DR. TY NORIN Chairman - Secretary of State
Electricity Authority of Cambodia.
Can you explain us when and with which purposes was created the Electricity Authority of Cambodia?

EAC is a regulatory body, our function is to issue the regulations and give licenses to power service providers. We also review and set the tariffs and when needed, we resolve the disputes between supplier and consumer, to control and impose the penalty if they are wrong or against the rules. We are fully independent from the government and the ministry.

The Ministry of Industry, Mines and Energy is working with the World Bank and ADB since 1994-1995 to create the Electricity Law. This law has been prepared since 1995, it was approved in 2000 and enforced in February 2001. Under the conditions of that law, a national regulator should be established; that agency is the Electricity Authority of Cambodia (EAC). EAC is supported by loans and technical assistance from the institutions mentioned above and donor countries, which are proposing to reform and liberalize the sector. On this basis, we started to prepare the rules and regulations for the sector. In this role, the EAC stands in the middle of the National interests, the investors' or suppliers' interests and the consumers' interests being all three different. Consumers want cheap electricity with a certain degree of quality; suppliers want to see a return on their investment; and the national interests are developed keeping in mind the whole economy of the country. So we have to find a balance for the three parties.

Can you share with us the main facts and figures of the EAC?

The decision making body of the EAC has three members. For licensing, establishment of tariffs and dispute resolution, I cannot decide by myself; it should be by vote. What concerns the structure of the EAC, there is a board, a chairman and an executive director plus four departments. Currently there are 38 employees, but soon we are going to expand it to a total of 52 employees. Our budget comes from licensing fees. The government sets the fee and we use the fee as our revenue. Currently the amount is 1 riel per kv/h.

As you mentioned, consumers want to have access to cheap electricity. The price of electricity in Cambodia seems to be a major issue, as a regulating body, what does the Electricity Authority do in order to determine and control the tariffs of electricity to better protect the interests of the final consumers?

The price of electricity is indeed a key point for us. Until now we have not started the setting of tariffs. We need to make a few studies because the tariff setting affects all sides. This should be a fair process. ADB will provide technical assistance to make this study. We will then approach the best way to satisfy suppliers and consumers.

Can you give us an average of the current price of electricity in Cambodia?

There are actually three categories or pricing systems. The first group is the consumer in the capital, Phnom Penh, this counts for 80% of the total consumption of electricity in Cambodia and the average price is 0.17 USD per Kw/h. The second category is for the provincial cities where electricity costs 0.25 USD per Kw/h., and finally there is the third category comprising all the rural areas outside the cities, in this case the price fluctuates between 0.40 and 1 USD per Kw/h.

What are then your plans in terms of pricing policy for the next years?

The main problem in Cambodia is the cost of power generation. In Phnom Penh the generation of power costs 13 cents and its distribution 4 cents. What concerns the rural areas, the suppliers for those areas are private entrepreneurs who have their own small generator. The National utilities cannot reach those areas and that is what makes electricity so costly. We are concentrating our efforts into helping to bring down the generation costs in order to achieve lower electricity costs. A simple example is Thailand, they generate by themselves or import from Lao at a cost of about 4 cents and the cost to transmit and distribute to the end user is about 3 cents, making a total cost of 7 cents Kv/h., something that cannot be compared with Cambodia.

One of your main objectives is "to create favourable conditions for capital investment in the commercial operation of the electricity sector". Can you tell us which are or will be those conditions in order to attract investment in the Cambodian electrical sector?

Big consumers like hotels and factories are using their own power generation capacity. How can I attract them to purchase from EDC (Electricité de Cambodge)? The first step is to lower the tariffs in a way that it become more attractive for them to buy power from EDC than generate it themselves. To obtain that, our strategy is to bring in cheap power by connecting our systems to neighboring countries like Vietnam. Then we will offer potential investors bidding opportunities in the energy sector. First we will interconnect the system, then we will increase the amount of users and finally we will propose investment possibilities.

Which parts of the electrical power sector are you more interested into promoting and how do you want to do it?

Now that the implementation plan has been set, we are ready to go ahead; the agreements with Vietnam have been signed and the project to construct the transmission line from Phnom Penh to Vietnam is open for bidding. Now we are handling the process to finance the project. The ADB has agreed to provide financing of a loan for the transmission line. Currently this is being reviewed and in four or five months the bidding will be open.

Renewable energies are getting more and more attention in Cambodia. Which role do they play in the national supply development and which actions are the EAC taking in order to promote their development?

Renewable energy plays an important role in the rural electrification. The people who stay in the rural areas have difficult access to cheap electricity. This could be obtained only by connecting themselves to the national grid. There are two ways to provide less expensive electricity; one is by extending the national grid and the other by developing stand-alone systems. Solar, wind, or micro hydroelectric projects can all be effectively used in such isolated areas. We must speed up and simplify the process of licensing and tariffs setting.

Can you tell us a little bit about yourself and your professional background?

I started working in the Ministry of Industry, Mines and Energy in 1986. After that, I came to Electricité du Cambodge, the national electricity supplier, which at that time was a department of the Ministry. I started to be promoted from young engineer to head of the group, then division, and then head of unit to finally become deputy managing director. After that, in 2001 I was nominated to be the Chairman of the EAC.

What would be your final message to potential investors interested into the energy sector of Cambodia?

One of our functions is to attract investors towards the energy sector in Cambodia. The main subjects an investor wants to know about are the following: First, an investor wants to minimize risk for his investment; Second, all conditions have to be set by the law without changes afterwards as it can affect dramatically in their business plans and third, an investor wants to have clearly stated the rules of the game. Those are the points that the EAC tries to provide.

Electricity Authority of Cambodia (EAC)

The Electricity Authority of Cambodia is a legal public entity, being granted the right from the Royal Government to be an autonomous agency to regulate the electric power service and to govern the relation between the delivery, receiving and use of electricity.

1. Responsibility of Ministry of Industry, Mines and Energy and Electricity Authority of Cambodia in Power Sector

The Ministry of Industry, Mines and Energy (MIME) is responsible for controlling the whole Power Sector. The ministry has the duty to set and administrate: Energy, Policies, Electric Power Strategies, Power Development Plant, technical, safety environmental standard and other duties in power sector.
The Electricity Authority of Cambodia (The Authority) is responsible for controlling the activities of electronic power service and use. The Authority has the duty to issue, revise, revoke or suspend the license for electric power service, to approve tariff, to issue the regulations, to control, to impose penalty and to resolve the disputes related to the electric power services and uses.
2. Power and duties of Authority
Article 7 of Electricity Law provides to the Authority the following powers and duties.

(a) To issue, revise, suspend, revoke, or deny the licenses for the supply of the electricity service as provided in article 29 of this law;

(b) To tariff rates and charges and terms and conditions of electric power service of license, except where the Authority consider those rate or charges and terms and condition are established pursuant to a competitive , market-based process;

(c) To order to implement guidance procedure and standard for investment programs by licensees;

(d) To review the financial activities and cooperate organization structure of licensee to the extent that this activities and organization directly affect the operation for the power sector and the efficiency of electricity supply;

(e) To approve and enforce the performance standard for licensees

(f) To evaluate and resolve consumers complaints and contract disputes involving licensees, to the extend that the complaints and disputes relate to the violation of the conditions of licenses;

(g) To improve and enforce a uniform system of account for all licensees

(h) To Prepare and publish reports of power sector and relevant information received from licensee for the benefit of the Government and the public interest.

(i) To prescribe fee applicable to licensees;

(j) To determine the procedure for informing the public about affairs within its duties, in order to ensure that the Electricity Authority of Cambodia complies with the principle of transparency as set forth in Article 3 of this Law

(k) To issue rule and regulation and to make appropriate order, and to issue temporary and permanent in junction for electric power services;
(l) To impose monetary penalty, disconnect power supply, suspend or revoke the licenses for the violation of this law, standard and regulation of the Electricity Authority of Cambodia;

(M) To require the electric power service and the customer to obey the rule relating to the national energy security, economic, environment, and other Government policies

(N) To performs any other function incidental or consequential to any of the duties as describe above; and

(o) To establish the terms and conditions of employment of the officer or employee including experts/advisor of EAC.

3. The organization of the Authority

Graphic (click here)

The Authority's decisions and approvals on the key issue will be based on the discussion and voting in Board Meeting. Board Meeting is the highest decision making in EAC. Article 21 of Electricity law has prescribed that all members of the Authority shall have the right to vote on all issues which are require the approval from the board. This approval is based on the majority vote.

4. Members of Authority

The Authority consists of three members, including the chairman. The chairman and members are designated and proposed by the Prime Minister and appointed by the Royal Decree. Each member has a three year terms except for the initial term. The term of each member shall be staggered. The chairman's position is equivalent to the rank of a secretary of State and the position of other member of the Authority shall retire from the office when they attain the age of sixty.

5. Missions of Authority The Authority has following missions:

1- Establish a legal and reasonable environment in Power Sector for promoting the fair competition in the electric power business, promoting the long term efficient and quality investment and motivating the private sector to play the role as the inciter of the economic growth.

2- Prtects the right of the users to receive the continuous, qualitative and adequate electric power supply at the reasonable tariff.

3- Establish the competition in where it can be made in Power Sector.

4- Establish the conditions that the supply and use of electric power will be efficient, qualitative, continuous and transparent.

6. Budget of Authority

The Authority has an autonomous budget for its operation. This budget comes from the fees paid to the Authority by applicants and licensees. These fees are called license fee. The Authority shall determine the license fee for each financial year. The maximum license fees shall be determined by Sub-Decree.
The budget of the Authority shall be deposited in an account of a state bank of the right to use this fund. The Authority's expected revenues and expenses. The budget shall clearly state the proposed license fees for the financial year, together with the method of calculating the license fees, and the salaries and other remunerations entitlements to be paid to each of the members and senior staff to the Authority. The Authority shall submit this budget to the Government for review and approval.

7. The Electric power services under empowerment of the Authority through licensing.

The electric power services under empowerment of the Authority through licensing are as follows:
1- Consolidated Services (combination of some or all types of services)
2- Generation Services
3- Transmission Services
4- Distribution Services
5- Dispatch Services (Control Center)
6- Bulk Sale Services (on the transmission)
7- Retail Service (on the Distribution)
8- Subcontract Services.
ELECTRICITY AUTHORITY
OF CAMBODIA

Contacts:
#02, Road No. 282, Sangkat Boeng
Keng kang I, Chamkar Mon District,
Phnom Penh City, Cambodia

Mobile: (855) 12 810817
Office Phone: ( 855) 23217654
Facsimile: (855) 23 214 144
E-mail: norion@eac.gov.kh
Website: www.eac.gov.kh