Co-operative Concepts In Rural Electrification
By Er.Prabal Adhikari firstname.lastname@example.org
About 88% of Nepal’s
Population remains in the villages and only about 15% Nepaleses have become
fortunate to use the electric power so far. As such, the focus on effective
measures to be galloped in the rural electrification can hardly be deprecated.
Although we have spent a huge quantum of money in rural electrification, we must accept the bitter truth, though unwillingly, that we have become unable to address the real problems of commercialization in this field so far. Long distribution lines in rural areas beyond standards, direct hooking and other fraudulent practices of energy pilferage have made our whole episode of endeavour in rural electrification starkly weak and unproductive. If we are about to develop suitable and sustainable models associated with electric distribution in villages, we must be very careful that our models are neither too detailed and sophisticated nor too simple for reliable and qualitative performance.
If we are committed to rural electrification, the only excellent choice
is the implementation of co-operative concept, which can ensure the benefits of
electricity to rural people as well as the utility.
Funding these co-operative projects and giving them all sorts of
technical assistance and legal support will certainly encourage the rural people
to use electricity as a means of enhancing the quality of life and the
well-being of the society.
The co-operative model is extremely required to draw good outcome from
the rural electrification so that it would take its course in the genuine favor
of public health, education, industrialization and job opportunities leading to
the elevation of the rural living standard.
Rural electric co-operative models should be, beyond doubts, an integral
part of the national energy policies and distribution system.
is electric co-operative Concept, in fact?
In fact, it is a socialistic approach to make people responsible for
local management of electric energy distribution by the process of
The co-operative concept in energy management may also be called
democracy partnership comprising of diverse civil societies scattered throughout
the villages of the country.
Unlike other co-operatives, electric co-operatives are not profit-driven
basically. They exist primarily to provide service to their consumers. In fact,
it is not merely a users’ organization, but it is a way of life in which
economic activity attains momentum by self-managing and distributing the
electrical energy for their own benefits.
It is also a concept of competitive marketplace particularly in the
distribution sector of electricity. It should operate on sound business policies
and practices although it is basically a not-for-profit organization as already
Essentials of electric co-operatives
Open and voluntary membership to power consumers.
Transparency and accountability
Democratic control or mutually agreeable decisions
Return of surplus or savings, if any, to members
Subjective and field-oriented trainings on electricity distribution
system and general safety rules.
Urgent need of its
implementation in Nepal
All our activities in power sector reform are lying in cold storage due
to lack of proper punishment-reward scheme. In our present case, both are
equally right: we are honest at the work assigned
and yet nobody encourages; we are fraudulent and still nobody bothers. This
trend has completely eroded the work culture in Nepalese offices and so is the
case with our electrical sector also. A work culture cannot be established
without motivating components involved with it. The co-operative model deserves
the capability of self-motivation and the system of reward and punishment will
automatically be set up to come into effect since all its consumers are the
genuine bearers, and the bearers know where the shoe pinches.
Use of ABC cables in rural electrification to control direct hooking from
LT lines has been a subject which is proposed a lot and practiced very little
although there may be many reasons after it. However, it is true that
electricity business cannot be elevated without reducing system loss to an
acceptable limit. Reducing the loss will ever be an uphill task to the Nepal
Electricity Authority (NEA) unless the village people wake up themselves with a
sense of collective responsibility for constant vigilance.
Lack of honesty at work and the financial indiscipline within the
organization is the major cause to degrade the fate of any utility. To certain
extent, even we are afraid of being exposed. The practice of co-operative models
in rural electrification immediately flourishes an era of transparency and
public exposure in all activities related to the power distribution. Certainly,
time has come to introduce effective reform programs associated with rural
electrification for the sake of corruption control. This is possible by means of
co-operative societies only and it’s high time to launch them.
In Nepal’s present context, a rural electric co-operative’s concept
will also help combat domestic violence and develop village-level alternative
dispute resolution trend by providing them a joint forum to work together for
the common cause of local development. Rural electric co-operative will be very
poplar program in Nepal because people of all political spectrums can work
together in such co-operative models by calling it whatever they prefer like
“Abhno Gaun Aphain Banaun ( United Marxists & Leninists’ Let’s- Make
-Our –Villages- by -Ourselves Program)”, “Garibsanga Bishweshwar (Nepali
Congress’s popular program ,
Bishweseshwar Prasad Koirala- with- the- Poor)” or “Gaun Pharka Abhiyan (Old
partyless Panchayat System’s slogan-based program Let’s- Turn- to- Villages)
”. For all this to kick off, the nation should not only advocate the
need of such co-operatives, but also devise good legislative and administrative
strategies required for their smooth operation.
for co-operatives in rural electrification
Rural electrification in Nepal should go ahead with the co-operative
concepts as practised by other developing countries with backgrounds similar to
Nepal and also in the developed countries like the USA, because -
Rural electrification has been a sad experience in Nepal with high
investment and low return, thereby not operating in a financially sustainable
manner in itself.
There are high distribution losses since rural feeders are normally too
long with enough voltage drops below the standards, backed by undue political
pressure to stretch them farther and farther. Implementation of the rural
electrification design is usually guided by the exciting political mathematics
rather then by the engineering mathematics.
Direct hooking from the
nearby LT lines and other kinds of electricity theft have caused rural system
loss to be quite formidable to fight.
Difficulty in periodic
vigilance due to remote and uncomfortable location of villages has revealed the
necessity of local electric co-operatives.
Revenue collection percentage is very poor in rural sectors.
Ordinary rural people are economically, socially and even politically
suppressed and hence they are not involved in the decision-making roles in key
processes of social transformation. Electric co-operatives may serve as their
homes where all of them are treated as equally rightful members and hence
discharge their duties seriously as their own household tasks.
All consumers involved in the co-operative service will develop
corruption-free system due to well-coordinated check and balance.
Our movement in the business of electricity so far is like that of a ship
in stormy ocean, knowing no destination where to harbor. Modern electric
co-operatives follow a straight-forward path only, since they are chosen to work
upon the performance target basis, a concept which the NEA is about to practice
in some of its distribution branches as Distribution Centers with a certain
degree of autonomy to them.
Present procedural measures to receive electricity connections have added
much to the inconvenience for villagers. For example, we ask them to submit the
attested copies of certificates pertaining to land, citizenship, etc. to get new
lines. An Illiterate villager may choose better not to take a meter connection
than to undergo all such difficult tests.
from Bangladeshi co-operatives and others
Bangladesh has achieved a grand, admirable success in rural
electrification by adopting US-based co-operative models upon the consulting
services provided by the NRECA International.
It led to the creation of a Rural Electrification Board (REB), which
forms the co-operative Board of Directors (PBS Board) from the locals of various
sectors including two women advisors also. REB has the right to dissolve the PBS
Board at any time for its non-performance or fraudulent practices, if any. There
are 67 rural electric co-operatives, called the Palli Bidyut Samities (PBS),
instituted to function in different rural areas of Bangladesh. REB invests in
transformers and transmission/distribution lines. In PBS, all consumers are its
members. Nevertheless, employees are employed on annual contract basis and there
is the total ban on the formation of Trade Union / CBA since such activities are
believed to destroy the working environment of the co-operatives.
Since too many cooks may
sometimes spoil the food, REB always stands with the role of a watchdog to
confirm that nothing wrong has gone with the PBS anywhere. More then 60 lakhs
rural people are benefited from the PBS services and system loss has
significantly fallen down.
NRECA’s other example of success in rural electric co-operatives can be
observed in Guatemala, where the co-operative was developed as a pilot project,
“Electricity for Progress.”
In Sri Lanka, all village hydro development units are operating as
co-operatives without any concern to the Celon Electricity Board. They take
membership fees and distribute the power generated to its members on no-tariff
In India, 33 rural co-operatives, called RECS, are operating quit
Before replicating any models, it will be wise to visit and study them to
find whether they will be applicable to our country or not.
& Small hydro in Co-Operative ring
Large hydro projects, as experience has taught, cannot be judged as
suitable models of power exploitation for us as per Nepal’s economic status,
security measures and difficulty in national grid extension. All small-scale
generations, at some particular phase of the development, should be allowed to
enter into the ring of electric co-operatives. The Government of Nepal is
required to issue clear guidelines and streamlining processes regarding it.
Besides such guidelines and policy-framings, there must be a workable
understanding among the Government, the co-operatives and the local power
Local generations should come up to form a separate rural grid as far as
possible so that rural co-operatives would find it easy for control. If we aim
at extending the national grid only to all our rural areas, we will simply reach
the goalpost of fiasco.
Cost-effective and environment-friendly electricity generations at Pico /
micro / mini or small scale need to be prioritized in villages and operated as
franchise-full co-operatives to distribute the power to the people of such
remote areas. So far in Nepal, we have practiced various combinations such as
grid-connected rural electricity generation and distribution as well as off-grid
rural generation and off-grid integrated supply system. There are quite a large
number of micro hydro projects currently functioning for villages and thus the
scope of electric co-operatives in rural areas is certainly very wide.
Proposed Electric Models for Nepal
The co-operative concept in Nepal’s rural electrification is suggested
to be implemented and completed in the following three phases, each of them as a
model in itself:
Selling bulk power to registered co-operatives:
NEA reserves the right of generation, transmission and distribution with
itself and only sells the bulk power to a registered electric co -operative at a
suitable rate. The co-operatives issue the membership to its villagers and power
is sold to them at reasonable rate as per guidelines provided. However, major
maintenance works of the distribution network are to be performed by the NEA
In this first phase, co-operatives are not allowed to look after the
distribution network because they are still raw and not experienced, lacking
adequate technical knowledge, trainings or the efficient workmanship. We may
even call it a warm-up period, requiring a lot to acquire and observe. However,
NEA treats it as a bulk consumer, and all our consumers of that particular area
then maintain the commercial relationship with the co-operative only.
Villagers themselves will be active to eliminate direct hooking and other
types of energy thefts. Consequently, the system loss will be decreased. Still
another significant achievement for the NEA will be increase in revenue
collection which helps to boost its economic status.
New service connections, metering, billing, revenue collection and theft vigilance in the rural areas take place smoothly under the co-operative’s management. The era of the old and long-existing mentality that consumers should run after us for their grievances gets virtually terminated and the consumers’ satisfaction comes out.
Phase II : Handing over LT tines and distribution system along with bulk
There should be some mechanism through which the rural electric
co-operatives are adequately funded. The Government should allocate the budget
directly to reach the co-operatives and the donors’ assistance may be very
helpful for it. This second model gives the franchise to sell the electric power
purchased from the NEA to its member and to perform all necessary works of
maintenance regarding lines and transformers. The Government may nominate its
representative also for these co-operatives. Part of the funds available needs
to be spent in the trainings of their employees and these co-operatives are not
expected to produce the electricity by themselves or buy it directly from the
Phase III: Offering greater
autonomy to electric co-operatives:
The rural electric co-operatives will be assigned the following
Construction of new distribution liner or extension of the existing ones
with prior approval from the concerned authority.
Maintenance of the electric network within their areas.
Purchase grid power from the NEA or off-grid power directly from IPPs.
Generate electricity up to small scale by themselves.
If more then
one co-operatives are formed in the same rural area, there will take place an
internal competition based on locking in prices, service conditions etc. among
all such market participants and the access to the transmission and distribution
network is ensured to them on a non-discriminatory basis.
should develop funding strategies to these co-operatives and there should be
formed Bangladeshi Rural Electricity Board-like body to assist them in
fulfilling their primary requirement.
However, the Government should be prepared to take new responsibilities
them such as providing necessary information to these co-operatives and guarding
the rural people against the abuses of marker power.
proposed models may anytime be viewed as independent models and my even be
applied without the sequence above if we are sure that we can succeed directly
at the higher stage.
Studies of south Lalitpur
Rural Electric co-operative and Lamjung Electricity Association may be quite
relevant to earn some Nepalese experiences in the concerned field.
blindly replicate the foreign electric cooperative models without any suitable
modification in them. It is advisable to implement the concept of rural electric
co-operatives as pilot projects in some districts only at the first trial. After
they are known to have achieved success as per targets, they should be carried
out in other districts of the country to make rural electrification really a
fruitful experience in Nepal.
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