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Power tariff hike: Countdown begins amid opposition

  • Published at 02:06 am December 4th, 2019
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The government has a target to raise the power generation capacity to 24,000MW and 40,000MW in 2021 and 2030 Syed Zakir Hossain Syed Zakir Hossain/Dhaka Tribune

BERC is obliged to announce the new tariffs within 90 days after a mass hearing

The countdown to a potential power tariff hike from January starts on Wednesday, as the Bangladesh Energy Regulatory Commission (BERC) on Tuesday finished hearing proposals from seven power production, distribution, and transmission companies — amid opposition to the proposals from various quarters.

On the first of the four-day hearing, BERC had also heard the proposal placed by the Bangladesh Power Development Board (BPDB) seeking a 23.28% rise in bulk prices starting from 2020, to tackle a massive potential financial deficit of Tk8,560.6 crore.

If the bulk tariff and wheeling charge see an increase, BPDB and five other distribution companies have said that the retail prices must be hiked too.

Power tariffs were last hiked on November 23, 2017. At that time, BERC on average had raised the tariff by 5.3% or Tk0.35 per unit at the retail level.

Bulk power consumers were exempted then. BERC last raised the power tariff for bulk consumers on September 1, 2015, by Tk0.23 per unit.

According to the BERC law, the energy regulatory body is obliged to announce the new tariffs within 90 days after a mass hearing.

on Tuesday, the proposals from Bangladesh Rural Electrification Board (BREB) and West Zone Power Distribution Company Limited (WZPDCL) seeking increased power tariffs were heard.

Demanding “adjustment” of retail tariffs in line with bulk prices, both companies cited quality services, repayment of loans, infrastructural development and quality manpower as some of the major reasons behind their decision to seek the hike.

BERC officials at the mass hearing on power tariff hike proposals at TCB auditorium in Dhaka on Thursday, November 28, 2019 | Focus Bangla

WZPDCL sought a Tk0.18 per kilowatt-hour (kWh) raise in distribution charge to Tk1.40/kWh; while BREB proposed to lower the charge to Tk1.51/kWh, down from Tk1.63.

On Thursday, the Power Grid Company of Bangladesh Ltd (PGCBL) had proposed to raise the transmission or wheeling charges by 52% in 2020.

The wheeling charges were last raised on August 27, 2015, to Tk0.2744/kWh for 230kV lines, Tk0.2768/kWh at 130kV lines, and Tk0.2791/kWh at 30kV lines.

During the hearing, Dhaka Electric Supply Company Limited (Desco), Dhaka Power Distribution Company Limited (DPDC) and Northern Electricity Supply Company Limited (Nesco) also pushed for the “adjustment” in the tariffs.

Suggested hikes opposed

Meanwhile, experts, consumers, businessmen, and political leaders protested the proposals throughout the mass hearing.

At the closing session, Consumers' Association of Bangladesh’s (CAB) Energy Adviser Prof M Shamsul Alam said all electricity companies had failed to prove that their proposals were logical.

He said that growing expenditure through extravagant plans and corruption in the power sector has added to the huge financial deficit.

“The existing production deficit is around Tk8,000 crore, for which the hike is sought from next year. But the logic and justification for the proposal could not be proven during the hearing,” said the energy expert.

Communist Party of Bangladesh’s leader Ruhin Hossain Prince said they told BREB that it was good to bring various areas under power coverage, but at the same time the company must keep an eye on irregularities.

“Electrification in rural parts of the country is a good thing. But who will drive the ghost of corruption out of the power sector?” he asked BREB officials, adding: “How can the mismanagement and wastage in the sector be addressed?”

BREB Chairman Maj Gen (retd) Moin Uddin claimed that they have been taking a hard-line on corruption in the company, which by 2020 aims to provide 100% power coverage in the areas that falls under its jurisdiction.

“Our crackdown on anomalies is, was and will be in place,” he added.

Bangladesh Garment Manufacturers and Exporters Association (BGMEA) representative Anwar Hossain Chowdhury said a hike in power tariff will take a heavy toll on not only the masses but also the production sector.

“Therefore we don’t want the BERC to raise electricity prices,” he said.

Md Mohiuddin Ahmed, president of Bangladesh Mobile Phone Consumers’ Association, alleged that many officials and staff in the power sector take bribes from consumers while approving new electricity connections.

“This should not happen and the authorities must take prompt action against these corrupt officials,” he demanded.