NEA mulls power tariff hike

Nepal Electricity Authority (NEA) might increase the electricity tariff to gradually recover accumulated losses, loss reduction, creation of fund for hydropower development and for addressing future inflation.
"A 15 per cent hike in electricity tariff may balance the losses," Arjun Kumar Karki, managing director of NEA said adding that NEA is yet to be allowed to adjust the tariff to make up for the increased cost of operation.
According to a provisional analysis, NEA power system endured a loss of 25.15 per cent in the fiscal year 2007-08. In the preceding year, the final loss figure stood at 26.71 per cent. "NEA earned Rs 15,405.03 million from sale of electricity in 2007-08, which is 6.61 per cent higher than last year's figure. Similarly, NEA earned Rs 655.24 million as other income," he added.
NEA has incurred a net loss of Rs 1312.16 million after deducting interest, foreign exchange loss and provisions. However, it has earned a profit of Rs 314.19 million the preceding year. "Accumulated loss by the end of 2007-08 has reached Rs 7133.77 million," Karki said.
Analysis shows that NEA's cost of service per KHh stands at Rs 7.4 against Rs 6.7 per KWh revenue rate. After adjustment of the contribution of Rs 0.28 per KWh from miscellaneous sources of income, NEA suffered loss of Rs 0.42 for every KWh of energy served by it.
Presenting NEA's brief accounts during its 23rd anniversary, Karki regretted that there were long spells of load shedding. Energy demand over the fiscal year totalled 3,490.12 GWh. As this amount of energy was not available with the system, the deficit amounting to 309.46 GWh, had to be offloaded to keep the electricity service running.
"At present, there is a growth of 11.31 per cent during peak power demand and 10.76 per cent growth in the energy demand last year aggravated the situation," he added. In dry months, NEA imposed 48 hours a week load shedding.
At the end of fiscal year 2007-08, NEA has 1,524,610 customers, an increase of 9.07 per cent over that of the previous year. Of the total customers, 95.66 per cent belong to the domestic category accounting for 40.52 per cent of total energy sales that earned NEA 40.66 per cent of the total revenue.
Industrial customers represent only 1.67 per cent of total customers, but contributed 38.81 per cent of the total energy sales that is 35.93 per cent of total revenue earned by the NEA.
Power and energy demand grew by 11.31 per cent and 10.76 per cent respectively in the reviews period, he said.
During the period, major overhauling and maintenance works like servicing of turbines at the Marsyangdi, Trishuli, Sunkoshi and Puwa Khola hydropower stations were also done. The damaged generator of unit 1 of Kulekhani-II hydropower station was repaired under the supervision of experts from Fuji Electric Sytems Co Ltd (Japan) and brought into operation since the last week of March. Overhaul and repairs at Kali Gandaki, the biggest power station of Nepal, was also completed successfully by the NEA engineers.
"Though our present is troubled with supply shortage, the prognosis for the future is not bleak," Shankar Prasad Koirala, water resource secretary said, adding that NEA would be able to undertake a number of generation, transmission and distribution projects. It has also intensified efforts to develop an internal system with backbone at 220 KV. Elimination of existing transmission bottlenecks will be NEA's first priority. It is also planning cross border transmission links.
"Within five years, NEA plans to produce 525 MW electricity that needs a total of Rs 65 billion cost," Karki said.

The future is bright
Future projects that are in different stages of development are expected to be commissioned within five years, so that by the time 592 MW power will be inducted into the system.

NEA projects on anvil
Upper Tamakoshi (309MW)
Chamilya (30MW)
Kulekhani-III, Rahughat (27 MW)
Upper Trishuli-3A (60 MW)
Upper Trishuli (40MW)
Upper Modi-A (42 MW)

From subsidiary Chilime
Sanjen Upper (11 MW)
Sanjen (35 MW)
Middle Bhotekosi (80 MW)
Rasuwagadhi (75 MW)
From private sector
Kableli-A (30 MW)
Upper Marsyangdi (50 MW)

Others
Upper Seti (128 MW)
Nalsyagu GAD (400 MW)
Budhi Gandaki storage projects (600 MW)

Export-oriented projects
Arun-3
Upper Karnali
West Seti