Bangladesh Energy Regulatory Commission (BERC) has recommended against Dhaka Power Distribution Company Limited’s (DPDC) proposal to raise the power tariff at the consumer level.
BERC’s technical evaluation committee said the DPDC is going to make an estimated profit of Tk290.9 crore in FY2014-15 with the current bulk tariff, so the price hike at the consumer level is not required.
However, the committee recommended increasing the average retail power price per unit (one kilowatt-hour) by 3.09% for Bangladesh Power Development Board (PDB).
The recommendations came at a public hearing yesterday on the the DPDC and the PDB’s proposals of power price hike by17.85% and 22%, respectively.
PDB Director (commercial operation) M Taslim Hossain and DPDC Managing Director Nazrul Hasan presented their respective proposals at the hearing.
The hearing, which took place at the Trading Corporation of Bangladesh building in the capital, was also attended by BERC Chairman AR Khan, members Dr Salim Mahmud, Delwar Hossain and Md Maksudul Haque, and other stakeholders.
“We think a company should not raise retail power tariff as long as they are making profit,” said Shamsul Alam, energy adviser at the Consumer Association of Bangladesh, during the hearing.
The PDB said the retail price of power now stands at Tk6.10 per unit. If the BERC approves the proposed price hike, the price to increase to Tk7.47 per unit.
If the retail price is not increased by the proposed percentage, the government will have to suffer an annual loss of Tk1,158 crore, the PDB told the BERC committee.
Mostaque Ahmed, chief of the evaluation committee and a director at the BERC, said if the proposed bulk power tariff was increased by 5.16%, the operating profit in FY2014-15 for the DPDC would be around Tk4,952.5 crore for around 681.95 crore units.
According to the DPDC, the current operating profit will be around Tk5,034.23 crore, which is Tk around 81.75 crore higher than the proposed profit. Even with the current bulk rate, the DPDC is estimated to make a profit Tk290.9 crore, which is why the DPDC does not need to increase the price, the BERC director said.
He also said the PDB’s operating profit would be around Tk6,590.25 crore for 934.22 crore units in FY2014-15 if the recommendation was followed.
With the current rate, the PDB’s operating profit is estimated to be around Tk6,137.97 crore – Tk 452.29 crore less than the proposed plan, which is why the PDB needs to increase the retail price by 7.83%, he added.
The BERC technical evaluation committee recommended increasing the bulk power tariff on Tuesday, as well as PDB’s average per-unit tariff by 5.16%. The existing bulk tariff is Tk4.70 per unit.
