Electricity Bill: Gift Positive Externalities to Neighbors

GoN tabled the Electricity Bill 2080 in the House of Representatives last month to supplant the currently prevalent Electricity Act, 2049. The first hydropower plant came into operation in Nepal; 80 years before the Electricity Act was promulgated and, in this period, total generation capacity had reached 278 MW only. After the Act was promulgated to attract private sector investment in the electricity sector, electricity generation capacity reached 2,684 MW till last fiscal year. An increase of 2,406 MW in 30 years is substantial progress compared to 278 MW in the previous 80year period.

History of the Electricity Act

After noting a number of flaws in over a decade of implementation of the Electricity Act, 2049, a new Bill was tabled in the Constituent Assembly in 2065. MCAs from several parties submitted amendment proposals to the Bill, totalling 142 proposals. Instead of incorporating the amendments recommended by MCAs, the Bill was allowed to lapse. Again, another Bill was tabled in 2077 in the National Assembly only to withdraw it in 2079.

Bill and Water As mentioned above total electricity generation capacity in Nepal till last fiscal year is 2,684 MW out of which 2,538 MW is hydropower (based on water resources), 53.4 MW thermal, 86.9 MW solar and 6 MW bagasse. This means 95 of the electricity generation uses water resources. Similarly, 3,102.7 MW power plants are under construction currently, of which 3,073.7 MW is based on water resources and 29 MW solar; 99 is based on water resources. Further, of 2,631.6 MW awaiting financial closure, 2,607.4

MW is based on water resources and 24.2 MW solar; 99 is again based on water resources. Of total power plants in operation, under construction and awaiting financial closure of 8,418.89 MW, 97.63 is based on water resources, while 0.63 is thermal, 1.66 solar and 0.07 bagasse. From this, it is clear that the main source of electricity generation in Nepal is water resources. But the Bill is deafeningly silent about multidimensional uses of water and the value of water from spatial transfer and temporal transfer as well as flood control benefits. It is but natural to expect this Bill to play an effective role in the development of Nepal by harnessing her water resources. But this Bill fails to meet that expectation by a huge magnitude as there are numerous flaws, blunders, weaknesses and aberrations in it, which warrant correction. For example, on the very first page of the Bill, while throwing light on the objective