The technical evaluation committee of the Bangladesh Energy Regulatory Commission (BERC) has recommended raising power tariffs at the consumer-level for two distribution companies.
The recommendation came yesterday after a public hearing on proposals by the Power Development Board (PDB) and the West Zone Power Distribution Company Ltd (WZPDCO) last month for hiking electricity prices by15.50% and 8.59% respectively to minimise losses from supplying electricity to retail customers at low cost.
The committee recommended increasing average per unit (each kilowatt-hour) tariffs for PDB and WZPDCO consumers by 6.66% and 7.51% respectively.
PDB serves 26.54 lakh consumers in Chittagong, Rajshahi, Sylhet, Rangpur metropolitan area and most district headquarters of the country. WZPDCO has about eight lakh customers in 21 districts and 20 upazila towns, including Khulna, Bagerhat, Jessore and Barisal.
BERC chairman AR Khan, members Salim Mahmud, Delwar Hossain and Md Maksudul Haque, along with other stakeholders attended the public hearing at the commission’s office in the capital.
The announcement of fresh electricity tariff hike may be made by the end of this month or the first week of next month, but the tariff hike will have retrospective effect from March 1, 2014, a director-level officer of BERC told the Dhaka Tribune on condition of anonymity.
Meanwhile, Shamsul Alam, energy adviser of the Consumer Association of Bangladesh (CAB), opposed the BERC move to raise power tariffs during yesterday’s hearing.
“You should take steps to decrease the electricity rate, rather than increasing it,” the CAB adviser said, addressing the commission.
“The cost of electricity has been rising as the government adopted short-term measures of installing dozens of high-cost diesel and furnace oil-fired rental power plants to ease the country’s mounting electricity crisis.” Alam said.
However, BERC chairman AR Khan said: “Everything has a cost and you have to pay for that. Price of everything is increasing day by day. So, there is no option than increasing the power tariff. ”
“If anyone has any question, he can place it to BERC by March 6. We will announce the decision of the hearing soon,” Khan added.
During the hearing, members of some left-leaning parties, including CPB, also requested the commission not to increase the tariffs. Protesters under the banner of Gana Sanghati Andolan also staged a mass sit-in outside the BERC building in Karwan Bazar.
Power division officials said the move for new tariff hikes got momentum after getting the nod from Prime Minister Sheikh Hasina, who is also the minister of power, energy and mineral resources, on February 6.
PDB general manager (commercial) Mostaque Ahmed and WZPDCO managing director Abul Kalam Azad presented their respective proposals.
“Our technical committee found their proposal to hike power tariffs to be justified,” Md Abul Kasham, chief of the evaluation committee and BERC director (power), said during the hearing.
“For the sustainability of the state-owned organisation, BERC can allow it to raise power tariffs by 6.66% to help the PDB reach the break-even point,” Abul Kasham said.
On average, PDB sells per unit of electricity for Tk6, against its supply cost is Tk6.93, officials said. WZPDCO’s retail rate is Tk5.97, while its supply cost is Tk6.44, thus, incurring a loss of 47 paisa per unit.
Since 2009, BERC has increased power tariffs six times. In the latest increment made in September 2012, retail price of electricity rose by 15%, from the previous rate of Tk5 per unit. The tariff at the bulk level was raised by 17% to Tk4.70.
Meantime, BERC will conduct a public hearing today on proposals made by the Dhaka Power Distribution Company (DPDC) and the Dhaka Electric Supply Company Ltd (DESCO) to hike tariffs by 23.50% and 15.90% respectively.
BERC will also conduct a public hearing tomorrow on proposals by the Rural Electrification Board (REB) to raise tariff by12.58%.
According to the committee’s recommendation, PDB’s operating revenue this fiscal year (2013-14) will be Tk5,715.16 crore for 849.26 crore units, which is Tk339.49 crore less than its estimation of Tk5,375.67 crore for FY 2012-13.
WZPDCO’s FY 2013-14 operating revenue will be Tk1351.09 crore for 235.82 crore units, Tk91.35 crore less than its Tk1259.74 crore estimation for 2012-13 to reach the break-even point.