Dedicated Feeder & Trunk Line Premium Tariff: Nepal's NEA Dispute Explained

A 'dedicated feeder' is a separate electricity line run directly from a substation to a single large consumer, usually a factory. Because the feeder is not shared with ordinary households, the Nepal Electricity Authority (NEA) could keep it energised even while surrounding areas were switched off during load-shedding. In practice this meant a dedicated-feeder industry could receive up to 24 hours of supply a day when everyone else had power for only a few hours.

A 'trunk line' is a related but distinct arrangement. Here the industry is connected closer to the transmission network, typically by installing a transformer inside the factory premises and drawing power routed through two substations. Trunk-line consumers were generally offered around 20 hours of daily supply during the crisis, slightly less than the near-continuous dedicated-feeder service.

Both schemes were a response to Nepal's severe electricity shortage, when scheduled outages ran to 12-18 hours a day in the worst winters. For energy-hungry sectors such as cement, steel, spinning and plastics, an interrupted grid meant idle machinery and spoiled batches, so paying extra for reliable power was commercially attractive. NEA first advertised the option of buying electricity through dedicated feeders around 20 October 2013, and it became widely used from 2015.

The core bargain was simple on paper: the industry got priority, near-uninterrupted electricity, and in return it paid a premium on top of the normal industrial tariff. The dispute that followed is essentially an argument about whether that bargain was honoured, whether the extra charge was ever legally fixed, and how much is genuinely owed.

The premium originated with NEA's board of directors, which at its 710th meeting on 27 June 2015 approved additional charges for industries taking uninterrupted supply through dedicated feeders and trunk lines. The scheme took effect from around August 2015 (mid-2072 BS), in the depths of the load-shedding crisis. Initially NEA levied a premium of about 65 percent over the normal tariff, later reducing it to roughly 15 percent above the standard rate.

Because Nepal's electricity tariffs must be approved by an independent regulator, the timing of formal approval became central to the dispute. Reporting indicates the premium was only formalised by the Electricity Tariff Fixation Commission on 13 January 2016 (2072-09-29 BS), and NEA moved to implement it more concretely from 16 July 2016. Charges levied before formal approval are among the items industrialists and later investigators questioned.

The premium was meant to apply where a consumer genuinely drew power around the clock. To measure this, NEA in a September 2015 notice told factories to install Time-of-Day (TOD) meters, which record how many hours per day electricity is actually consumed. The idea was that if a TOD meter showed consistent consumption exceeding roughly 20 hours a day during blackout periods, the premium was justified.

In reality, the metering evidence became a weak point for NEA. Investigators later found that in many cases TOD meter data was never properly downloaded or presented, so NEA could not always prove that a given factory had actually taken the continuous supply it was being billed a premium for. That evidentiary gap is one reason billions of rupees in claims remain contested rather than settled.

The financial scale of the row grew steadily. In 2018 NEA wrote to 58 factories demanding about Rs 10.14 billion in outstanding premium charges. By 2023-2024 the claimed total across roughly 59-61 consumers had swelled beyond Rs 20 billion, with a review panel documenting a dispute of around Rs 22 billion in arrears. Individual claims are large: NEA alleged that Jagdamba Steel alone owed about Rs 4.14 billion.

Industrialists reject much of this. Their central argument is that they should pay a premium only for power they actually received continuously, yet NEA frequently could not produce meter data proving 24-hour supply. Several factories say the promised uninterrupted service was itself unreliable, so charging a full premium was unfair. Others contend they never used dedicated or trunk-line services at all and were billed in error.

The billing method compounded the mistrust. In 2019 NEA issued back-dated, consolidated bills covering roughly three years at once, sometimes after it had already suspended dedicated-feeder supply to the private sector (a suspension reported around 23 February 2016). Industrialists complained the bills were faulty, inconsistent and impossible to reconcile, and at one point NEA reportedly submitted a bundle running to about 100,000 pages to Parliament's Public Accounts Committee (PAC).

In short, the Rs 22-billion figure is not a settled debt but a contested claim. It mixes charges from periods before the tariff was formally approved, charges for a service whose delivery cannot always be evidenced, and interest and penalties accrued over years of stalemate, all of which the two sides value very differently.

To break the deadlock, the government in January 2024 formed a three-member investigation panel chaired by former Supreme Court Justice Girish Chandra Lal, with joint secretaries from the energy and industry ministries as members. Its task was to examine the disputed dues, spread across factories concentrated in the Lumbini industrial corridor, and recommend a fair settlement to the government.

The Lal panel submitted its report in early May 2024. It concluded that NEA's billing had been problematic across distinct periods. For roughly mid-July 2015 to mid-January 2016, NEA had effectively set tariffs before proper approval, making some billing legally questionable. For the middle period (about February 2016 to May 2018) it found inconsistent and sometimes higher tariffs, including billing after services were suspended, and recommended recalculation. For the period after June 2018 it found no valid basis for the premium at all, because by then the government had declared load-shedding over and the special uninterrupted service was no longer meaningful.

On that basis the panel recommended waiving the premium for two windows: the first roughly six months of the scheme (mid-July 2015 to mid-January 2016) and the period after mid-2018, leaving a narrower core window (about mid-January 2016 to mid-May 2018) for which industries would genuinely owe premium charges. The report also flagged that of the industries involved, only a minority had completed the legal process, while many had gone to district courts under the Nepal Electricity Authority Act, 1984.

Even after the report, settlement proved politically fraught. NEA publicly worried that leniency toward industrialists would erode its revenue, while the government leaned toward a phased, negotiated recovery. NEA offered instalment plans stretching over 60 months, and some industries began paying instalments against the core-period charges, but a comprehensive, final settlement accepted by all sides has remained elusive.

Frustrated by non-payment, NEA has repeatedly used its strongest tool: disconnection. In late 2024 the Cabinet directed recovery of the outstanding dedicated-feeder and trunk-line dues, and NEA under managing director Kulman Ghising pressed hard to collect. This collection drive became entangled with national politics.

In March 2025 the government sacked Kulman Ghising, the widely credited 'light man' who had ended daily load-shedding, months before his term was due to end, and reinstated Hitendra Dev Shakya as NEA chief. The removal, which drew street protests, was officially blamed on missed performance reports and an unauthorised tariff understanding with India, but many observers linked it to the pressure Ghising's aggressive dues-recovery had put on powerful industrialists.

The disconnections continued regardless of who led NEA. In 2025 the authority cut power to a first batch of six large industries, including Jagadamba Steels, Reliance Spinning Mills, Shivam Cement, Triveni Spinning Mills, Ghorahi Cement and Arghakhanchi Cement, over unpaid dues. Later, around 24 October 2025, NEA disconnected a further 18 industries, among them Panchakanya Steel, Cosmos Cement, Bishal Cement, Butwal Cement and several others, citing unpaid dedicated and trunk-line dues exceeding Rs 8 billion, acting under the Electricity Revenue Collection Regulations, 2078 BS after a 21-day notice.

Industry bodies warn that mass disconnections threaten output and jobs, with some reports citing around 25 major industries affected and roughly 15,000 jobs at risk. Meanwhile the matter continues to move through the courts, the Public Accounts Committee and even the anti-corruption commission, keeping a dispute that began during the load-shedding era very much alive years after the lights came back on.

The dedicated-feeder row is more than an accounting quarrel. It tests whether a state utility can charge premium rates for a special service without airtight metering evidence and timely regulatory approval, and whether large consumers can be compelled to pay years-old, back-dated bills they never accepted in real time. The answers will shape how NEA prices reliability for industry in future.

It also sits at the intersection of energy policy, industrial competitiveness and governance. Cement, steel and textile plants are among Nepal's biggest domestic manufacturers; abrupt power cuts ripple through construction, exports and employment. At the same time, unrecovered dues weaken NEA's finances and raise fairness questions for consumers who paid their bills in full.

Finally, the saga has become a case study in how technical utility disputes get politicised. The removal of a popular NEA chief in the middle of a collection drive, the shuttling of the case between panels, courts and parliamentary committees, and the recurring disconnection notices all illustrate why the topic keeps resurfacing in Nepali public life, and why a neutral explanation of the facts is genuinely useful.