Electricity regulator open to revising transmission wheeling charge

The Electricity Regulatory Commission has signaled it could revise the wheeling charge levied for using the national transmission grid as needed.

Speaking at a Friday Forum organized by the Independent Power Producers' Association, Nepal (IPPAN), commission chair Ram Prasad Dhital said the current transmission charge of 57 paisa per unit was set as a simple model for the initial phase. He said future charges would be determined by looking at the actual cost of the system, transmission distance and the volume of power flow.

Chairman Dhital said preparations are underway to create separate rates based on megawatt capacity and distance in kilometers for radial lines that carry one-way flow. He said the commission is positive about bringing the private sector into electricity trading to increase competition and provide cheaper power to consumers.

IPPAN chair Mohan Dangi warned that if the current charge is not practical, it would weaken the financial position of projects. He said a project earning about Rs 30 million a year per megawatt, but having to pay nearly Rs 5 million of that in transmission charges alone, suffers a major impact on returns. To meet the target of 30,000 MW of production in the next decade, Dangi urged the government to speed up power purchase agreements for projects waiting in queue and to grant electricity trading licenses to the 11 companies that have applied for them.