Kathmandu. Minister for Energy, Water Resources and Irrigation Biraj Bhakta Shrestha has said that the regulatory bodies of the electricity sector should work to win the trust of investors, consumers and other stakeholders as the national priority is to build an energy-based economy.

Receiving the annual report of the Electricity Regulatory Commission (ERC) in the fiscal year 2082/83, Minister Shrestha said that the need of the market and concerns of stakeholders should be paid in the regulatory decision and policy formulation.

On Thursday, the commission’s chairperson Dr. Ram Prasad Dhital handed over the annual report to Minister Shrestha. On the occasion, Minister Shrestha said that the recent incidents of disaster have created a new way to think about the diversification of Nepal’s energy system. He said that energy security should be strengthened by diversifying the energy mix. He stressed that the commission should have adequate coordination with the stakeholders including investors while preparing the regulatory system. He was of the view that only a clear, predictable and credible regulatory environment can attract investment in the energy sector when there is a need for large investment in the energy sector.

The commission’s annual report states that various regulatory instruments have been developed and implemented keeping in mind the changing needs of the electricity sector, market development, investment environment and consumer interests. The commission has issued Dispute Resolution Bylaws, 2082, Directives on Open Access to Electricity Transmission and Distribution System, 2082, Directive on Power Purchase and Sale Rate of Reservoir Power Stations, 2082 and Consumer Electricity Tariff Determination Directive, 2083.

Similarly, the open access provision has clarified the eligibility for using the electricity transmission and distribution system, the application and approval process, priorities and fees. It has created a more systematic basis for the producers, electricity traders and large consumers to transact electricity through the existing system. A separate regulatory provision has been made to regulate the purchase and sale of electricity generated from reservoir projects.

The commission has also forwarded the review and revision of the Directive Related to Determination of Consumer Electricity Tariff, 2076, Bylaws on Conditions to be Followed by the Electricity Licensee, 2076 BS and Directive on Pre-Approval of Public Issue of Shares of Electricity Company, 2078. The report states that the Commission has forwarded a study on the cost and tariff structure of electricity, consumer tariff, hydropower operating cost and cost of generation to make the regulatory decision based on study and facts.

Similarly, the report states that the commission has decided on two disputes related to the long-disputed dedicated feeder and trunk line of electricity tariff. In its annual report, the commission will focus its performance for the fiscal year 2083/84 mainly on three strategic priorities. First, institutional strengthening, second, expansion and strengthening of the regulatory regime, and third, regulatory facilitation for restructuring of the power sector.

The Commission has stated that it will facilitate the structural development and restructuring of electricity generation, transmission, trade and distribution sector to make it systematic and transparent through clear regulatory principles, standards and institutional mechanism.

Similarly, the regulatory work will be carried out keeping in mind the increase in internal electricity consumption, energy security, development of electricity market, security of investment and protection of the rights and interests of consumers. The Commission will also include the damage caused to the power infrastructure by floods in the upcoming regulatory work. The Commission has concluded that the impact on the transmission and generation infrastructure has shown the need to strengthen the disaster resilience and resilience of the electricity system.