Electricity Regulatory Commission and NEA reach compromise on revenue dispute

Kathmandu, October 31 — Two entities in the energy sector made significant decisions on the same day regarding the trunk and dedicated revenue disputes. The Electricity Regulatory Commission and the board of the Nepal Electricity Authority (NEA) reached a 'win-win' compromise for both the NEA’s management and the industries involved on Wednesday.

During its meeting, the Electricity Regulatory Commission decided to instruct the NEA to determine appropriate installment ratios for the disputed revenue payments and to immediately restore power connections after the first installment is paid. The commission also directed the NEA to make provisions for adjusting any prior payments if the final ruling on pending issues favors the industries.

Following this directive, the NEA board met on Wednesday and decided to set the installment amounts as specified by the commission, allowing connections to be restored after the first installment is paid. Previously, the NEA had connected some industries with a repayment plan of 28 installments. After the commission's direction, this was increased to 56 installments, as confirmed by Suresh Acharya, a member of the NEA board and Secretary of the Ministry of Energy.

The same board meeting also revised the requirement for industries wishing to seek a review of the revenue dispute. Initially, a 25% deposit was needed, but this has now been reduced to 5%.

Due to the previous requirement of paying 25% of the disputed revenue to initiate a review, industries had been reluctant to pursue this process. A review committee will be formed within the NEA for this purpose, and industries can only approach the court if they are unsatisfied with the committee's decision. Without pursuing a review, industries faced the risk of losing their cases in court.

The decisions came after the government and NEA management faced off over the electricity revenue dispute. A few days ago, Energy, Water Resources, and Irrigation Minister Deepak Khadka indicated in an interview that a compromise would be sought to facilitate judicial reviews for industries while also allowing for revenue collection.

This decision appears to favor the NEA management regarding whether to collect revenue or not, while also allowing industries to engage in reviews with significantly reduced deposits. Recently, the NEA cut power connections for 34 industries due to the ongoing revenue dispute. Some industries had previously connected under the 28-installment plan, while many still have their power disconnected.