Nepal Electricity Authority (NEA) has sent a proposal to the Electricity Tariff Fixation Commission (ETFC) to hike electricity tariff to minimise the loss being incurred by the power utility.
The board of NEA has approved the proposal and forwarded it to the commission to adjust the tariff, as NEA has been facing losses due to higher rates at which it purchases power as compared to its selling price. The power utility has proposed to hike tariff as per its Financial Restructuring Plan, which was issued last fiscal to transform the NEA into a profit-generating entity.
According to NEA sources, the power utility has proposed to hike tariff in industrial sector from 10 to 20 per cent. For the industrial sector, the authority has proposed to hike the tariff on demand (load quantum approved by the NEA) by 10 per cent. Industries have to pay minimum charge for the load quantum approved by the power utility whether or not they fully utilise the approved load amount.
Likewise, the NEA has proposed 20 per cent hike in tariff for electricity consumed on top of the approved load quantum. However, different tariffs have been proposed for rural cottage industries, small industries, trading, irrigation, community drinking water and entertainment businesses.
Industrial sector consumes around 37 per cent of the total electricity supplied by the NEA.
Similarly, NEA has proposed to review the slab set for the household users. There are different rates based on the quantum of electricity consumed by the households. The NEA has proposed revising the minimum slab to 20 units from 10 units at present.
“We have proposed to revise the slab for household users instead of revising the tariff,” an official of the Finance Department of NEA, said. Electricity tariff for the households has been determined based on the consumption level. Those who consume more energy have to pay higher tariff than those that consume less electricity.
The ETFC had last revisited the tariff in August last year, raising by 19 per cent for the household users.
As household users consume the largest chunk of electricity supplied by the NEA, the power utility has said that revision in slab for households will cover the current loss of the power utility.
After the ETFC revised the tariff last year and NEA took initiatives to control leakages, the power utility was able to limit its loss to Rs 970 million in the last fiscal, as compared to Rs 8.9 billion in the fiscal 2015-16.
However, the NEA’s cumulative loss is still high at Rs 35.6 billion.
A version of this article appears in print on August 08, 2017 of The Himalayan Times.