Friday, 6 August, 2021

Reduction Of Power Tariffs

The slashing of power tariff, which will come into effect from the next month, will definitely augment the consumption of electricity across the nation, boosting the revenues to the power authority and industrial production. The reduced electricity tariff is expected to encourage people to use more power for their household purposes. The use of cheaper power by industries may help cut the prices of goods, which in turn, would help boost the consumption of the locally produced items. The power regulatory body's decision to cut the power-tariff has clearly been aimed at increasing power consumption following a considerable rise in power generation capacity of the Nepal Electricity Authority (NEA), which has curbed the nagging phenomenon of power outages.

The new provision of removing dedicated and trunk power lines for industries means that the industries won't have to pay higher power bill for using them, which will assist them to produce their goods in lower costs. This, in turn, is likely to see some drop in the prices of the goods. The removal of dedicated power lines and lowering of power tariff will lead to about 60 per cent fall in the industries' existing power bill. Meanwhile, the common households will benefit considerably from the decision of the Electricity Regulatory Commission to reduce the power tariff by ten per cent. Many households are expected to consume more electricity for household purposes reducing their dependency on imported cooking gas and fossil fuel, saving billions.

As per the new provision, the NEA will charge the power users as per the amount of power utilisation- the higher the consumption of power, the higher the bill. This provision might have been introduced to maintain a steady supply of power during peak hours, but the same may discourage our households to give up using cooking gas, fossil fuel and even fuelwood for household purposes. The NEA must therefore think about lowering tariff appreciably so that the people, households and industries would be encouraged to consume electricity more. Since the country has recently witnessed a gradual rise in power generation and supply, the people and industries should also be encouraged to take benefit of increased level of power generation. For this, the NEA must go for cutting power tariff considerably. Reduction in power tariff will obviously stop the surplus power going to waste, which will ultimately help increase the NEA revenues.

At a time when the country is generating electricity significantly, it is depressing to see the country importing cooking gas and fossil fuel by paying huge amount of money. As such, it would be highly prudent for our government to enact and implement policies that would boost power consumption so that our reliance on the imported gas and fuel could be lessened drastically. Similarly, our government needs to refrain from implementing controversial policies such as increasing customs tariffs on electric vehicles or increasing power tariffs under various pretexts. Should our government extend support to the NEA in cutting power tariff appreciably, it would undoubtedly reduce our dependence on the imported gas and fuel and thus help save our revenues and capital flying abroad. The same would help expedite industrial and economic growth in the country. For achieving these targets, promotion of power consumption is essential through drastic cut in power tariffs.