Nepal Electricity Authority (NEA) is preparing to revise electricity tariff for household consumers to increase electricity consumption.

The authority has prepared a draft of new electricity tariff with reduced rates and perks for those who consume more electricity.

Kul Man Ghising, managing director of the NEA said, that they were lowering energy tariff to increasing electricity consumption. "Now that load-shedding has become a thing of the past, we want people to consume more electricity,” he said, adding: “When the country was seeing power cuts in the past, tariff had to be high in order to control consumption.”

According to Ghising, energy consumption will increase with the usage of electrical appliances by household and industrial consumers. “The tariff will be cheaper," he said.

So far, the NEA has been levying higher tariff on users who consumer more energy.

The energy ministry previously said it was preparing to bring consumption-based tariff policy to encourage consumption of electricity. Minister for Energy, Water Resources and Irrigation Barsha Man Pun said recently that around 1,000 MW of energy will be added to the national grid within current fiscal year. It will increase the supply capacity of NEA to 2,300 MW.

Nutan Prakash Sharma, secretary of the Electricity Regulatory Commission, said that the new tariff will be determined on the basis of regulatory requirements. “The commission will hold public hearing before preparing the tariff. The new tariff needs to address the insufficient revenue pattern as the revenue needs to be reasonable for so many reasons,” he added.

Sharma, however, said that the commission had not received tariff revision proposal till Wednesday afternoon. “We had asked them to make some changes to the proposal that they submitted to us previously,” he added.

After receiving proposal from the NEA, the commission will hold needful study before finalizing the new tariff.

The NEA has been charging household consumers on the basis of units of electricity consumed. It has classified its household consumers into seven categories – using 0-20 units, 21-30 units, 31-50 units, 51-150 units, 151-250 units, 251-400 units, and more than 400 units per month.

According to the draft proposal for tariff revision, consumers using less than 10 units will have to pay only the minimum charge. Almost one million consumers use less than 10 units of electricity in a month, according to NEA.