Nepal Opens National Transmission Grid to Private Sector with Fixed Wheeling Charges
Nepal's Electricity Regulatory Commission has set wheeling charges for private sector access to the national transmission grid, effective fiscal year 2026/27. The move paves the way for private participation in electricity trading under open market policies.
KATHMANDU, Oct 1 — The government has granted the private sector access to the national transmission line by setting criteria for wheeling charges (transmission line fees), paving the way for private participation in electricity trading.
The Ministry of Energy, Water Resources and Irrigation (MoEWRI) announced the decision as part of its broader effort to involve the private sector in electricity trading.
On Thursday, the Electricity Regulatory Commission (ERC), an entity under the Ministry, announced the transmission fees for private sector access to the national transmission line in the presence of Energy Minister Biraj Bhakta Shrestha.
According to ERC Chairperson Ram Prasad Dhital, the fees were determined based on established criteria for calculating transmission charges for the national electricity transmission grid.
Speaking at a press meet, Dhital said the transmission fees for the fiscal year 2026/27 have been set at:
- Rs 413,000 per megawatt per month for medium-term and long-term open access
- Rs 0.57 per kilowatt-hour for short-term open access for using the Nepal Electricity Authority (NEA)'s national transmission grid system
Dhital explained that the ERC determined the fees to allow third parties or the private sector to utilize the electricity transmission system, in line with open market policies.
"The ERC has fixed the fees by applying the calculation method based on the aforementioned criteria, taking into account the NEA's audited financial statements for Fiscal Year 2024/25, as well as the NEA's projected annual revenue requirements for the two consecutive fiscal years," he said.
According to him, third parties or private sector entities exchanging electricity via transmission and distribution lines will be required to pay wheeling charges to the NEA in accordance with the standards and rates prescribed by the ERC. Work is underway to issue separate guidelines regarding the determination of transmission charges for radial and dedicated transmission structures that fall outside the scope of the national transmission grid.
The ERC said it introduced new standards in accordance with the prevailing act and regulations. The commission issued the 'Standards for Calculating Transmission Charges of the National Transmission Grid, 2026,' effective from Thursday. These standards facilitate the determination of transmission charges for using the national transmission grid system, as stipulated in Section 33 of the 'Guidelines on Open Access to Electricity Transmission and Distribution Systems,' endorsed last year.
The calculation of a licensee's annual required revenue for the purpose of determining transmission charges incorporates factors such as:
- Depreciation
- Loan interest
- Employee and operating expenses
- Costs associated with transmission services
- Return on equity investment
- Foreign exchange expenses
- Income tax
According to the standards, when determining transmission charges in accordance with established criteria, the charges shall be set to ensure the full and equitable recovery of the licensee's annual revenue requirement for the use of the transmission system. In addition, the ERC may determine charges for utilizing open access services on the national electricity transmission grid by adopting an appropriate method—based on system capacity and energy flow—such as charges linked to installed capacity (per megawatt) or energy volume (per kilowatt-hour).