National 5 (Spotlight Weekly)

Sharing Of Knowledge

A leading US power regulator will be providing expertise and sharing experiences to help Nepal in the sector

By SANJAYA DHAKAL

With the objective of sharing experiences and helping Nepal in issues of independent power regulations, a US power regulator has signed a partnership agreement with Nepalese authorities.

The Utah Public Service Commission (UPSC) signed a regulatory partnership agreement with the Electricity Tariff Fixation Commission (ETFC) and the Department of Electricity Development (DoED) of Nepal on April 2 in the capital.

“The 2001 Hydro Power Development Policy envisages developing ETFC as a full-fledged independent power regulatory body whose need has been acutely felt after there were reservations raised from several quarters that the rates at which PPA were signed between Nepal Electricity Authority (NEA) and IPPs were too high,” said Tara Bahadur Pradhanang, chairman of the ETFC.

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According to Pradhanang, an independent, strong and capable regulatory body can effectively monitor and review PPAs and other issues of vital concern. “In this direction, the recent partnership agreement with the UPSC will be helpful as we are yet to have full knowledge and experience about the functioning of regulatory body,” he said.

The UPSC has a 70 year old history of working as a utility regulator in the Utah State of the United States of America. “By reaching into these partnership agreement, we not only want to help you by sharing our expertise and experiences but also seek to learn new ideas from you,” said Richard Campbell, chairman of the UPSC.

Dr. Kishore Babu Aryal, Secretary at the Ministry of Water Resources, hailed the partnership agreement adding that it would be helpful in increasing private sector involvement in power sector. “We look forward to the help from UPSC in issues like tariff setting, rate designs and so on. To transform the ETFC into a full-fledged power regulator as envisaged by the hydro power development policy of the government, we need to do a lot of homework and with this partnership, the government hopes that ETFC can get needed expertise (in its area of work),” he said.

After the restoration of democracy in 1990, the power sector of Nepal underwent significant transformation. Even a number of Independent Power Producers came into the picture and began feeding power into the NEA grid. However, the rates at which the NEA signed PPA with these IPPs had been a matter of intense controversy. “Perhaps we signed for those rates because we had no prior experience,” said Pradhanang.

As a result, experts felt the need for an independent and strong power regulator that could review and monitor the PPAs and so on. “The partnership agreement with the UPSC is a part of our effort to evolve into a strong regulator,” said Dr. Bishwambher Pyakuryal, a member of ETFC.

“We hope that the partnership will be mutually beneficial. Our real goal is to improve the living standards of our citizens. And it is pretty clear that the utilization of energy is critical for the development of Nepal,” said Barry Worthington, Executive Director of the United States Energy Association (USEA). The USEA has been helping Nepalese government in various sectors of energy development and partnership.

“I see the opportunity in Nepal of not only generating energy for domestic consumption but exports as well. But to achieve these objectives, role of a strong and independent energy regulator is critical,” added Worthington.

Likewise, US Ambassador to Nepal Michael E. Malinowski said that tremendous hydropower potential of Nepal provides opportunity for economic growth of the country as well as source for clean energy. “At present only 18 percent of the total population of 23 million Nepalese enjoy access to electricity. The total installed capacity is just over 600 MW. But there is demand for additional 50 MW every year. Without timely investment in this sector, the situation cannot improve,” he said, adding that in view of this situation a regulator was necessary to ensure that there is no unfair market manipulation.

Experts agree that the partnership could herald a new beginning in the energy sector of the country in the days ahead.