September 22, 2023, Friday
Nepal 1:37:26 pm

NEA imposed electricity demand charges discouraging tea farmers

The Nepal Weekly
March 7, 2023

Nepal Electricity Authority’s decision to impose demand charges for small tea growers equal par with big industries has adversely affected farmers involved in the sector.

The demand charges are based on the highest level of electricity an individual customer demands at one time during the billing period.

The farmers of eastern Nepal have been using electricity, for yeaars, under the agricultural irrigation facilities that provide electricity to farmers at a subsidized rate.

Tea is an agricultural product as per the the National Tea Policy 2000, whch says that a subsidised tax rate, applicable to other agricultural sectors, will be applied while importing irrigation equipment for tea plantations. However, the Nepal Electricity Authority has excluded the tea sector from its priority list. It has placed it under agriculture-based industries in Electricity Tariff Collection Regulations,2022.

The authority has categorised the plantations associated with cooperatives as a rural and domestic industry, while plantations registered as a company are seen as a small-scale industry under the regulation. Similarly, the authority is also imposing demand charges for tea estates spread over 36,450 sq ft of land.

According to sources at the Nepal Electricity Authority Bhadrapur distribution centre, the tea sector now being categorised as rural and domestic industries has to pay Rs60 per kVA every month as demand charges and Rs7.80 per unit of electricity. Earlier, the electricity tariff was Rs3.60 per unit.

Similarly, plantations enlisted as small-scale industries by the regulation are now required to pay Rs110 per kVA every month as a demand fee and Rs9.60 per unit of electricity consumed.

Tea growers allege that the electricity authority has made the regulations without having an adequate understanding of tea farming. “The provision of demand fee and hiked electricity rate for tea plantations isn’t practical,” pointed out Chandi Parajuli, ex- president of Nepal Tea Producers’ Association.