Although the government made provisions for the participation of the private sector in power generation and transmission and distribution three decades ago, it has just started making guidelines. The Electricity Act, 2049 envisages private sector participation in electricity generation, transmission and distribution.

But in order to provide open access to the electricity system, the Electricity Regulatory Commission on Wednesday drafted the 'Open Access Guideline, 2025' and asked for suggestions. 

Section 4 of the Electricity Act, 2049, Subsection 1 states that individuals or organized organizations who wish to survey, produce, transmit or distribute electricity must submit an economic, technical and environmental study report on the relevant subject and submit an application for a permit to the designated authority. 

It is said that in the case of electricity generation, transmission or distribution permit, the designated authority shall conduct the necessary investigation and issue the permit to the applicant in the prescribed format within 120 days from the date of application. In Section 5 of the same Act, it is mentioned that the period of license granted for electricity generation, transmission or distribution shall be up to 50 years. 

Although the government made the law three decades ago, it opened the way for the private sector to generate, transmit and distribute electricity, but it has not yet been implemented. After three decades, the 276th meeting of the Regulatory Commission held on June 4, 2082 approved the draft of the 'Open Access Directive, 2025' and asked for public opinion. Commission Chairman Ram Prasad Dhital said that if the guidelines are approved, the authority's monopoly on electricity purchase and sale will be broken. "Now the private sector will build hydropower projects and the authority is only buying and selling electricity, now it will be broken," he said.  If the

directive is approved, apart from the authority, energy promoters, companies involved in electricity trade and large electricity consumers will also be allowed to buy or sell electricity using the transmission line. Large electricity consumers enter into power purchase and sale agreements (PPAs) with private power producers at agreed rates.

will be able to purchase electricity. However, it is mentioned in the draft of the guidelines that transmission fee, wheeling charge, deviation fee etc. must be paid when electricity is supplied through transmission or distribution line. 

It is mentioned in the draft that a minimum of 5 megawatts of electricity should be sold to industrial customers and the minimum amount of open access transactions for international electricity trade should be 10 megawatts. The commission has categorized open access into three levels. Under long-term open access, the system can be used for more than 5 years or for the period specified in the power purchase agreement. Medium-term open access can be used for more than 1 year or up to 5 years. According to the draft, short-term open access should be used for a period of up to 1 year or a minimum of 24 hours. According to Dhital, they can use the system by making an agreement according to their needs. The nodal agency is assigned to the electricity system operation department of the authority. 

According to the commission, short-term rate indicative transmission fee of 39 paisa per unit will be paid to the authority for using short-term rate open access. 2 lakh 83 thousand 27 will have to be paid per month at the long-term rate. Anand Chaudhary, a member of the drafting of the guidelines and vice president of Independent Power Producers Association, Nepal (IPPAN), said that although he was involved in the draft, he was not involved in the charges of transmission and distribution lines. 

"Even though there is a provision in the law, the draft of the guidelines has been prepared," he said, "After the guidelines have been approved, now we can buy and sell electricity like the authority." Projects of 5 MW or more capacity connected to 33 kilovolt (KV) grid substations or 66 KV or above transmission lines, captive projects with a minimum capacity of 1 MW will be eligible to apply. 

Distribution license, business license (minimum quantity for open access transactions 1 MW) and contract electricity 5 MW or more and connected to 33 kV or higher voltage level, it is arranged that the industrial and commercial consumers can provide open access service to electricity.  Even though the draft of the

directive will not cause any disruption in international trade, it will not cause any disruption in domestic trade, according to IPPAN vice president Chowdhury. "Many consumers in the country are still getting electricity through distribution lines, it is not even known how many consumers use electricity from transmission lines and distribution lines," he said, "there may be difficulty in buying and selling electricity internally." In the draft of the

guidelines, there will be no problem as there is provision for the private sector to buy and sell electricity through distribution lines of 33 kV or more and transmission lines of 66 kV or more, said Commission Chairman Dhital. In subsection 1 of section 22 of the Electricity Act, 2049, it is mentioned that a licensed person can import and distribute electricity within Nepal with the approval of the government.

In sub-section 2 of that section, if a person who has obtained a permit wants to export the electricity he has produced to foreign countries, he can enter into an agreement with the government of Nepal and in sub-section 3, the person who exports electricity must pay the export tax to the government of Nepal as prescribed. Electricity export has been arranged in 6.11 of Hydropower Development Policy 2058. In 6.11.1 of the said policy, it is mentioned that the electricity produced in the country should be exported abroad as per the agreement between the exporter and the government. In Section 13 of the Electricity Regulation Commission Act, 2074, it is mentioned that until the wholesale market of electricity purchase and sale is established, the electricity purchase rate and procedure will be determined between the person who has received a distribution license and the person who has received a production license or a person who has received a business license or an organized organization established by the government in accordance with prevailing laws.