Bulk power tariff hike likely soon

Staff Correspondent: The Bangladesh Energy Regulatory Commission (BERC) will announce its decision on the adjustment of bulk electricity tariffs tomorrow, officials said yesterday.
BERC Chairman Abdul Jalil told yesterday that a notice would be issued soon in this regard.
The BERC chief had earlier said that the regulator would announce the decision within October 14 as per its rule to announce any decision within 90 days from the conclusion of a public hearing.
The last public hearing on a proposal of the state-owned Bangladesh Power Development Board (BPDB) to raise bulk power tariff was held on May 18.
BERC extended the time for stakeholders to submit relevant documents for ending the hearing procedures.
From that additional time, BERC is now counting 90 days and the stipulated time will expire on October 14, said a BERC member. Energy experts said any adjustment in bulk power tariffs will not directly impact the current retail tariffs of electricity.
But it will have an impact on the power distribution companies, which buy electricity in bulk from the BPDB to sell it to their retail consumers. It means if any upward adjustment comes from the regulator, the power distribution companies will subsequently raise electricity tariffs at retail level.
The energy regulator’s decision is going to be announced at a time when the country has been experiencing a nagging power crisis and the consumers are suffering 5-6 hours of load shedding daily.
On the other hand, the Power Division has been under tremendous pressure from the Finance Ministry to raise power tariffs to receive its subsidy as financial support.
The BPDB has been incurring a huge financial loss due to its purchase of electricity from private power plants at a much higher rate and sell it to the consumers at a lower rate.
Against this backdrop, the BPDB placed a proposal to raise bulk power tariffs by 65.57 percent at the public hearing while a technical evaluation committee (TEC) of BERC recommended a 57.83 percent hike.
The 5-member commission makes the final decision following a public hearing after listening to arguments and counter arguments from the stakeholders on any proposal.
At the public hearing on May 18, consumer rights groups, including representatives from different business bodies, vehemently opposed any major rise in power tariff right now, as people are already struggling with high inflation caused by high commodity prices.
They termed the proposal illogical and said BPDB can offset its revenue deficit through addressing irregularities, corruption and unethical practice in buying electricity from inefficient private power plants at higher rates.
Placing the proposal, BPDB officials had said the organisation will require revenue of Tk 74,189 crore to generate 88,993 million kilowatt hours (units) of electricity to supply to the power distribution companies.
“But if the BPDB sells its electricity at the existing rate of Tk 5.17 per unit, it will have to face a deficit of Tk 30,251 crore in revenue in the calendar year 2022. So, BPDB needs to raise the power tariff by 65.57 percent to Tk 8.56 per unit from Tk 5.17,” said a BPDB top official at the hearing, adding that this has been calculated without the government’s subsidy.
The Power Division suspended operation of its diesel-fired power plants and also import of liquefied natural gas (LNG) following escalation of fuel prices in the international market as fallout of the Russia-Ukraine war.
As a result, though the country’s installed power generation capacity is about 25,50 MW, it now generates about 12,000 MW against a demand for around 14,000 MW and resorts to a load shedding of about 2,000 MW.