Fifteen local urban bodies which have been identified as defaulters by the state electricity board would have to face a 20% deduction in government grants.
According to sources, 15 municipal councils, including those of Solan, Parwanoo, Baddi, Nahan, Paonta Sahib, Bilaspur, Ghumarwin, Hamirpur, Dharamsala, Palampur, Nurpur, Nagrota, Dalhousie, Mandi and Kullu, had not paid their electricity bills for the past eight years.
The directorate of urban development, with the approval of the state cabinet, had decided to regularly deduct a part of the government grants they would receive and pay the amount to the power board, said urban development joint controller (finance) Diwakar Kamal.
Sources said the local bodies owed around Rs 20 crore to the electricity board, and the issue had been raised repeatedly, but to no avail.
The state government had released grants amounting to Rs 6.8 crore in the first quarter of the fiscal year, of which Rs 96.15 lakh were retained by the directorate.
Kamal said the municipalities had been directed to reconcile, failing which the deducted amount would be used to pay the outstanding bills. Similar action could be taken against nagar panchayats, who are yet to receive grants, and municipal corporations as well.