Striking Power Balance: A Win-Win for State and Industries

The standoff between the Nepal Electricity Authority (NEA) and large industries over long-overdue electricity payments has reached a breaking point. Following the Energy Ministry’s move, several industries are facing power cuts. The disconnection of the power supply has compelled the private sector to suggest a conditional payment regime. It seems that the government and industries are now feeling the pressure to thrash out an outcome through an agreement. The business community argues that the bills are unfairly calculated and thus necessitate a review, while the government insists that the electricity used through dedicated lines during the load-shedding years must be paid. The issue of tariff payment dates back to 2015, when the NEA introduced premium tariffs for large industries that received uninterrupted power through dedicated feeders and trunk lines. During the power crisis, these industries enjoyed 24/7 electricity while a large number of populations lived in the dark due to long hours of load-shedding. The government reasoning appears justified: that a long, uninterrupted power supply must be repaid with fair tariffs. But as time went on, industries showed unwillingness by raising questions on the tariff rate structure, claiming it was an unfair, unilateral decision. The outstanding dues have now shot up to over Rs 8 billion. Even after several extensions of deadlines, the industries failed to comply with government demands, compelling the NEA to cut the power.