Hydro license fee hiked

The government has enforced massive increments in license fees for hydropower projects by effecting changes in the fee appendix of Electricity Regulation 1993.
According to the amended Regulation, prospective hydropower developers will now have to pay survey license fees in the range of Rs 50,000 to Rs 2 million per annum for projects ranging in size from one megawatt (MW) to more than 500 MWs. This is a massive increment compared to the old fee structure of Rs 125 to Rs 750. Survey licenses, which require annual renewal, can be extended not more than four times.

Similarly, prospective developers will have to pay a one-time construction license fee in the range of Rs 100,000 to Rs 5 million for projects ranging in size from one MW to over 1,000 MWs.

This is also a heavy increment from the previous fee of Rs 3,000 to less than Rs 100,000. For projects developed to sell power in the country, construction licenses are issued for a 35-year period, while for export oriented projects, construction licenses are issued for a 30-year period. After the expiry of the licenses, the projects will have to be handed over to the government.

"All new license seekers will now have to pay according to the new fee structure," said Anup Kumar Upadhyay, joint secretary at the Ministry of Water Resources (MoWR). "Existing licensees will also have to pay fees accordingly when they opt to renew their licenses," Upadhyay added.

As of June 15 this year, the government had issued 141 project survey licenses to prospective developers for projects ranging from one megawatt (MW) to 400 MWs, according to Department of Electricity Development. Combined, these projects have a total capacity to generate over 4,000 MWs of electricity.

Extension of the validity of survey licenses will depend on progress achieved according to the work schedule committed at the time of acquiring license. "If work progress is not satisfactory, the license can be revoked," Upadhyay said.

The government has hiked the license fees to ensure that survey license holders achieve work progress according to their commitment. The old license fees saw many parties acquiring licenses but not conducting surveys.

Under the new provision, survey licenses for projects in the range of one to five MWs is Rs 50,000 per year, while it is Rs 10,000 per MW per year for projects in the range of five to 100 MWs. The fee is Rs 1 million per year for projects of 100 MW to 500 MW in size, and it is Rs 2 million per year for projects above 500 MW in size.

Meanwhile, the one-time construction license fee for projects of the size 1 MW to 5 MW is Rs 100,000. The fee for projects of size 5 MW to 100 MW is Rs 500,000; fee for projects of size 100 MW to 500 MW is Rs 1 million; fee for projects of size 500 MW to 1000 MW is Rs 2.5 million; while fee for projects above 1000 MW in size is Rs 5 million.