Lessons from the Loadshedding
After the government declared national electricity crisis on December 16, it and brought out a 35-point action plan to address the situation, there have been four notable developments so far.
First, the country’s private sector has expressed its readiness to pay the market price for the energy (see Biznews, New Business Age, January 2009). Second, the government came up with a proposal to install diesel generators to produce 200 MW of electricity but it quickly shelved the plan after facing a strong opposition from various quarters. Third, Bijendra Lal Joshi of Kathmandu has lodged a case at the Kathmandu District Court demanding compensation for the loss he suffered due to the failure of the Nepal Electricity Authority (NEA) to honour its contractual obligation. Fourth, there have been suggestions to increase the electricity price for both the consumers and independent power producers.
In the light of the above facts, we need to learn a number of lessons.
First, the existing practice of discriminatory pricing in electricity should be abandoned. Uniform pricing, irrespective of whether the electricity is used for household, industrial or agriculture purpose, will encourage efficient use of electricity.
In connection with the proposal to increase electricity price it would be wise to bear in mind that if the price increase is across the board, it will not be accepted by the people. However, if the price for peaking power (during the peak hours of the day and during the peak season of the year) is increased, that may be more acceptable. Any decision in this regard should be such that encourages Nepal Electricity Authority and independent power producers to enhance their operational efficiency and to generate more power.
Second, the end users of electricity (at least in Nepal) are not concerned about the source from where the electricity comes. NEA and its officers, collectively and individually, should be made accountable for any failure to provide uninterrupted electricity supply throughout the day and throughout the year, no matter from which source (thermal, hydro, wind or solar). By providing a connection to the consumer, the NEA has entered into a contract which it must fulfil except in a situation that is especially provided for in the force majuere clause.
Third, as the government has declared a crisis situation (or ‘emergency’), it should sense of urgency to deal with it, as much as one does in the state of emergency. It shouldn't shy away from cutting the power supply to areas which are notorious as ‘power stealing centres’.
Another measure in this connection is to declare the power sector fully open so that specific localities of consumers can enter into purchase contracts with power producers and localities where the power projects can be developed irrespective of the source of the power – be it thermal, solar, wind or hydro.
