KATHMANDU: On Thursday night, the Nepal Electricity Authority (NEA) disconnected power lines to 34 industries due to their failure to pay dedicated and trunk line fees by the deadline.
This action is not unprecedented; the Authority has previously cut lines to industries over overdue premium tariffs.
Despite ongoing reminders for payment, many industries were granted extensions after legal proceedings, responding to requests from industrialists.
On October 10, the NEA notified 49 industries to settle their arrears by October 24.
The Authority also offered the option to pay outstanding amounts in up to eight installments for those in arrears.
However, by the end of the deadline, 41 industries had still not complied.
Consequently, on Thursday evening, the Authority disconnected power to the 34 industries that had not paid, with the exception of those involved in ongoing court cases.
According to the Electricity Authority, 57 industries that utilized 24-hour electricity from dedicated lines during 28 months of load shedding owe a total of approximately NPR 8.4 billion in premium fees, plus additional charges, calculated up to the first week of July.
However, the cabinet meeting held on Thursday did not produce any resolutions to address the issue, indicating a lack of seriousness from the government regarding the critical matter of industry closures.
Following influence from industrialists on the Prime Minister and the CPN-UML Chairman, KP Oli’s government appointed Kulman Ghising as Managing Director of the NEA, alongside other departments.
Efforts were made through the Public Accounts Committee (PAC), chaired by MP Rishikesh Pokharel of the UML party.
However, the ruling party, Nepali Congress, and opposition parties opposed the government’s actions, leading to hesitance among Prime Minister Oli, PAC Chairman Pokharel, and Energy Minister Deepak Khadka.
After a confrontation with the Prime Minister, the NEA issued a notice on October 10, extending the deadline for premium fee payments.
Despite this extension, industries failed to pay, prompting the Authority to cut the lines.
Following confirmation of the disconnections, eight industries began paying their arrears in installments from Thursday to Friday.
Spokesperson Chandan Kumar Ghosh reported that only 32 industries have been disconnected thus far.
Numerous large industries have shut down due to disputes over premium tariffs for electricity from dedicated feeders and trunk lines, affecting thousands of workers.
The government has not played a significant role in resolving conflicts between industrialists and the Authority, exacerbating the issue due to lobbying pressures to waive outstanding tariffs.
Divided responses among industrialists
Following the Authority’s announcement of the deadline, industrialists who had not paid their dues became divided.
Despite the ongoing disputes, the Authority allowed for either full payment or installment options.
As a result, eight industry operators have started paying their premium fees in installments.
According to Spokesperson Ghosh, discussions are ongoing with the remaining industrialists, and those who have coordinated with the Authority have not had their power cut.
“Out of the outstanding bills, 34 industries have been disconnected, but eight have agreed to pay in installments, so their lines remain active,” Ghosh explained.
The Authority has also refrained from disconnecting two government enterprises whose cases are still pending in court.
Dues based on Lal Commission Report: Ghosh
In its notification, the Nepal Electricity Authority sought to collect arrears dating from February 2016 to May 2018, amounting to over rs eight billion, including fines.
The previous government, led by Pushpa Kamal Dahal ‘Prachanda’, formed the Electricity Tariff Dispute Resolution Commission, under former Supreme Court judge Girishchandra Lal.
This Commission divided the arrears of industrialists into three categories.
According to the Commission, there was a period from July 2072 to December 2072 during which the Tariff Determination Commission did not set electricity tariffs, and another period from September 2015 to Januaru 2016 when tariffs were already established.
According to spokesperson Chandan Kumar Ghosh, the Nepal Electricity Authority is now demanding additional dues for dedicated feeders and trunk lines for the period from Poush 2072 to Baisakh 2075, as outlined in the Lal Commission’s report.
Following the Red Commission’s submission, the Prachanda-led government issued a circular to the Ministry of Energy, Water Resources, and Irrigation, instructing the collection of these additional fees from industries for the specified period.
Since the previous period is currently under court consideration and the most recent period has ended load shedding, the government has been advised not to impose additional charges for these two time frames.
However, the details of the Red Commission’s report have yet to be made public.
Industry calls for line reconnection
On Friday, the FNCCI issued a statement addressing the disconnection of power lines by the Authority.
The industrialists expressed their willingness to pay the additional fees based on documented electricity consumption and urged for a resolution to this long-standing issue.
Similarly, the Morang Industry Trade Association has demanded the immediate implementation of the Red Commission’s report, asserting that industries were disconnected without adequate evidence.
The dispute over electricity bill arrears has persisted since 2007, with decisions rendered by the District Court and the High Court.
Additionally, the Federal Parliament Committee, the Authority, and the Accounts General have all made recommendations.
The Board of Directors of the Nepal Electricity Authority and the Regulatory Commission have also issued conflicting decisions on this matter.
Currently, the tariff case involving seven industries remains under court review, a dispute that has pitted the Authority against industrialists.
A sub-committee led by former Nepali Congress MP Minendra Rizal also prepared a report after conducting an investigation, but the conflict remains unresolved.
Despite the Prachanda-led government’s formation of the commission and issuing instructions to collect additional fees, the report itself has not been made public.
The subsequent political upheaval led to the government’s collapse, and the Public Accounts Committee of Parliament then took up the issue.
The Authority submitted extensive documentation to the committee, yet the controversy has continued, with attention focused on suspending the Authority’s executive head rather than resolving the underlying issues.
In a board meeting held Thursday morning, no decision was reached regarding the disconnection of industry power lines.
However, later that evening, the Authority proceeded to cut off electricity to several large industries due to outstanding dues.
Kulman Ghising, Managing Director of the Authority, stated that the Council of Ministers should provide guidance on whether or not to disconnect power to industries with unpaid debts.
This matter was brought up by Energy, Water Resources, and Irrigation Minister Deepak Khadka during the Council of Ministers meeting.
The Electricity Regulatory Commission had decided to implement the circular issued by the Prachanda-led Council of Ministers and communicated this to the Authority.
However, the cabinet meeting held on Thursday did not produce any resolutions to address the issue, indicating a lack of seriousness from the government regarding the critical matter of industry closures.
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