Nepal Plans Lower Electricity Tariffs for Heavy Users to Reduce Wasted Power
Energy Minister Biraj Bhakta Shrestha says Nepal is preparing a revised electricity billing system under which consumers using more electricity could pay lower rates. The government is also assessing flood damage to hydropower infrastructure in the Bhotekoshi region and plans to modernize early warning systems following damage to flood alert equipment.
Nepal’s Energy, Water Resources and Irrigation Minister Biraj Bhakta Shrestha has announced plans tointroduce a revised electricity tariffmechanism that would offer lower rates to consumers who use moreelectricity, particularly during periods of high power generation. Speaking ata program held at the ministryon Wednesday, the minister said the proposed system aims to increase domestic electricity consumptionandreduce the wastage of surplus power during the wet season. Under the existing progressive billingsystem, consumers generally pay higher billsas their electricity consumption increases. The government isnow working on a regressive billing mechanism that would make electricityrelatively cheaper for higherconsumption. However, the minister noted that provisions in the Economic Act imposing value-added tax(VAT) onelectricity consumption exceeding 50 units have created challenges. The ministry is coordinatingwith the Ministry of Finance to address theissue and streamline the tariff structure. Meanwhile, thegovernment has begun technical assessments of hydropower projects and infrastructuredamaged by floodsin the Bhotekoshi region. Shrestha said repair and reconstruction work would proceed after technical reportsestablish theextent of the damage and the estimated costs. While some facilities may resume operationsafter accumulated mud and debris are cleared, othersites have suffered equipment damage. The ministeralso highlighted transmission constraints, explaining that electricity generation in someareas cannot be fullyutilized because of inadequate transmission infrastructure. The Nepal Electricity Authority has begunstudying transmissionline requirements, with improvements being prioritized ahead of the winter season,when electricity demand is expected to increase. In addition,the government plans to modernize flood earlywarning systems after the Bhotekoshi floods damaged monitoring and warning equipment.Shresthaemphasized the importance of upgrading forecasting technology and strengthening cross-border data-sharing mechanisms,particularly to improve preparedness for disasters affecting downstream communitiesacross national boundaries.