Government Mulling Neutral Electricity Regulatory Authority

The government is proposing to establish an independent electricity authority to regulate the country’s power supply in an effort to encourage more competition and reduce prices, government officials and a parliamentarian said Tuesday.

The plan is contained in draft legislation, which has been approved by the Council of Min­isters and soon will be reviewed by a National Assembly permanent committee in charge of industry affairs.

“This law is the most important matter for our committee,” Com­mittee Chair Son Chhay said, asserting that an independent authority will encourage fair competition and transparent management. “We’d like to review the draft during the break to make sure it will be passed by the National Assembly when the session resumes [in October].”

The draft, written by the Min­istry of Industry, Mines and Energy, was submitted to the Assembly last week after being approved recently by the government’s cabinet, officials said.

According to the draft bill, the authority will be an independent, neutral public entity that regulates power from generation to distribution, issues utility licenses and sets electric rates, said Tun Lean, acting director of the Industry Ministry’s energy department. The concept has the support of the World Bank.

lates power from generation to distribution, issues utility licenses and sets electric rates, said Tun Lean, acting director of the Industry Ministry’s energy department. The concept has the support of the World Bank.

The draft calls for Prime Minister Hun Sen to appoint a politically-neutral chairman for the authority’s three-member executive board.

Tun Lean said that transferring control of pricing and licensing from the government to a politically and financially independent body would lead to fair and transparent management.

The proposed law also would allow private power suppliers to generate electricity and distribute it directly to consumers, Tun Lean said. “We hope consumer prices will be reduced,” he said.             Most of the country’s 120 megawatt power supply is distributed by Electricite du Cambodge, a state-owned utility that is partly privatized.

In Phnom Penh, 35 megawatts of the 65 megawatts supplied are generated by a private provider, Cambodia Utility Power Ltd, sold to EdC and then distributed to consumers, according to the ministry.

EdC also controls power supply in Kompong Cham, Siem Reap and Sihanoukville. In other provinces, the Industry Ministry manages electricity distribution in conjunction with small local power providers, officials said.

Son Chhay maintained that corruption and mismanagement of power will be reduced once the law becomes effective.

“We have received lots of complaints about cheating power meters or misuse of electricity by authorities,” Son Chhay said. “We will make sure those practices would be reduced by making power control more transparent.”

Ty Norin, executive director of EdC’s planning and projects, sees the establishment of an independent regulatory body as an incentive to be more competitive.

“The law is aimed at making the power sector open to private [entities] to improve public services,” he said. “We’re comfortable and happy with this.”

Nhem Thavy, general director of the private provider Cambodia Utility Power, applauded the basic idea of the legislation. But he expressed concerns over some provisions.

He noted that the new law would restrict power distribution to suppliers that can afford to install transmission lines. Instead, he said, there should be provisions allowing power wholesalers to compete in distributing power. “The law should create a good open market,” he said.

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