House sub-committee begins discussion on the issue of unpaid electricity billsNepal Electricity Authority says 25 factories need to be forced to disgorge an estimated Rs10 billion.
A sub-committee of the parliamentary Public Accounts Committee, formed to probe into the issue of monies owed to the Nepal Electricity Authority in unpaid utility bills by more than two dozen factories, began discussions and said an extensive investigation would be required.
Around 25 factories are being investigated for not paying their electricity bills since 2015. They need to be forced to disgorge an estimated Rs10 billion in outstanding bills, according to the Nepal Electricity Authority.
Nepali Congress lawmaker Minendra Rijal, who heads the sub-committee, said they started holding internal meetings and plan to summon officials from the electricity authority on Wednesday to get their explanation.
“This is a big and deep issue. It’s too early to comment because it needs extensive studies,” Rijal told the Post. The Public Accounts Committee has given the sub-committee a month to produce the report.
In May, a row between industrialists, who received regular power through trunk lines when the rest of the country was reeling under a severe power crisis, and Nepal Electricity Authority officials intensified after the power utility sent them a notice to clear outstanding dues amounting to Rs4.3 billion in line with its internal assessment.
The factories in question then moved the court against the authority’s billing, and accused the state-owned power utility of illegally charging them, apart from questioning the motive behind levying such huge amounts. The industrialists claimed that the supplier had billed even those factories that had not signed any agreement to buy power at a premium.
Subsequently, the Public Accounts Committee grilled the power utility’s Managing Director Kulman Ghising and other officials at the Energy Ministry. They said that a second assessment was being carried out to find out the actual amount owed by specific industries.
In its initial assessment, an internal committee of the Nepal Electricity Authority had erroneously put all the industries together and calculated the dues for one additional year, even before the billing by-laws, which classify a mechanism for billing for trunk and dedicated lines, had come into effect.
Electricity authority officials say the second assessment has nearly concluded, but they are not in a position to recommend action against the industries based on the report.
“Our study shows that out of the 84 factories that used power through trunk lines, 25 are yet to clear as much as Rs10 billion in unpaid bills which include penalties for late payment,” said Bhakta Bahadur Pun, a board member of the power utility.
“A large number of cases have been filed by the factories against the power utility, and they are under consideration by the courts. So the authority is not in a position to take action against them.”
Also, power utility officials say they are awaiting the conclusions of the parliamentary subpanel and other state mechanisms before making a move.
“The electricity authority is in no position to act as there are technical issues in the calculation of the dues, and the issue is also being scrutinised by the Commission for the Investigation of Abuse of Authority, the court and the parliamentary committee,” said an anonymous board member of the utility.
In June 2015, a board meeting of the electricity authority had set premium charges for factories using electricity through dedicated feeders from August that year.
A separate meeting of the now-dissolved Electricity Tariff Fixation Commission had decided in January 2016 to set premium charges effective from July for factories using direct electricity from dedicated feeders and trunk lines.
As per the provisions of the billing by-laws, any industry that wishes to consume electricity from the trunk line for 20 or more hours like a dedicated feeder system will be liable to pay the charges applicable to dedicated feeder users. Such industries must get approval from the electricity authority board and cannot consume electricity for more hours than the outage schedule set by the authority for them.
"Any industry found to have used electricity for more than the permitted hours under the load-shedding schedule will be charged under the Electricity Theft Control Act 2002, and is liable to pay regular premium rates and compensation charges for unauthorised use of electricity," sate the by-laws.
Also, amid allegations of financial misappropriation against power utility chief Ghising, a complaint was filed at the anti-graft body seeking investigation against former officials of the Nepal Electricity Authority for colluding with industrialists to sell them power unilaterally while cutting power to the general public for long hours.
The applicant charged that the officials supplied electricity to industries while imposing 16 hours of load-shedding on the general public, and demanded a probe against former managing director Mukesh Kafle of the Nepal Electricity Authority, deputy director Sher Singh Bhat, chief of the Load Dispatch Centre Bhuwan Kumar Chettri and other officials.