KATHMANDU: A protracted dispute over electricity tariffs has forced 25 large-scale industries across Nepal to halt operations, putting roughly 15,000 jobs at risk.

At the center of the controversy is Energy Minister Kulman Ghising, whose insistence on collecting overdue “premium” electricity charges has escalated tensions with industrialists.

The conflict traces back nearly a decade, when industries installed dedicated and trunk-line connections during the country’s rolling power shortages. At that time, the Nepal Electricity Authority (NEA) promised special billing concessions. In 2017–2018, Ghising, then NEA executive director, sent letters demanding payment of outstanding charges, triggering persistent resistance from industrialists.

Under Ghising’s recent tenure as energy minister, the NEA has intensified its enforcement. So far, the authority has cut power lines to 25 industries, including six lines severed on the morning after the country’s Lakshmi Puja festival and 19 more later in the week. Industrial representatives insist they will not pay any charges without proper documentation.

A judicial commission led by former Supreme Court Justice Girish Chandra Lal had previously recommended that industrial consumers pay premiums based on verifiable evidence, such as Time-of-Day (TOD) metering. Industry groups argue they are willing to pay these charges if bills reflect actual electricity usage: 24-hour supply for dedicated feeder lines and up to 20 hours daily for trunk-line connections. NEA, however, has refused to issue evidence-based bills, citing procedural errors and claiming the dispute now requires adjudication by the Electricity Regulatory Commission or the courts.

Former NEA executive director Dr. Mukesh Kafle says the dispute, which could have been resolved through the review process, has been deliberately aggravated.

“The review committee had reached a workable solution. Industries willing to pay would have settled; those unwilling could have approached the courts. Instead, the process was canceled, needlessly complicating the dispute,” Kafle said.

NEA officials, including current Executive Director Manoj Silwal, counter that the review process was legally flawed. “The law did not permit it. Statutory deadlines were involved,” Silwal said, defending the NEA’s decision to issue a 21-day ultimatum for overdue payments. The deadline, set by the NEA board decision on September 28, expired in mid-October, after which the authority resumed power cuts.

Industrialists, organized under the “Victimized and Harassed Industries” group, say they have no choice but to take a firm stand. They argue that Ghising, previously NEA’s executive director and now energy minister, has turned the dispute into a personal vendetta, overriding both the Lal Commission recommendations and administrative review procedures.

A dispute that refused to die

The “dedicated and trunk line” controversy dates back years, rooted in disagreements over how much electricity large industries should pay when they are supplied directly through special lines to avoid power cuts.

The issue ballooned during Ghising’s tenure when he defied a Cabinet directive and pursued aggressive billing — often tens of millions of rupees per industry — on the grounds that factories had unfairly benefited from uninterrupted supply during the load-shedding era.

That defiance, coupled with friction with political authorities, eventually cost him his job in March, 2025. His replacement, Hitendra Dev Shakya, was expected to bring calm.

Yet Shakya, who had served over three decades inside the NEA and previously held the same executive post, did not cave to populist pressure. Instead, he chose a middle, lawful route — introducing a reform that allowed industries to appeal their dues through an administrative review process, reducing the required deposit for appeal from 25% of the claimed amount to just 5%.

The decision, passed in the NEA board meeting on April 11, 2025, effectively reopened the door for legal redress. For the first time, dozens of industries could challenge their dues without freezing tens of millions in deposits.

Six months after his dismissal, Kulman Ghising returned to government — this time as Energy Minister. What could have been a moment to strengthen institutional credibility instead became, as insiders describe, a mission of retribution.

First, Ghising swiftly removed Shakya from the NEA’s leadership — an act that many saw as personal payback for being replaced in March, 2025. Shakya’s dismissal came just weeks after his residence was torched twice during the Gen Z Movement riots on September 8 and 9. As he struggled to recover from that trauma, his ousting — without even a gesture of solidarity — deepened the impression of vendetta.

Then, in what critics call his “second act of revenge,” Minister Ghising scrapped the very administrative review process Shakya had established, reinstating the aggressive billing and collection approach that had triggered the controversy years earlier.

Finally, analysts argue that Ghising’s actions were also politically calculated. With his popularity dipping and elections looming, reviving the “tough on business” narrative allowed him to portray himself once again as a crusader for public interest — the man unafraid to take on big industries.

The return of conflict

Under Ghising and the new Managing Director Manoj Silwal, the NEA has reactivated its enforcement drive. During Tihar festival, the NEA cut power lines to 25 major industries over unpaid dues, with more than 30 others refusing to comply, citing unlawful collection.

Industrial federations have accused the NEA of violating due process and undermining rule of law, arguing that their ongoing appeals were arbitrarily nullified. “This is institutional injustice,” said one industrial representative. “The Authority demanded 5% deposits for administrative review and then cancelled the entire process without explanation.”

The industrial lobby warns that over 15,000 jobs are now at risk, and that the decision threatens a steady monthly revenue stream of over Rs. 1 billion that industries pay to the Authority.

Past experience offers reason for concern: when the NEA cut 23 industrial lines for 22 days in 2022, the sector reported losses exceeding Rs. 12 billion, while the government lost over Rs. 3 billion in revenue.

The Lal commission report finding

After nearly a decade of bureaucratic limbo, the Ministry of Energy, Water Resources, and Irrigation had made public the long-awaited Lal Commission report in November, 2024— an exhaustive inquiry into the Nepal Electricity Authority’s (NEA) controversial billing of dedicated and trunk electricity lines.

The report, prepared under the leadership of former Supreme Court Justice Girish Chandra Lal, lays bare years of irregular billing, legal ambiguity, and institutional mismanagement that have fueled a Rs 22 billion arrears dispute between the NEA and dozens of industrial consumers.

Formed in February 2016, the Lal Commission was tasked with investigating how the NEA imposed tariffs for premium power lines without proper authorization.

Phase One: Unapproved Tariffs and Legal Grey Zones (Aug 2015 – Jan 2016)

The commission traces the beginning of the dispute to August 2015, when NEA unilaterally set tariffs for dedicated electricity lines — special connections meant to provide uninterrupted supply to industries — without formal approval from the Electricity Tariff Fixation Commission.

The report notes that the NEA’s decision to charge these rates “lacked both legal authority and procedural legitimacy.” While industries protested the move, the authority continued billing them, resulting in a legal grey area. The Lal Commission calls this early period “the foundation of institutional inconsistency” that would later balloon into a nationwide dispute.

Phase Two: Load-Shedding and Contradictory Billing (Feb 2016 – May 2018)

The second phase coincided with the era of nationwide load-shedding, when Nepal suffered power cuts lasting up to 14 hours a day. During this period, the NEA raised tariffs for industries using dedicated or trunk lines, promising round-the-clock electricity in exchange for higher fees.

In practice, however, the authority failed to deliver the guaranteed supply. Even after issuing public notices suspending dedicated line services, NEA continued to bill customers at premium rates. The commission describes this as a contradiction between policy and practice, recommending a complete recalculation of charges during this period.

The Lal Commission also found that NEA did not systematically use Time-of-Day (T.O.D.) meter data, which records electricity consumption during peak and off-peak hours. Without verified T.O.D. readings, the NEA had no credible basis for claiming that industries actually used dedicated line power — a lapse that inflated arrears and weakened the authority’s own case.

Phase Three: Post–Load Shedding Irregularities (June 2018 – July 2020)

By May 2018, when the country officially ended load-shedding, the rationale for dedicated and trunk line tariffs no longer existed. Yet NEA continued billing industries for premium access that no longer held any technical or economic justification.

“The continuation of such tariffs after the restoration of normal power supply is neither administratively sound nor economically defensible,” the report states. The commission found that these charges were imposed without legal mandate, calling for their withdrawal and refund where applicable.

Billing Irregularities and Data Gaps

Beyond tariff timing, the Lal Commission uncovered systemic weaknesses in NEA’s billing procedures. Chief among them was the authority’s failure to regularly download, store, and analyze T.O.D. meter data, the very metric needed to determine how much power each industry consumed.

These lapses led to widespread discrepancies in billing records. The report concludes that NEA’s arrears figures were not based on verified consumption and that many of the billed industries were overcharged due to incomplete or missing data. The commission has recommended that disputed fees be reassessed transparently, using verifiable meter readings.

Legal Disputes and Institutional Coordination

The dispute eventually spilled into the courts. Out of 59 industries involved, 19 have already completed legal proceedings, while others have filed cases directly in district courts under the NEA Act of 1984, which grants such courts jurisdiction over disputes involving the authority.

The commission urges both the NEA and the Tariff Determination Commission to strengthen coordination and establish a standardized billing protocol to prevent similar disputes in the future. It also calls for clearer communication between regulatory agencies to ensure that tariff decisions are made with legal and procedural transparency.

For Nepal’s industrial community, the report represents more than an audit — it is a moment of reckoning. Years of conflicting directives, inconsistent billing, and bureaucratic inertia have tested the credibility of state institutions.

As the Lal Commission concludes, “Only evidence-based billing and lawful enforcement can restore the integrity of Nepal’s power governance.” The government’s response to that challenge will determine whether this long dispute ends in accountability.