Decision on retail power tariff likely by January 30

Evaluation committee for 15.43% power tariff hike at retail level

Dhaka
January 08, 2023, 10:53 PM
by UNB NEWS

UNB News
Dhaka
Publish- January 08, 2023, 10:53 PM
UNB NEWS
Update- January 09, 2023, 09:03 AM

Decision on retail power tariff likely by January 30

Collage: UNB

The decision on retail power tariff is likely to be announced by January 30.

“We want to announce the commission’s decision by January 30,” said Abdul Jalil, chairman of the Bangladesh Energy Regulatory Commission (BERC), while making his concluding remarks at the end of the public hearing on the proposals of the distribution entities to raise power tariff at the retail level.

Other members of the commission were present on the occasion.

The four-year tenure of the chairman and some other members of the regulatory body is scheduled to expire on January 30.

Earlier, the technical evaluation committee (TEC) of BERC recommended raising the weighted average tariff of electricity by 15.43 percent at the retail level against the demand of the distribution companies for hiking it by about 20 percent.

The recommendation of the evaluation committee was placed at the public hearing today that began in the city’s BIAM Auditorium at 10 am.

The committee suggested setting the weighted average retail tariff at Tk8.23 against the existing Tk7.13 per unit (each kilowatt hour) with a hike of Tk 1.10 per unit.

However, the five-member commission, headed by its chairman Abdul Jalil, will make the final decision within the next 60 days as per the latest amendment to the BERC Act 2010.

All the six state-owned power distribution bodies - Bangladesh Power Development Board (BPDB), Bangladesh Rural Electrification Board (BREB), Dhaka Power Distribution Company Limited (DPDC), Dhaka Electric Supply Company Limited (Desco), Northern Electricity Supply Company PLS (Nesco), and West Zone Power Distribution Company Limited (WZPDCL) - submitted their proposals following BERC’s decision on November 23 last year to hike the bulk power tariff by 19.92 percent with effect from December 1.

The lone state-owned transmission entity Power Grid Company of Bangladesh (PGCB) also placed a separate proposal for raising wheeling charges.

The state-owned BPDB first placed its proposal on November 23, seeking a 19.44 percent hike in retail tariff. After that, all other distribution entities also placed almost the same proposal.

Participating in the public hearing, all the consumer rights groups, including the Consumers Association of Bangladesh (CAB) strongly opposed the proposals of the distribution and transmission entities.

CAB Vice-President ASM Shamsul Alam said the initiative to increase the electricity tariff at the retail level is against the public interest.

“Instead of containing corruption, irregularities, and system loss in the power sector, the government is trying to find an easy solution through raising tariff,” he said.

“If the electricity tariff is raised even further, it will further push up inflation in 2023, which will only intensify public sufferings and the common people will feel the pinch as they will have to pay the ultimate price,” he added.

As per the latest number, the financial loss of the BPDB, the principal organisation in the power sector and also the single buyer of electricity from private sector power plants, is likely to increase by Tk18,094 crore in one year.

According to the BPDB’s own latest estimates, the financial loss will cross Tk48,000 crore in the 2022-23 fiscal from Tk29,915 crore in FY22, an increase of almost 67 percent.

Sources said the BPDB’s revenue deficit has further increased due to its purchase of electricity at a higher price and sale at a lower price, the hike in petroleum fuel prices and also the increased exchange rate of the US dollar.

Officials said the recent 19.92 percent hike in the bulk tariff may help the BPDB reduce its loss by only Tk5,000 crore while a huge revenue deficit will remain a big burden.

However, the bulk power tariff hike put pressure on power distribution companies to submit their retail tariff hike proposal to BERC to cover their own revenue gaps.