The Nepal Electricity Authority slashed electricity leakage by 5 percentage points in the first five months of the current fiscal year. The state-owned power utility claimed that grid losses had dropped to 15.45 percent as of mid-December 2019 from 20.45 percent in mid-July 2018.

Ongoing improvements in the distribution network, timely collection of dues and strict theft control measures are the reasons behind the loss reduction, the Nepal Electricity Authority said.

The power utility is required to reduce losses to 18.45 percent by the end of the current fiscal year as per the performance contract signed by Managing Director Kulman Ghising with the Energy Ministry, but it exceeded the target within five months.

“This is an historic achievement,” Ghising told the Post. “It is the result of our effort to curb electricity theft and ongoing upgradation of the transformers, substations and transmission lines.”  If the power utility is able to keep electricity leakage at 15.45 percent till the end of the fiscal year, it will translate into savings of Rs7 billion, according to Ghising.

According to the utility, around 10 percentage points of the losses totalling 15.45 percent are due to technical leakage while the rest is due to electricity theft. “In order to bring down power leakage further, we have to reduce theft besides making our system more robust by replacing old transformers and upgrading substations and power lines,” said Ghising.  

Another reason behind the loss reduction is Ghising’s initiative to sign performance contracts with the chiefs

of the regional offices and distribution centres and giving them specific loss reduction targets. Just as Ghising has signed a performance contract with the ministry to reduce losses, he has signed similar contracts with his subordinates.

Officials achieving the targets set in the performance contract receive various cash and non-cash incentives while those failing to meet the target are considered inefficient and face action. As per the contract, the performance of the officials will be evaluated every four months.

The feat achieved by the Bhaktapur Distribution Centre in terms of loss reduction is phenomenal. The distribution centre brought down losses to 13.91 percent in the first five months of the fiscal year from a whopping 40 percent at the end of the last fiscal year. Lagankhel Distribution has brought down losses by 8.59 percentage points to 6.41 percent in the review period.

The regional office in Hetauda was successful in reducing leakage to 6.66 percent from 13.91 percent in five months. The power utility’s regional office in Kathmandu was able to reduce leakage to 7.79 percent in the first five months of the fiscal year from 7.94 percent at the end of the last fiscal.