First Business News Portal in English from Nepal
KATHMANDU: The Electricity Regulation Commission has directed Nepal Electricity Authority (NEA) not to charge any hydrology penalty against small hydropower projects with capacity of less than 10 megawatts.
The commission has written a letter to the NEA instructing it not to impose penalty even if such projects fail to generate the projected quantum of electricity.
Electricity producers need to inform the authority about the quantum of electricity they can produce every month. The authority has been imposing a penalty on projects if they fail to generate the stated volume of electricity due to change in the water level in the river.
The commission has repeatedly instructed NEA not to levy penalty on projects that have capacity of less than 10 megawatts. Prior to the recent instruction too, it had issued similar instructions in March. After seven months, the commission has again given the same directive to NEA as the power utility has not implemented the instruction.
With the onset of winter, the flow of water in the river starts decreasing due to which there is possibility of less quantum of electricity being generated than the predicted amount. Therefore, the commission has instructed NEA not to impose penalty on projects with capacity of less than 10 megawatts effective from this winter.
The commission has also mentioned that NEA does not have to compensate electricity producers in case of any damages in the transmission line or substation due to situations that are beyond human control including floods and earthquakes.
As per the commission, it has issued the direction to make the same arrangement for all projects, as small projects are not able to seek compensation even if their outage has been extended for a long time.
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