Electricity Regulatory Commission proposes flexible power purchase rates for storage projects

The Electricity Regulatory Commission has proposed a new framework allowing flexible, project-specific power purchase agreement (PPA) rates for reservoir-based hydropower projects. Under the draft directive 2025, PPA rates would be determined based on factors such as depreciation, financing costs, operational expenses, returns, and royalties. Commission Chair Dr Ram Prasad Dhital said the proposal could help attract private investment in large projects like West Seti and Budhi Gandaki, moving away from the current uniform seasonal rates.