Panel plans 18pc hike in power tariff

Panel plans 18pc hike in power tariff

The Electricity Tariff Fixation Commission on Thursday informed the parliamentary Public Accounts Committee that it was mulling hiking the electricity tariff by 18 percent.

Chairman of the commission Jagat Kumar Bhusal told lawmakers that they had concluded a study to jack up the rates. He added that the new tariff would be implemented as soon as the current political situation improved.
“We have put the plan on hold because the people are going through rough times due to the Indian trade embargo and the country is facing a severe power outage.” He said that the decision had to be approved by a majority of the six-member commission.

The Nepal Electricity Authority (NEA) has been seeking to raise the energy tariff for the last one year stating that it was incurring heavy losses. It has asked that the tariff be raised by 10 percent annually.
The last time the commission had adjusted the electricity tariff was in 2012 when the charges were ramped up by 20 percent for the first time in 11 years. However, the NEA said that the hike was too small, and that it would hardly help to offset its ballooning losses.

The commission has also been working on a long-term mechanism under which the power tariff would go up by 5 percent annually. As part of the scheme, the commission is planning to charge different rates during the dry and wet seasons from the next fiscal year.

The commission said that it had been working on a formula which will forecast the price for the particular fiscal year, depending on factors like the consumer price index, inflation, industrial productivity, power purchase agreements signed with independent power producers, impact on power consumers and the exchange rate of the US dollar.

A number of parliamentarians on Thursday criticized the commission for failing to take a timely decision on the electricity tariff. The House panel had summoned officials from the commission and the NEA to discuss the stalemate over charging organizations connected to a dedicated feeder line a premium rate. The committee had criticized the commission for its lethargy.

The commission had asked the NEA to scrap its decision to charge a premium electricity rate for utilizing a dedicated feeder. The NEA had decided to charge a premium through its board meeting.
The commission had intervened stating that only it had jurisdiction over tariff, and that nobody could hike prices without its consent. It had even asked the NEA to return the extra money they had taken from dedicated feeder users from the beginning of the fiscal year.

“Both the authorities have made a mistake. While the NEA should have asked the commission before making such a decision, the commission’s instruction to the NEA to return the money seems to be illogical,” said lawmaker Prakash Sharan Mahat. “The commission should not try to discourage organizations that are willing to pay more.”
“The decision of the commission to tell the NEA to return the premium is dubious. If someone is ready to pay more for the service it is utilizing, it should not be an issue,” said another lawmaker Usha Gurung.
The issue of dedicated feeders came to light after the NEA made a government institution like Bir Hospital pay more for the facililty. “The case of Bir Hospital and other organizations is different. The commission’s blanket decision asking the NEA to return the premium to all users seems to serve the interest of other industries,” Gurung said.

Source: The Kathmandu Post