The Energy Ministry is preparing to form a committee to resolve a row between the Nepal Electricity Authority and industrialists over outstanding electricity bills that has been dragging on for nearly a year, officials said.

The state-owned utility maintains 25 factories owe more than Rs10 billion for electricity supplied to them through dedicated feeders and trunk lines since 2015.

The dispute intensified in May after the power utility presented bills to the factories for the overdue payments.

The unhappy factory owners went to court accusing the Nepal Electricity Authority of charging them illegally and questioning the motive behind levying such huge amounts. They claimed that the utility had billed even those factories that had not signed any agreement to buy power at a premium.

According to an official close to the situation, both the power utility and the industrialists are at fault in this case because of conflicting provisions, the power utility’s negligence in record-keeping and supplying direct electricity and the industrialist’s reluctance to pay what they genuinely owe to the state.

“There is talk of giving a discount for the time difference in implementing the decision to supply regular electricity to factories at premium rates during the power crisis and after the end of load-shedding,” said the official who asked not to be named.

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 for factories using direct electricity from dedicated feeders and trunk lines.

The power utility has billed them from August 2015 and not January as per the dissolved board’s decision. And it was also found that in a bid to end load-shedding and manage the power load, around 16 factories were supplied regular power through trunk lines even though they had not applied for it and were charged premium rates.

As per the provisions of the billing bylaws, any factory that wishes to receive electricity through a trunk line for 20 or more hours like a dedicated feeder system has to pay the charges applicable to dedicated feeder users. Such factories must get approval from the electricity authority board and cannot consume electricity for more hours than the outage schedule set 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," state the bylaws.

After the power utility sent the bills, the industrialists filed petitions at multiple district courts and Patan High Court.

The High Court rejected petitions filed by more than a dozen firms ordering them to take the matter to the power utility’s appeals committee and resolve it there, citing that the issue of electricity bills did not fall under the court’s purview.

The power utility amended the provisions in its billing bylaws and said that if the firms fail to make regular payments after being allowed to pay in instalments, the utility can seek regular monthly instalments and an additional amount as fines for deferral or cut their electricity connections.

After talk of cutting their electricity connections surfaced, the industrialists took the matter to Prime Minister KP Sharma Oli who called for a meeting with officials of all stakeholder agencies.

“At the meeting, it was decided to seek a middle path by forming a committee through the cabinet and give a discount for around a year and a half after the end of load-shedding starting June 2018, and for the gap period between the date the power utility board issued its decision, and the date the decision of the dissolved tariff commission came into effect,” said the official.

Energy Secretary Dinesh Ghimire confirmed the development and said that discussions were being held to form the proposed committee.

When asked about the monies owed legally by the industrialists to the state and talk of discounting billions of rupees, Ghimire said that the issue of tariffs and discounts fell under the purview of the Electricity Regulatory Commission, declining to comment further.

According to Ram Prasad Dhital, a member of the Electricity Regulatory Commission who oversees legal and external affairs, it received around 10 applications from the industrialists to prevent the power utility from cutting off their electricity, but as the cases are in court, the commission cannot go beyond its jurisdiction and make a statement on the matter.

“As far as the issue of hefty charges levied on industrialists despite the end of load-shedding is concerned, the commission is working to revise the electricity tariffs in line with the application received from the power utility,” said Dhital.

Earlier, the electricity authority said that 298 consumers were being supplied with electricity through dedicated feeders and trunk lines. Among them, 184 pay premium rates and around 25 factories have not paid their electricity bills since 2015.

The factories had secured 315 megawatts of 24-hour electricity supplied directly through dedicated feeders and trunk lines when the rest of the country was reeling under a severe power crisis.

After talk of halting payment collection from industries until the proposed committee reaches a solution surfaced, the government also faced criticism.

“Why does the government want to stop the electricity authority from legally collecting the amount from industries?” said Prakash Chandra Lohani, former finance minister. “Also, this neo-feudalist government cannot do anything about industries who owe money to poor sugarcane farmers, and it wants to discount the bills of some big and near industrialists. This makes it clear whose government it really is.”

A sub-committee of the parliamentary Public Accounts Committee formed to probe the issue has also prepared an unfinalised report pointing to the electricity authority’s grave negligence in handling matters related to state revenue and seeking officials to recoup the money in arrears and launch an anti-graft investigation.