NEA mulls power tariff hike to cover losses

Kathmandu, August 18:

Nepal Electricity Authority (NEA) might hike electricity tariff to gradually recover accumulated losses, reduce loss and create fund for hydropower development.

“A 15 per cent hike in electricity tariff may balance losses,” Arjun Kumar Karki, managing director of NEA said adding that it is yet to be allowed to adjust tariff to make up for hiked operation cost.

According to a provisional analysis, NEA power system endured a loss of 25.15 per cent in the fiscal year 2007-08. In the preceding year, the final loss figure stood at 26.71 per cent. “NEA earned Rs 15,405.03 million from sale of electricity in 2007-08, which is 6.61 per cent higher than last year’s figure. It earned Rs 655.24 million as other income,” he added.

NEA has incurred a net loss of Rs 1312.16 million after deducting interest, foreign exchange loss and provisions. However, it earned a profit of Rs 314.19 million the preceding year. “Accumulated loss by the end of 2007-08 has reached Rs 7133.77 million,” Karki said.

Currently, NEA’s cost of service per KHh is Rs 7.4 against Rs 6.7 income per KWh.

After adjustment of the contribution of Rs 0.28 per KWh from miscellaneous sources of income, NEA suffered loss of Rs 0.42 per KWh sold.

Presenting NEA’s brief accounts during its 23rd anniversary, Karki regretted that there were long spells of load shedding. Energy demand over the fiscal year totalled 3,490.12 GWh. As this amount of energy was not available with the system, the deficit amounting to 309.46 GWh, had to be offloaded to keep the electricity service running.

“At present, there is a growth of 11.31 per cent during peak power demand and 10.76 per cent growth in the energy demand last year aggravated the situation,” he added. In dry months, NEA imposed 48 hours a week load shedding.

At the end of fiscal year 2007-08, NEA has 1,524,610 customers, an increase of 9.07 per cent over that of the previous year. Of the total customers, 95.66 per cent belong to the domestic category accounting for 40.52 per cent of total energy sales that earned NEA 40.66 per cent of the total revenue.

Industrial customers represent only 1.67 per cent of total customers, but contributed 38.81 per cent of the total energy sales that is 35.93 per cent of total revenue earned by the NEA.

Power and energy demand grew by 11.31 per cent and 10.76 per cent respectively in the reviews period, he said.

During the period, major overhauling and maintenance works like servicing of turbines at the Marsyangdi, Trishuli, Sunkoshi and Puwa Khola hydropower stations were also done.

The damaged generator of unit 1 of Kulekhani-II hydropower station was repaired under the supervision of experts from Fuji Electric Sytems Co Ltd (Japan). Overhaul and repairs at Kali Gandaki, the biggest power station of Nepal, was also completed successfully by NEA engineers.

“Though our present is troubled with supply shortage, the prognosis for the future is not bleak,” Shankar Prasad Koirala, water resources secretary said.