KATHMANDU, May 27: The board of directors of the Nepal Electricity Authority (NEA) has decided to forward a proposal to increase the retail electricity tariff by 20 percent to the Electricity Tariff Fixation Commission ( ETFC) on Sunday.
“The NEA board meeting held on Sunday has formally made a decision to ask the ETFC to increase the retail electricity tariff by 20 percent,” Rameshwar Yadav, managing director of the NEA, told Republica.
ETFC has also indicated that it will endorse the recommendation of the NEA board. The issue of revising the electricity tariff has fallen in limbo for the last 11 years. It has also been a matter of dispute in the hydropower sector.
Meanwhile, ETFC is also working to develop a system of automatic hike of electricity tariff by 5 percent each year, according to Gyanendra Lal Pradhan, a hydropower expert.
Currently, the power tariff is Rs 7 per unit. “The hike will help NEA to cut losses which hover around Rs 7 billion annually,” experts say. “The hike in tariff should not be taken as a measure to relieve the NEA of losses, rather it should also be seen a measure to encourage the private sector to make fresh investment in the hydropower sector,” Pradhan said.
Most of the countries slap competitive prices of power in order to keep the power sector functional. “We also have to increase the tariff but that shouldn´t be an extra burden on the consumers,” Pradhan argued. “Rather it should be helping them to get enough power all the time so that the moribund industrial sector of the county gets a remedy to come out from the current situation.”
The power prices should be in sync with the inflationary pressure in the market. “The 11-year long issue of increasing electricity tariff should be resolved as soon as possible,” Pradhan said.
Source : Republica