ETFC seeks feedback on proposed power tariff hike



    Course dollar increaseWith the Nepal Electricity Authority ( NEA ) seeking 20 percent hike in electricity tariff, the Electricity Tariff Fixation Committee (ETFC) has sought feedback from consumers.

    In a public notice, ETFC on Wednesday asked the consumers to send in their opinion, suggestions and comments on the NEA proposal. “We have received an NEA proposal for a 20 percent hike in power tariff,” read the notice.

    “Currently, we are carrying out a study and consultations on the NEA proposal.”

    ETFC Chairman Ganesh Prasad Subba said the committee will make the next move based on the suggestions from the consumers. “For this, a deadline of 15 days from Wednesday has been set,” he said.

    Though the NEA has sought a 20 percent hike, ETFC sources said the power tariff is likely to be increased by 10-15 percent. If the NEA proposal — a hike in the tariff for all customers except for households consuming less than 20 units monthly — is endorsed, it will be the second electricity tariff hike in one and half years. In June 2012, the ETFC had hiked the rates by 20 percent after 11 years.

    NEA had approved a proposal of the management committee to increase the tariff on May, 2013. The power utility has been pressing for a tariff hike at the possible earliest to stabilise its financial health by cutting losses.

    Talking to the Post, NEA Spokesperson Sher Singh Bhat had said the authority incurred a loss of Rs 4 billion in the last fiscal year. NEA s’ cumulative losses reached Rs 14.31 billion, even after the government wrote off a whooping Rs 27 billion.

    “The proposed tariff hike will help NEA maintain good financial status. It will lead NEA to breakeven,” said Bhat, adding besides rising losses, pressure from independent power producers for a higher power purchase agreement (PPA) rate also made tariff hike necessary.

    Pressure on NEA has been piling up to maintain a healthy balance sheet by slashing operating costs.

    The ETFC has been working on a long-term mechanism under which power tariff would go up by 5 percent annually. Under the mechanism, the ETFC is planning to maintain different rates as per the season (dry and wet), from the upcoming fiscal. To this effect, ETFC has been working on a formula, which will forecast the price for the particular fiscal year depending on factors like consumer price index, inflation, industrial productivity, power purchase rate (PPA) for developers, impact on power consumers and the exchange rate of the US dollar.

    Source : The Kathmandu Post