Nepal Electricity Regulatory Commission (NERC) has introduced the ‘Electricity Customer Tariff Determination Guidelines’ today.
The guideline aims at managing electricity generation, transmission, distribution and trade to balance the demand and supply of electricity for customers, according to the commission that had previously identified some key factors that play a crucial role in determining the tariff to determine the electricity tariff.
The chair of commission Dilli Bahadur Singh informed that the new guidelines will play a vital role to determine the electricity tariff for all kinds of consumers in a scientific manner. According to the guidelines, it will protect customers’ rights and assure quality electricity. “It also paves way for professionalisation of the electricity distribution company and raising its effectiveness,” he said, adding that the new guidelines also state about improvements in distribution system and building a mechanism to strengthen distribution company’s resources for future risks. “The guidelines also have a provision of ensuring respectable rate of returns for the distribution companies.”
The guidelines reads that the commission will determine overall investment in projects, including power purchase agreement (PPA) with independent power producers (IPPs), annual electricity sales and also assess income and expense statement. “The commission will also determine expenses on distribution and transmission lines, interest rate and payments, depreciation, regulatory fee and employee expenses,” it reads, adding that the commission will also determine expected annual income of distribution company. “The guidelines – based on the above mentioned factors – the electricity tariff for customers will be determined.”
The guidelines has also opened the doors for Nepal Electricity Authority (NEA) to introduce new electricity tariff for its customers. “The NEA had proposed commission to raise electricity tariff rate by 15 per cent on average for all types of customers except for dedicated feeder and trunk lines but no decision has been taken yet on it.”
According to the guidelines, before determining electricity tariff, any distribution company will have to submit the related documents to commission along with Rs 25,000 fee and the commission will finalise the electricity tariff within seven days from the application date. “At present, guidelines can only be applied to NEA as it is the country’s sole power utility but in the future if any new power distribution company is established, then it will have to follow the guidelines.”
A few weeks ago, NEA had decided to reduce the tariff rates for dedicated feeder and trunk line users, that is, industries and hospitals. According to the NEA’s decision, from now onwards dedicated feeder and trunk line users will be charged only 15 per cent more than the tariff paid by general consumers. However, the revised tariff will be implemented only if the commission approves NEA’s proposal. Currently, NEA has been charging customers minimum of Rs 4.20 per unit to a maximum of Rs 19 per unit. According to the new guidelines, power trading companies will not be allowed to fix electricity tariff more than once a year.
The guideline aims at managing electricity generation, transmission, distribution and trade to balance the demand and supply of electricity for customers, according to the commission that had previously identified some key factors that play a crucial role in determining the tariff to determine the electricity tariff.
The chair of commission Dilli Bahadur Singh informed that the new guidelines will play a vital role to determine the electricity tariff for all kinds of consumers in a scientific manner. According to the guidelines, it will protect customers’ rights and assure quality electricity. “It also paves way for professionalisation of the electricity distribution company and raising its effectiveness,” he said, adding that the new guidelines also state about improvements in distribution system and building a mechanism to strengthen distribution company’s resources for future risks. “The guidelines also have a provision of ensuring respectable rate of returns for the distribution companies.”
The guidelines reads that the commission will determine overall investment in projects, including power purchase agreement (PPA) with independent power producers (IPPs), annual electricity sales and also assess income and expense statement. “The commission will also determine expenses on distribution and transmission lines, interest rate and payments, depreciation, regulatory fee and employee expenses,” it reads, adding that the commission will also determine expected annual income of distribution company. “The guidelines – based on the above mentioned factors – the electricity tariff for customers will be determined.”
The guidelines has also opened the doors for Nepal Electricity Authority (NEA) to introduce new electricity tariff for its customers. “The NEA had proposed commission to raise electricity tariff rate by 15 per cent on average for all types of customers except for dedicated feeder and trunk lines but no decision has been taken yet on it.”
According to the guidelines, before determining electricity tariff, any distribution company will have to submit the related documents to commission along with Rs 25,000 fee and the commission will finalise the electricity tariff within seven days from the application date. “At present, guidelines can only be applied to NEA as it is the country’s sole power utility but in the future if any new power distribution company is established, then it will have to follow the guidelines.”
A few weeks ago, NEA had decided to reduce the tariff rates for dedicated feeder and trunk line users, that is, industries and hospitals. According to the NEA’s decision, from now onwards dedicated feeder and trunk line users will be charged only 15 per cent more than the tariff paid by general consumers. However, the revised tariff will be implemented only if the commission approves NEA’s proposal. Currently, NEA has been charging customers minimum of Rs 4.20 per unit to a maximum of Rs 19 per unit. According to the new guidelines, power trading companies will not be allowed to fix electricity tariff more than once a year.
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