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.
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The government move appears to be justified because power tariffs are heavily connected to the overall health of the energy sector. When industries fail to pay what they owe to the government, it really hampers the latter’s ability to maintain infrastructure. It also curtails investment in new power generation, creating obstacles to reliable service. If industries fail to pay bills in time, they keep on piling up. Ultimately, it is the common consumers who suffer through increased power bills or less reliable supply. The government is essentially protecting the larger economic system as well as the interests of common consumers by compelling industries to pay the outstanding power bill. After facing the power cut, the private sector has come up with a proposal to pay the first installment as a deposit, which shows they're willing to move forward. The government needs to respond to this gesture positively by allowing industries to operate after they clear a reasonable portion of dues.
The private sector's proposal demands a delicate balance through which both sides can reach a win-win. Meanwhile, reaching a win-win situation is possible if industries understand the fact that electricity is a service from the government. This service is not a privilege to them. They must not utilize legal loopholes to get a power supply. On the other hand, the government needs to come to its senses that a lengthy closure of industries and rigid payment plans can take a heavy toll on production and employment. It is necessary for both sides to find a middle ground. The proposed 28-installment plan can work if regular payments and audits to settle dues are done with honesty. And the industries should understand that they will have no more excuses, and they must follow discipline and restore trust. When businesses pay on time and the government enforces things fairly, everybody wins. The government's firm stance is understandable, since the energy sector can't afford heavy losses because it will deliver a blow to the energy sector and slow down national progress.
