The proposed Nepal Electricity Regulatory Commission (NERC) has moved a step closer to reality with the Cabinet approving the Electricity Regulatory Commission Bill 2017 on Thursday.

The bill will open the way for the establishment of the independent body which will regulate the country’s power sector. The Energy Ministry had submitted the bill at the beginning of March, and its approval by the Cabinet’s Bill Committee means that it can be tabled in Parliament for its endorsement. “The bill will be presented to Parliament after minor language editing,” said a highly placed source at the Energy Ministry. The bill will become law 91 days after it is passed by Parliament, allowing the Energy Ministry to establish the regulatory commission consisting of experts from the energy sector. 

“After the bill becomes law, the Energy Ministry will appoint personnel for the commission which will be headed by a chairman,” said the source. “The NERC will regulate organizations involved in the generation, transmission, distribution and trade of the electricity.” 

The commission will have full authority to fix the power purchase rate for the Nepal Electricity Authority (NEA), the state-owned power utility. It will also set the charges that customers will have to pay to the power utility and replace the existing Electricity Tariff Fixation Commission. 

“The bill contains a provision allowing the commission to fix the electricity tariff after holding a public hearing,” said the source.

According to the bill, the commission will also establish a code that the various entities under its jurisdiction will have to follow.  “The code will specify the standards for the construction of hydropower plants, transmission lines and distribution networks,” said the source. “It will also determine the voltage of electricity that will be supplied to customers.” Independent power producers have welcomed the Cabinet’s decision to forward the much awaited bill to Parliament saying the establishment of such a regulatory institution will cut back the NEA’s monopoly to some extent.