“BERC should not be allowed to raise electricity tariff more than twice in a year”, said Dr. Tamim, eminent energy expert, while addressing virtual dialogue, “COVID-19 - Power Sector in National Budget for FY2020-21: Allocative Priorities and Alternate Proposals”, organised by the Centre for Policy Dialogue.
He made the remarks against the backdrop of a bill placed in parliament to bring amendment to the existing Bangladesh Energy Regulatory Commission (BERC) law to allow it to raise power tariff more than one occasion in a year. Currently, it can only increase tariff once a year.
“If such bill is passed by the parliament, then the consumers will lose the discourse to protect their rights. The regulator will have enormous authority to raise power tariff as many occasions as it wants”, he observed.
He said this is not acceptable and the law should not allow regulator more than twice a year to raise tariff.
With CPD Chairman Professor Rehman Sobhan in the chair, the seminar was also addressed by energy expert Dr M Tamim, Former Power Secretary Dr Fouzul Kabir Khan, Power Cell Director General Mohammad Hossain, former additional secretary and Sreda member Siddique Zobair, and President of Bangladesh Independent Power Producers Association (BIPPA) Imran Karim, East West University Professor Dr A K Enamul Haque.
CPD Research Director Dr Khondaker Golam Moazzem make keynote presentation on the topic of the discussion while CPD Executive Director Dr Fahmida Khatun moderated the function.
Making his presentation Dr Khondaker Golam Moazzem said possibly the government introduced the BERC bill in parliament in order to increase its revenue from the consumers to meet the cash requirement to pay private sector producers.
“But I don’t think there is any scope for raising power tariff in the current situation”, he added.
He said Bangladesh has 40 percent overcapacity power generation for which the government has to spend Tk 9,400 crore to pay the private power producers as capacity payment.
“Generally, any country keeps 25 percent reserve capacity for stable power supply while it is 10 percent in developing countries. It was 63 percent in April this year.”
The overcapacity in generation will go up further if planned coal-fired power plant projects are implemented, he added.
Addressing the seminar State Minister for Power, Energy and Mineral Resources Nasrul Hamid, however, disagreed with the allegation on overcapacity generation and said that if the coronavirus situation was not created, there would have no overcapacity generation.
He said the country’s actual generation capacity is 16,000 MW against the demand of 15,000 MW.
“But due to Covid-19, demand dropped and it now stands at 12,000 MW”, he added.
He, however, said the power system master plan will be reviewed to lay priority on developing LNG-based power plants instead of coal-fired power plants under the new reality arose after coronavirus situation.
About the consumers’ frequent allegation on inflated electricity bills in recent days, he admitted that distribution companies did mistake in preparing bills as they had to prepare it on assumption basis due to the coronavirus situation.
“I do admit some 4-5 lakh consumers’ bills had problems as they got inflated bills,” he said advising them to contact the local power distribution companies to correct their bills.
Former power secretary Fouzul Kabir Khan said the government’s investment plan in the power sector should be reviewed immediately and stop the implementation of coal-based power plants to bring rationality in generation.
He said the Speedy Supply of Power and Energy (Special) Act should be repealed as it has been the root cause of inefficiency in power sector.
He said the government now should go for introducing merchant power plant policy to replace the exiting independent power producer (IPP) policy.