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NEA cuts off electricity to three industries over unpaid dues

KATHMANDU: The Nepal Electricity Authority (NEA) has once again cut off the power lines of three major industries: Arghakhanchi Cement, Ghorahi Cement, and Reliance Spinning Mills. The power disconnection occurred at 9 PM on Tuesday night due to unresolved issues related to the payment of dedicated and trunk line charges.

Unpaid Dues and Previous Actions

According to the NEA, Reliance Spinning Mills owes Rs. 753.7 million, Arghakhanchi Cement Rs. 448.6 million, and Ghorahi Cement Rs. 510 million in outstanding dues. The NEA has stated that these industries have not paid the premium charges for the use of dedicated and trunk lines during the load-shedding period from January 2016 to April 2018.

This is not the first time the NEA has taken such action. On December 16, 2023, the NEA had similarly cut off the power lines of various industries over the same issue. Following this action, Prime Minister Pushpa Kamal Dahal took the initiative to form a judicial commission led by former Justice Girish Chandra Lal to address the matter.

Government Intervention and Industrial Complaints

The government directed the NEA to implement the recommendations of the Lal Commission. However, the affected industries complained that the NEA’s demand for payment of charges was contrary to the recommendations of the Lal Commission and the directives of the Council of Ministers.

During the load-shedding period, these industries were allowed to consume electricity through premium charges on dedicated and trunk lines. While the industries paid their regular charges, they did not settle the premium charges, which led the NEA to demand the payment of the outstanding dues. The industrialists protested against this demand, arguing that the charges were unfair.

Commission Recommendations and Government Decision

The Lal Commission recommended that additional charges be imposed for the use of dedicated and trunk lines during the disputed period. The Council of Ministers endorsed this recommendation, stating that the Electricity Tariff Fixation Commission had already determined the charges for the period from January 2016 to April 2018.

Following this recommendation, the NEA’s 973rd board meeting on June 18 decided to give the industries a 15-day deadline to pay the outstanding premium charges, with an additional 25 percent surcharge for using electricity from dedicated and trunk lines during the specified period.

Deadline and Power Cut

The 15-day deadline expired on Tuesday, prompting the NEA to begin cutting off the power lines of the non-compliant industries. This decisive action underscores the NEA’s commitment to enforcing payment compliance and addressing financial discrepancies within the energy sector.

Implications and Future Actions

The NEA’s move to cut off power supplies to these industries highlights the ongoing tension between industrial stakeholders and the authority over unresolved financial obligations. It also signals the NEA’s stringent approach to ensuring that all dues are paid, even if it involves drastic measures like power disconnections.

This situation underscores the need for a more transparent and collaborative approach to resolving such disputes in the future. It is essential for both the NEA and the industrial sector to work together to find sustainable solutions that balance financial responsibilities with operational viability.

As the NEA continues to enforce its policies, industries must prioritize settling their dues to avoid disruptions. The resolution of this issue will likely set a precedent for how similar disputes are handled in the future, potentially leading to more stringent enforcement of financial regulations and payment compliance in the energy sector.

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