KATHMANDU: Nepal’s electricity tariff dispute has escalated under Energy Minister Kulman Ghising, who previously served as NEA Managing Director. His insistence on collecting overdue “premium” electricity charges has forced 25 industries to halt operations, threatening roughly 15,000 jobs.

The conflict stems from dedicated and trunk-line connections installed during rolling power shortages, with industrialists demanding Time-of-Day (TOD) evidence for actual usage.

NEA, under Ghising’s leadership, aggressively enforces payments, ignoring administrative review procedures and Lal Commission recommendations, deepening mistrust, disrupting production, and creating a volatile industrial and political climate.

What are dedicated feeders and trunk lines?

Dedicated feeders are specialized electrical connections that provide continuous, uninterrupted power to industries, hospitals, and other critical infrastructure, bypassing general load-shedding schedules.

Trunk lines carry bulk electricity from substations to high-demand users, such as large-scale industrial complexes.

NEA imposed premium tariffs on these services without formal approval from the Tariff Determination Commission, creating a legal and procedural gray zone.

Under Kulman Ghising, both as MD and now as Energy Minister, NEA aggressively enforced collection of these dues, often retroactively, with disconnections and large penalties.

Critics argue that his approach prioritizes revenue over due process, procedural fairness, and industrial growth, ignoring verified evidence from TOD meters, which measure actual electricity consumption.

The insistence on collecting disputed charges from periods when power was not delivered has intensified industrial resistance and legal battles, undermining NEA’s institutional credibility and investor confidence across Nepal’s industrial sector.

How did industries gain access to these lines?

Industries installed dedicated and trunk-line connections during Nepal’s rolling power shortages, roughly between 2013 and 2015, under NEA assurances of uninterrupted supply in exchange for premium charges.

At the time, the authority promised concessions and legal recognition, but tariffs were never formalized through the Tariff Determination Commission.

Ghising, as NEA MD, later issued demands for payment of these arrears from 2017–2018 onward, triggering resistance. Industrialists insisted on bills backed by TOD meter readings to verify actual usage, but NEA under Ghising often bypassed this requirement.

Critics claim that his uncompromising enforcement created an adversarial environment, with repeated line disconnections, legal petitions, and disruptions to production, showing a pattern of punitive behavior rather than collaborative dispute resolution.

His approach has been interpreted as prioritizing personal authority and revenue collection over fairness and long-term industrial stability.

Ghising, as NEA MD, later issued demands for payment of these arrears from 2017–2018 onward, triggering resistance. Industrialists insisted on bills backed by TOD meter readings to verify actual usage, but NEA under Ghising often bypassed this requirement.

What caused disputes over billing when power wasn’t supplied?

During the rolling load-shedding era, NEA billed industries even when dedicated feeder or trunk-line supply was interrupted. Industrialists demanded TOD verification, demonstrating the actual hours of electricity received.

Ghising, however, insisted on full retroactive payments, often threatening disconnections and legal action. NEA’s own letters and enforcement actions escalated tensions with industrial consumers, many of whom had been promised concessions or accurate billing.

Industries were forced into protracted legal battles to dispute unjust charges, leading to production losses and mistrust in NEA’s governance.

Ghising’s insistence on payment for periods when electricity was not supplied has been described as punitive, undermining institutional credibility, escalating the conflict unnecessarily, and turning what could have been a technical dispute into a high-profile industrial controversy.

How did the Lal Commission address the dispute?

The Lal Commission, chaired by former Supreme Court Justice Girish Chandra Lal, was established on January 9, 2024, and submitted its findings to the Ministry on May 5, 2024.

The commission conducted a comprehensive investigation into the Nepal Electricity Authority’s (NEA) long-standing controversies surrounding dedicated and trunk-line electricity billing.

The inquiry documented Rs 22 billion in disputed arrears, stemming from unapproved tariffs, inconsistent billing practices, and NEA’s failure to utilize Time-of-Day (TOD) meters.

The commission recommended recalculating dues based on verified consumption data, strengthening coordination between NEA and the Tariff Determination Commission, and ensuring transparent, evidence-based enforcement.

Industries were forced into protracted legal battles to dispute unjust charges, leading to production losses and mistrust in NEA’s governance.

The dispute’s origins trace back to July–December 2015, when NEA unilaterally imposed tariffs without formal approval, creating a legal grey area.

The Lal Commission emphasized that all collections must rely on TOD meter readings to ensure accuracy, fairness, and transparency. The second phase, January 2016–April 2018, coincided with nationwide load-shedding.

NEA continued billing industries for premium uninterrupted supply, often without delivering the promised service, and the commission recommended that arrears from this period be calculated separately.

From May 2018 onward, with load-shedding ended, charging premium rates became legally indefensible. Despite these clear directives, Kulman Ghising, first as NEA Managing Director and now as Energy Minister, reinstated aggressive billing and disconnected industrial power lines, ignoring TOD verification and administrative review procedures.

This deliberate override of the Lal Commission’s recommendations has intensified industrial disputes and eroded institutional credibility. Arrears prior to 2015, the commission noted, must be addressed through court rulings, reinforcing that only evidence-based billing can restore trust and fairness.

How were arrears and dues calculated?

NEA claims Rs 6.6 billion in arrears from January 2016 to April 2018, escalating to Rs 8.25 billion when a 25% additional fee is applied. Lal Commission guidelines and industry petitions highlighted exemptions for certain periods, such as when tariffs were undefined or load-shedding had ended.

Industries argued that they were willing to pay verified dues but refused to pay full retroactive charges without TOD evidence. NEA under Ghising enforced full collection, often threatening legal action or disconnecting lines despite ongoing installments or review petitions.

Many industries had already started paying in installments, but delays in subsequent payments prompted further punitive actions. Critics argue that Ghising’s strict enforcement disregarded fairness, legal clarity, and procedural safeguards, aggravating industrial mistrust, undermining compliance, and destabilizing Nepal’s manufacturing sector in both economic and political terms.

Which industries faced disconnections during Tihar?

On October 21, 2025, NEA cut electricity to six major industries immediately after Lakshmi Puja: Jagadamba Steel (Rs 1.618 billion), Reliance Spinning Mills (Rs 753.7 million), Shivam Cement (Rs 778.8 million), Ghorahi Cement (Rs 508.5 million), Arghakhanchi Cement (Rs 448.4 million), and Triveni Spinning Mills (Rs 321 million).

Later in the week, 19 additional industries experienced line disconnections. The timing—during and right after a major festival—was criticized as insensitive.

Industrialists argued the NEA ignored evidence-based TOD billing and legal protections, applying harsh punitive measures. Critics maintain that these actions were a display of Ghising’s authoritarian style, prioritizing immediate revenue over industrial stability and worker welfare.

The sudden disconnections disrupted production, created financial losses, and sent a chilling message to other industrial stakeholders about the risks of non-compliance under Ghising’s ministerial authority.

How have installment payments been handled?

NEA allowed 28-month installment plans for industries, with some companies like Samrat Cement, Rolpa Cement, and Nawa Nepal Plastic Industries initially complying. However, payments often stopped due to financial constraints, administrative delays, or disagreement over disputed arrears.

Other firms, such as Hulas Steel, Ashok Steel, and Laxmi Steel, paid first installments but faced repeated threats of line disconnection for later defaults. By Monday of the reporting week, 13 industries had resumed installment payments, while others withheld funds pending legal review.

Critics argue that Ghising’s aggressive enforcement discourages compliance and creates uncertainty. Rather than fostering cooperation, the punitive approach penalizes partial compliance, disregards due process, and exacerbates industrial grievances, reinforcing a climate of fear and mistrust across Nepal’s manufacturing sector.

Later in the week, 19 additional industries experienced line disconnections. The timing—during and right after a major festival—was criticized as insensitive.

What legal actions have industries taken?

Industrialists filed administrative review petitions with Prime Minister Sushila Karki’s secretariat and obtained interim court orders preventing NEA from disconnecting lines. Despite this, NEA under Ghising issued disconnection notices and cancelled review procedures unilaterally, forcing industries to pursue further litigation.

The aggressive enforcement and disregard for ongoing petitions have been criticized as violations of due process and institutional fairness. Ghising’s actions demonstrate a punitive, retaliatory approach rather than governance based on legal or technical merit.

These disputes have prolonged uncertainty, disrupted production, and caused financial losses, creating an adversarial environment between the state authority and industrial stakeholders.

How did past NEA enforcement compare?

In October 2024, NEA cut power to 34 industries at once.

Despite Cabinet and NEA board directives to recalculate bills using TOD data, then NEA MD Ghising pressed for aggressive collection, ignoring administrative review and procedural safeguards.

This confrontational style generated legal petitions, industrial unrest, and political friction. Ghising’s return as Energy Minister revived unresolved conflicts, undermining reforms introduced by his successor, Hitendra Dev Shakya, who had allowed a fairer administrative review process with reduced deposit requirements.

Critics argue that Ghising’s repeated insistence on punitive enforcement shows a pattern of prioritizing personal authority and revenue over institutional credibility, creating unnecessary disruption for both the industrial sector and the government’s revenue stream.

How did Ghising’s political moves affect NEA?

Upon becoming Energy Minister, Ghising swiftly removed Hitendra Dev Shakya as NEA MD, ending the administrative review system Shakya had introduced. This reinstated aggressive billing and power disconnections, ignoring legal recourse and TOD verification.

Analysts argue that these moves were politically motivated, designed to appeal to populist narratives by portraying Ghising as a tough enforcer, while simultaneously exacting personal revenge for his March 2025 dismissal.

Critics maintain that such politically driven decisions undermine NEA’s institutional integrity, foster industrial uncertainty, and signal that ministerial discretion can override both law and regulatory oversight, creating a precedent of instability in governance and energy administration.

Despite Cabinet and NEA board directives to recalculate bills using TOD data, then NEA MD Ghising pressed for aggressive collection, ignoring administrative review and procedural safeguards.

How have industrialists responded?
Industrialists, organized under the “Victimized and Harassed Industries” group, have refused to pay disputed arrears without TOD verification, warning that Ghising’s punitive approach threatens industrial stability, revenues, and jobs.

Past experiences, such as 23 industrial line disconnections in 2022 causing Rs 12 billion in losses for industries and Rs 3 billion in government revenue, underscore these risks.

By canceling administrative reviews and enforcing full arrears collection, Ghising is viewed as intensifying opposition rather than seeking cooperative resolution, destabilizing industrial relations, and creating legal and financial uncertainty for both businesses and workers.

What does the burning of Hilton Hotel reveal about Nepal’s worsening business climate amid the NEA–industry tariff dispute?

The destruction of Kathmandu’s Hilton Hotel has become a stark symbol of Nepal’s deteriorating investment climate. The five-star hotel, built with an ₹8 billion investment and opened in July 2024, was set on fire by Gen Z protesters during violent demonstrations.

The incident comes as Nepal faces another major economic challenge: the dispute between the Nepal Electricity Authority (NEA) and large industries over “premium” electricity tariffs.

More than 25 factories have already halted operations after the NEA began enforcing overdue payments, putting around 15,000 jobs at risk. Industrialists warn that abrupt tariff enforcement during a slowdown could push more factories to closure.

Together, the Hilton fire and the tariff standoff reveal how fragile Nepal’s business environment has become — marked by protests, unpredictable policy moves, and eroding investor confidence.

The burning of a global brand like Hilton undermines Nepal’s reputation as a safe destination for tourism and foreign investment, while factory shutdowns highlight the strain on the domestic economy.

How will industries be affected moving forward?

The ongoing NEA conflict risks closure of financially vulnerable industries, endangering 15,000 jobs. Production disruptions threaten domestic supply chains, exports, and monthly revenues exceeding Rs 1 billion.

The volatile political environment, combined with Ghising’s uncompromising enforcement, could force factories to shut, exacerbating unemployment and economic instability.

Industrialists argue that evidence-based billing and transparent administrative review are essential to maintain operations, protect jobs, and sustain government revenue.

Critics contend that the punitive, vendetta-driven approach prioritizes short-term revenue over long-term industrial health, risking broader economic repercussions and investor confidence in Nepal.