Kulman Ghising: sheer luck or calculated risk?

All these years we thought that there is a huge mismatch between demand and supply of electricity. Load shedding for 12 to 16 hours a day during dry season was quite common and we were prepared for the same thing this year too.

But a miracle happened this time. We are now getting 24 hours of electricity in the capital even in this season. Nobody thought it would be possible. But thanks to Kulman Ghising who is now in charge of NEA.

I have been trying to dig out how is it possible and why did not the previous MDs of NEA and concerned authorities take similar actions. How did Kulman Ghising do that?

Well, I must say he is extremely lucky in a sense that few private hydropower projects started generating energy this year (around 100 MW install capacity). However, this is not enough to solve the chronic energy shortage (at least this is what we assumed previously).

According to NEA, we have a shortfall of around 585 MW. In addition, we had power cuts for few hours even in this year during wet season. And this was before Kulman Ghising took the driving seat.

In his interviews, he said the major work he did to end the load shedding was the proper load management which he did by changing transformers where needed. Still, this measure sounds too simple. From 12-16 hours to zero hour load shedding by just streamlining the transformers will do the trick is something hard to believe. After all, we were forced to live in the dark for a decade.

People were quick enough to accuse him for draining out Kulekhani hydropower project, the only storage project in Nepal. If this is the case then we are going to face a severe power outage from Feb-March. But he clearly clarified, time and again, that this is not the case.

So how did he hit the bull's eye?

One striking measure he pointed out during his interviews was "equitable distribution of power". This means power to people.

He did so by reducing dedicated lines. Previously, the dedicated lines were mostly distributed to commercial/ industrial users. There used to be 183 but now it is limited to 40 lines only (source: Speaking truth to power). However, cutting these lines comes with a price.

The tariffs NEA charge to its residential and commercial/industrial consumers is different. The latter pays more to NEA. So any reduction in supply to the industrial users can cause negative impact in NEA's financial health. Just to remind you that NEA is consistently making huge losses every year.

FY	2072/73	2071/72	2071/71
Energy Revenue	NRs. 32.210 billion	NRs. 30.48 billion	NRs. 27.624 billion
Net Loss	NRs. 11.795 billion*	NRs. 6.51 billion	NRs. 5.7 billion

* The huge increment of Net Loss on the fiscal year 2072/73 is due to the economic blockade imposed by India. It is a different story.

Besides reduction in the dedicated lines, he is planning to increase the import of electricity from India by additional 220 MW in next two months (source: India to export 220 MW electricity to Nepal) It will be possible after an upgrade of Dhalkebar-Muzzaffarpur cross boarder transmission line which is planned to complete in few weeks.

However, import of electricity from India is not that cheap. GoN paid NRs. 3.96 billion for the compensation of financial loss resulting from power purchase from India for the year 2072/73. 

All these decisions are going to take its toll in NEA's financial statement, i.e. cutting dedicated lines (residential tariff < industrial tariff) and increasing expensive electricity import from India. Many people think that he will be criticized when the financial statements of NEA for this fiscal year is out. It is the moment everyone who opposes the appointment of Kulman Ghising is waiting for.

Ironically, his luck seems to be solid again. He was appointed on mid-September at a time when Electricity Tariff Fixation Commission (ETFC) hiked the electricity rate by an average of 19 percent. 

This increment will translate to additional revenue of NRs. 5 to 6 billion (10 months) in this fiscal year. With this amount, he is in a position to take risks without any doubt. In fact, nobody will raise finger at him if just manage to incur loss as NEA used to record in the previous years. He will always be remembered as "load shedding hero". At the end of the day, it does not matter how he eliminated load shedding (cutting dedicated lines and importing expensive electricity) as long as he is able to restrict the NEA's loss in line with the past trend. And I think he is in the right track. 19% hike will boost his confidence big time.

All these incidents and his actions made me believe that he had done the research properly before taking the post. But it does not mean that he is just there to give final finishing touch for somebody's hard work. 

Well, one can say Dhalkebar-Muzzaffarpur was not constructed overnight. But the point here is about understanding the need of this cross boarder transmission line. The credit for expediting the construction work certainly goes to him. Also, it requires tremendous amount of courage to change the way NEA load management is done from the way it used to be (for whatever reasons in the past).

In addition, Kulman Ghising is doing everything he can to minimize the system loss which stands at 25 percent (technical and non-technical loss). The collection of NRs. 321. 9 million from default customers (NEA's press release) and his plan to distribute meters to Sukumbaasi are praiseworthy (Sukumbaasi cannot have meters until now which means they are forced to steal electricity).

In short, he certainly seems to be a well-versed person on the subject and takes the calculated risk. Hats off to you!