Dedicated and trunk line: Lal Commission report reveals Rs 22bn dispute

The Ministry of Energy, Water Resources, and Irrigation has released the much-anticipated Lal Commission report, which highlights an arrears dispute of Rs 22bn concerning dedicated and trunk electricity lines. Following a cabinet decision on Sunday, the report was made public on Monday.

The commission, led by former Supreme Court Judge Girish Chandra Lal, was formed in February 2016 to investigate and resolve issues surrounding tariffs for dedicated and trunk lines. The commission submitted its findings in May, and the government has committed to implementing its recommendations.

According to the report, the Nepal Electricity Authority (NEA) charged dedicated and trunk line tariffs prior to formal issuance by the Tariff Determination Commission, combining various billing errors and concessions irregularly. The report spans three main periods, from 2015 to 2020, and outlines issues like unimplemented tariff concessions, mixed billing practices, and non-compliance with Time of Day (TOD) meter billing requirements.

Key findings and recommendations

• Aug 2015-Jan 2016: NEA set tariffs independently for dedicated lines without formal approval, which industrial customers opposed. The report indicates that discount billing during this period was legally questionable.
• Feb 2016-May 2018: During extensive load shedding, NEA set higher tariffs for dedicated and trunk lines, but inconsistently applied these standards. Notices were issued suspending dedicated line services, but the authority continued to bill customers, prompting the commission to recommend recalculations.
• June 2018-July 2020: After load shedding ended in May 2018, the report finds no basis for dedicated and trunk line tariffs, as they were originally intended for uninterrupted power.

Billing irregularities and legal proceedings

The report highlights that NEA’s billing practices—like failing to download data from TOD meters—created complications, leading to increased arrears. It recommends that disputed fees be re-evaluated.

In addressing dispute resolution, the commission notes that 19 of 59 industries have completed the legal process, while others directly approached the district court. Per NEA Act 1984, district courts handle disputes where NEA is a party.

The ministry has expressed a commitment to resolve these long standing arrears, working in coordination with the Tariff Determination Commission to ensure accurate billing and tariff compliance going forward.