Nepal | March 28, 2020

Industrial sector power tariff hike on the cards

Umesh Poudel

Kathmandu, May 9

Nepal Electricity Authority is mulling over hiking the tariff charged for electricity supplied to industrial consumers, as it has been facing a huge loss due to the gap between the price at which it purchases electricity from hydel developers and the rate at which it sells power.

NEA has argued that since it has been facing a loss, it needs to raise electricity tariff for the industrial sector to maintain its financial health.

NEA charges an average of Rs 6.50 per unit from industrial, service and manufacturing sector, but has to pay Rs 7.50 per unit while purchasing electricity from independent power producers.

As a result, the power utility has been facing a loss of one rupee per unit or 13.33 per cent on the sale of electricity to the industrial sector.

Earlier, the Electricity Tariff Fixation Committee had fixed separate rates for industries — Rs 9.30 per unit during peak hours, Rs 7.50 per unit for normal hours and Rs 4.15 per unit for off-peak hours.

NEA needs to hike tariff for the industrial sector by at least one rupee per unit.

“We’ve drafted new tariff for industrial sector users. It will soon be forwarded to newly formed Electricity Regulatory Commission,” said NEA Managing Director Kul Man Ghising.

“There is no doubt that the industrial sector should get cheaper and reliable power supply to minimise the cost of production.

However, NEA cannot keep supplying cheap power unless the government subsidises electricity for the industrial sector.”

NEA has been supplying ‘round-the-clock’ electricity imported from India to industries since last year. Ghising said the power utility’s loss will rise if the tariff is not adjusted accordingly.

“Since we failed to adjust the tariff in a timely manner, NEA has suffered a loss of Rs 17 billion since fiscal 2008-09,” he added. He said NEA managing directors prior to his appointment had provided electricity to industries at their own discretion.

“We have formed a committee to calculate the exact figure that industries should have paid since 2008-09 if due process was followed.”

However on Tuesday, the country’s three leading private sector umbrella organisations had said that they would not pay the additional fee that NEA had decided to impose on industries.

NEA had forwarded a letter to more than 250 factories that have been availing additional electricity through a trunk line asking them to pay the additional amount for the energy consumed by those industries since the fiscal 2016-17.

According to NEA, the additional amount that industries have not paid for power consumed through the trunk line stands at Rs 4.3 billion since the fiscal 2013-14. “The due amount that the private industrial sector will have to pay could increase to Rs 10 billion after the committee finalises its report,” said Hara Raj Neupane, deputy managing director at NEA.

“If the ‘big’ consumers fail to pay the electricity tariff on time after the committee has finalised its report, we will cut their power supply,” Neupane added.

A version of this article appears in print on May 10, 2019 of The Himalayan Times.

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