electric power industry plays a critical role in American society at many levels. Although the US electric utility has complex structures, there are various agencies involved in the process of generation, transmission and distribution. From private parties, to cooperatives, and central and state authorities, they have their own role to play.

Basically, there is a strong regulatory federal body, which takes care of the power structure from giving license to generating electricity. The affordable and uninterrupted supply of electricity in the United States rests on the overall system of transparency and accountability.