NEA gives industries 15-day dues ultimatum

Kulman Ghising, Executive Director of Nepal Electricity Authority (NEA), has announced that industries failing to pay their dedicated and trunk line dues will face power cuts again within 15 days. Ghising stated that although service was temporarily restored based on a Council of Ministers decision, industries were given a 15-day window to settle outstanding dues.

In a press conference on Wednesday, Ghising explained that the government has instructed NEA to collect arrears within this period, requiring industries to pay according to the government’s decision. He maintained that the discounted bills for dedicated and trunk lines are accurate, as they are based on Time of Day (TOD) meters, and clarified that NEA will not issue new bills. Industrialists are expected to settle dues based on the current bills.

Some industrialists have contested the accuracy of these bills, taking the matter to court. However, both the Electricity Regulatory Commission and the Public Accounts Committee, along with other bodies, have upheld the disputed bills as correct, dismissing approximately 90 cases. Ghising reiterated that as NEA is bound by its legal framework as a commission, decisions on such bills should not come from other administrative bodies.

The Electricity Regulatory Commission has instructed NEA to offer installment payments but not reconnect service until the first installment is paid. Despite repeated offers to pay in installments, Ghising claims that industries continue to politicize the issue instead of paying their dues.

Following a three-month grace period without payment, NEA disconnected power to delinquent industries on October 24. The authority reconnected service with a plan for 28 installment payments. As of now, approximately 14 industries have paid their first installment, and NEA has again issued a 15-day ultimatum after a cabinet decision on November 10 to reconnect within 24 hours, collect arrears within 15 days based on TOD meters, and implement the Lal Commission report on the dedicated and trunk line arrears.

The Lal Commission Report, established by former judge Girish Chandra Lal under the Prachanda government, aims to resolve the arrears dispute. In response to the government’s directive, NEA’s board of directors reconnected lines on Tuesday and set a deadline to collect dues within 15 days.

Initially, 339 industries were dedicated trunkline customers, most of whom paid their dues, according to NEA data. Of the remaining 39 industries, seven are under a court-ordered stay, while about 28 have yet to pay any installments. Ghising warned that if dues are not settled within the 15-day period, NEA will initiate the disconnection process once more.

Ghising emphasized the need for a long-term solution to avoid the recurring cycle of disconnections and unpaid dues, noting that NEA's financial health is increasingly at risk. “We cut about 200,000 lines each year for overdue payments, even for as little as Rs 1,000. Due to these arrears, collection rates have dropped from over 95% to around 80-85%. If this continues, NEA’s financial position may reach a critical state,” Ghising said.

According to him, NEA must raise about Rs 10-11 billion in revenue monthly, with Rs 7-8 billion allocated to pay independent power producers under Power Purchase Agreements (PPAs), and Rs 2 billion for administrative and maintenance costs. The reduced budget provided by the government, down from Rs 30 billion to Rs 3-4 billion, is insufficient even to cover taxes.

He noted that NEA circulates about Rs 1.5 billion in the market, significantly impacting the broader economy.