Increase in power purchase cost doubles NEA’s loss to Rs 11.79bn

Kathmandu, August 17

Nepal Electricity Authority’s annual loss more than doubled in the last fiscal to reach a staggering Rs 11.79 billion as compared to the previous fiscal year due to increase in power purchase cost of the government-owned entity.

NEA — the single power off-taker of the country — spent Rs 24.24 billion to purchase electricity from independent power producers and India in fiscal 2015-16, as compared to Rs 19.21 billion in the fiscal before. NEA generated Rs 31.55 billion from sales of electricity in last fiscal. However, it paid 75.24 per cent of its net sales revenue to its suppliers, according to NEA.

NEA’s balance sheet has been splattered in red since fiscal 2007-08 as its power purchase cost started to rise. NEA had faced total loss worth Rs 5.13 billion in fiscal 2014-15.

According to NEA, its loss will be minimised slightly in this fiscal as the Electricity Tariff Fixation Commission has hiked the electricity tariff by an average of 19 per cent since the beginning of this fiscal. Adjustment in electricity tariff is expected to contribute Rs five billion to NEA’s revenue.

This may help lessen the gap in selling and purchasing price of energy, including the electricity being imported from neighbouring India. NEA is making preparations to import more electricity from India to minimise load-shedding hours in the country.

Currently, the country has total installed capacity of 802 megawatts. However, since the generation capacity of run-of-river projects declines in winter season, the country has been facing severe power crisis during the dry season.

Along with the completion of Dhalkebar-Muzaffarpur cross-border transmission line project, NEA is preparing to import additional 120 MW of electricity on top of around 80 MW at present.

NEA is also expecting the 30 MW Chameliya Hydroelectric Project and 14 MW Kulekhani III Hydroelectric Project to start commissioning power by the end of this year and beginning of 2017, respectively.

NEA’s consumer base went up by around five per cent in last fiscal to 2.97 million, of whom 94.18 per cent are domestic consumers. In terms of revenue generation, 31.13 per cent of its revenue is generated from industrial sector, 45.96 per cent from households and remaining 22.91 per cent from other sectors, as per NEA.

NEA has requested the government to compensate the loss accrued due to wide gap in purchasing and selling price of electricity imported from India.

Maintain efficiency, says minister

KATHMANDU: Minister for Energy Janardan Sharma has stated that NEA will not be able to continue its operations for long, considering its status quo of ballooning losses every passing year. He instructed NEA to maintain efficiency, control rampant leakage of electricity and adopt other possible means to minimise its loss. Speaking during the 31st anniversary function of NEA, Minister Sharma also directed the authority to stop supplying power to big customers who have huge dues with NEA.