The government is preparing to introduce a seasonal electricity tariff that could reduce consumer electricity prices during the rainy season, when Nepal generates more power than it can fully consume.

The initiative is being pushed by the Nepal Electricity Authority (NEA) which formed a committee on July 29 to review electricity tariffs following a proposal from Energy Minister Biraj Bhakta Shrestha.

The committee is coordinated by Anshu Kiran Shahi, an NEA Board member, and includes representatives from the Energy Ministry, the Federation of Nepalese Chambers of Commerce and Industry, energy experts, and consumer and finance specialists.

The central issue is Nepal's seasonal power surplus. During the rainy months, electricity generation rises sharply, creating periods when excess power is wasted. According to the committee coordinator, the NEA is losing billions of rupees every month because of this unused electricity.

Rather than allowing the surplus to go unused, the proposed seasonal tariff would make electricity cheaper during periods of excess supply. The government expects lower prices to encourage households and industries to consume more electricity when generation is abundant.

Industries are also expected to receive concessions under the proposed system. The committee is examining how much tariffs could be reduced for industrial consumers during the monsoon season and how such discounts could increase electricity consumption.

The proposal comes as the government faces criticism over higher electricity-related taxes. The Energy Ministry is therefore exploring tariff concessions as a way to reduce the burden on consumers while also addressing the problem of surplus electricity during the rainy season.

The policy effectively seeks to solve two problems at once: reduce electricity costs when supply is abundant and create more domestic demand for power that would otherwise be wasted.

However, the exact tariff structure, size of the discount and implementation mechanism have not yet been finalized. The committee is still reviewing the options and coordinating with relevant stakeholders.

If implemented, seasonal pricing could shift Nepal's electricity market toward a model where power prices reflect the availability of electricity across different seasons, rather than remaining uniform throughout the year.