The Nepal Electricity Authority (NEA) is trying to sell electricity to Indian power companies stating that there is excess electricity in the country. On the other hand, many Nepali industries are being forced to use diesel generators as they haven't been supplied with electricity by the state-owned power utility or are experiencing power outages on a regular basis. While the country saw the end of load shedding five years ago, the quality of power supplied to the consumers has remained questionable. This is primarily due to the irregular power supply which has left ordinary consumers disgruntled as well as forced industries to bear huge losses due to their operations being hampered.

For instance, more than 500 small and large industries in the Sunsari-Morang Industrial Corridor have fallen victim to irregular supplies of power. This industrial area is observing power outages up to four times a day causing the raw materials that are being processed for manufacturing of products to go to waste and parts of the machines used for production to break. It has been reported that the industries are bearing a loss of Rs 70 million daily due to the power outages and their processing costs have doubled. The losses borne by high power-consuming industries such as cement and steel are much higher compared to other producers. Taking all these problems into account, the industries in the Sunsari-Morang Industrial Corridor are incurring a monthly loss of more than Rs 2 billion. This situation not only persists in the Sunsari-Morang Industrial Corridor but is also prevalent in other industrial areas across the country.

A closer look reveals that political machinations in the hydropower sector are behind the anomalies. NEA officials blame the inadequacy of transmission lines across the country and the poor quality of the existing transmission system for the problems in power supply. But it is the responsibility of NEA to build or update the transmission lines. It is unfortunate that development assistance like the Millennium Challenge Corporation (MCC) Compact, which has been acknowledged as being very important for the construction of transmission lines in the country, has fallen victim to political wrangling over its implementation in Nepal.

So far, the work carried out by Kulman Ghising, who is in his second term as the Executive Director of NEA, also has not been as efficient.  He has not come up with any 'miracle' this time around, particularly in resolving the problems related to the supply of electricity. Ghising, who garnered a lot of admiration for his leadership to end the load shedding five years ago and turn NEA into a profit-making entity, has not done anything significant since the start of his second tenure in August this year. It may be a bit hasty to say it, but there are indications that he may not succeed this time.

Against this backdrop, the recent announcement by the Electricity Regulatory Commission (ERC) to reduce electricity tariffs for households and some commercial purposes is a positive step forward. ERC has also fixed tariff rates for charging electric vehicles and has allowed owners of charging stations to keep up to 20 percent profits. It is commendable that the commission wants to boost electricity consumption. However, it needs to be understood that the quality of the power supply remains the biggest condition for increasing the per capita consumption of electricity in the country.

Madan Lamsal
madanlamsal@gmail.com