Government announces electricity tariff exemption as Ghising takes control

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The government announced a tariff exemption for low-income groups and irrigation facilities the same day Kul Man Ghising returned to the Nepal Electricity Authority as chief executive.

Ghising is credited with putting an end to the problem of daily, hour-long power outages in the country during his previous stint as head of authority.

Energy Minister Pampha Bhusal said on Wednesday that the authority’s board, which she chairs, has decided to provide free electricity to people who use less than 20 devices per month.

“But, a service charge of Rs 30 should be paid,” she said in a press meeting after Ghising’s appointment.

Previously, the ministry had asked the authority to make the necessary arrangements for the tariff exemption.

Bhusal said the cost of the tariff waiver would be 700-750 million rupees.

“The authority will bear this cost itself as a corporate social responsibility,” she said.

Based on this decision, the Electricity Regulatory Commission is expected to make price adjustments soon.

“The decision will be implemented within a month,” Bhusal said.

Once implemented, around 2.1 million consumers will benefit from the program, according to the authority.

This means that around 42% of the authority’s clients will not be required to pay any tariff except Rs 30 as a service charge. As of mid-April, the electricity utility had more than five million customers.

Currently, the government provides free electricity to people with a monthly electricity consumption of up to 10 units, in line with the budget forecast for fiscal year 2020-21. Their number is around 1.3 million, according to the authority.

The authority’s decision came at a time when the authority is expected to lose around Rs 4 billion due to various concessions given to individuals and businesses affected by the pandemic.

The authority’s board of directors also decided to waive the full tariff on electricity used to operate shallow tube wells.

According to Minister Bhusal, 80 percent of the tariff will be waived during peak hours while no tariff will be charged during other hours. The decision is expected to help small farmers and irrigation facilities, benefiting 388,000 households.

According to the board of directors of the authority, up to 80% of electricity tariffs will be exempt for farmers who operate deep tube wells as well as for those who irrigate agricultural land with surface water with elevator technology.

According to Minister Bhusal, up to 50 percent of tariffs will be exempt during peak hours, while farmers will benefit from an 80 percent tariff exemption on other occasions.

This measure is expected to benefit 75,000 households that use deep tube wells to irrigate their farmland.

All fines will be waived for deep tube well users who had not paid electricity charges in the past if they operated the deep tube well and irrigated their farmland, according to the council’s decision.

According to Bhusal, the decision will be implemented by the Irrigation Ministry. She didn’t say when.

The cost of the tariff exemption will be borne by the department itself by reimbursing the electricity distribution body, according to Bhusal.

Bhusal said the authority’s board also decided to make a downward adjustment in tariffs for households using electric ovens.

In the last fiscal year 2020-21, the country imported liquefied petroleum gas worth 36.15 billion rupees, according to the customs department. The government has given subsidies of Rs442 per cylinder of cooking gas. With this subsidy, the government provided a subsidy of around Rs10 billion in cooking gas, according to Bhusal.

The government also aims to promote the use of electricity in transport services. The electricity utility has already awarded a contract for the development of 50 charging stations to promote electric vehicles.

“Tariff discounts will be granted for recharging electric vehicles,” Minister Bhusal announced.

These steps were taken in line with what Ghising suggested in a recent interview with the Post.

Before his appointment as head of the authority, he said at the end of July that electricity consumption could be increased in the areas of cooking, heating and air conditioning by lowering prices.

“We can promote the use of electric ovens in our kitchen. There are also many opportunities to stimulate industrial demand by increasing the capacity of substations and reducing nightly electricity prices to support irrigation projects, ”Ghising said.


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