The Rural Electrification Board (REB) yesterday echoed four other power distribution companies and recommended a power price hike, in a bid to tackle the losses caused by the “lifeline” tariff for low-tier consumers.
The REB officials said this on the last day of the three-day long public hearing held by the Bangladesh Energy Regulatory Commission (BERC) to decide on a proposed power price hike.
The consumer group who fall under the lowest slab of zero to 75 unit consumption have to pay what is known as the “lifeline” tariff.
Brig Gen Moin Uddin, chairman of the REB – which supplies power to one crore of the total 1.4 crore consumers in the country, told the Dhaka Tribune that the REB has 85 lakh household consumers, of whom nine lakh consumers use 15 unit (each kilowatt-hour) power on an average and pay Tk90 each per month.
A further 55 lakh household consumers of the REB use more than 31 unit on an average a month and pay Tk136, he added.
“Marginal increase of tariff never affects this ultra-poor group, as they consume a very small amount of power. As a result, the REB has to pay about Tk50 as subsidy against every unit consumed,” Moin said.
The REB chairman said the losses would have been less if the board had more consumers, or if the existing consumers had used more units of power than the lowest slab. If the government failed to hike power tariffs, the REB would suffer losses worth Tk645 crore taka, he added.
With only 12 of the 72 Palli Bidyut Samity (PBS) currently making profits, Moin said: “Our Palli Bidyut Samity cannot make profit as they have small client bases.”
He added that supplying power for irrigation caused losses worth Tk0.41 per unit, while last year’s total loss amounted to Tk250 crore.
“We purchase every unit of power for irrigation at a cost of Tk4.26 and sell it for Tk3.85, and we have no other option than to increase the tariff rate.
“It is a financial mess. We are paying the debt service liability with our provident fund. At the same time, we fail to increase our tariff,” the REB chairman added.
Ijaz Hossain, a professor of Bangladesh University of Engineering and Technology, told the Dhaka Tribune that the REB needed the tariff to rise, as it would need more time to fix its losses. He also recommended that the government should give direct subsidy to the PBSs.
During the earlier days of the public hearing, West Zone Power Distribution Company Ltd, Power Development Board, Dhaka Power Distribution Company and Dhaka Electric Supply Company Ltd also demanded that the power tariff for the lowest slab be hiked, as the companies were also suffering losses from the low-income consumer group.
Meanwhile, the technical evaluation committee of the BERC yesterday recommended raising power tariffs at the consumer-level for the REB, which proposed raising tariffs by 12.58% per unit.
The committee recommended increasing the average per unit tariffs for REB consumers by 3.48%.
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.
Assuring that the BERC would make its decision soon, AR Khan said: “We had public hearings for the last three days and we will not make our consumers worried. We will give our judgment very soon.”
On the other hand, BERC director-level sources said the regulators have plans to set the lowest slab at zero to 30 unit, while adjusting the following slab at 31-200 unit, in order to keep the existing six slabs on the prepaid meters.
Members of some left-leaning parties, including Communist Party of Bangladesh and Gana Sanghati Andolan, also resquested the commission not to increase the tariffs and called for decreasing the lowest slab.
A consumer of Gaibandha, Shah Musfiqur Rahman, opposed any tariff hike as it would create discontent among the people and prices of all commodities would increase.
He demanded that minimum charge for electricity should be withdrawn, as it put extra burden on the low-income users.