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Dhaka Monday,  Jun 27, 2022

BERC Recommends 58% Hike In Bulk Power Tariff Rejecting BPDB’s 65%

A technical evaluation committee (TEC) of Bangladesh Energy Regulatory Commission (BERC) at a public hearing on Wednesday recommended a 57.83% hike in bulk power tariff against 65.57% sought by the state-owned the Bangladesh Power Development Board (BPDB).

However, the participating consumer civil right groups including representatives from different business bodies at the hearing vehemently opposed any big rise in power tariff right now when the people are struggling with high inflation caused by high commodity prices.

They termed the proposal an illogical one and said the BPDB can offset its revenue deficit through removing irregularities, corruption and unethical practice in buying electricity from inefficient private power plants at higher rates.

The 5-member highest decision-making body of the BERC did not give any decision on the appeal of the BPDB as the relevant law allows the watchdog body to take 90 days before a final decision.

The public hearing was held at the BIAM Auditorium in the city with BERC chairman Abdul Jalil in the chair while all the four other members of the commission were present.

BPDB’s General Manager (commercial) CFK Musaddek Ahmed placed the bulk power tariff proposal at the hearing while advisor of Consumers Association of Bangladesh (CAB) Dr M Shamsul Alam, Prof Ijaz Hossain of formal Buet, Federation of Bangladesh Chambers of Commerce and Industries (FBCCI) Vice President Mostafa Azad Chowdhury, former president of Metropolitan Chamber of Commerce and Industry (MCCI) Barrister Nihad Kabir, Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) Senior Assistant Secretary Sajib Hossain, among others, opposed the proposal.

Placing the proposal, BPDB general manager said the organization will require revenue of Tk74,189 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 Tk5.17 per unit, it will have to face a deficit of Tk30,251 crore in revenue in the calendar year 2022. So, the BPDB needs to raise the power tariff by 65.57% to Tk8.56 per unit from Tk5.17”, he told the hearing, adding that this has been calculated without the government’s subsidy.

He also claimed the increase in the prices of imported gas, liquid petroleum fuels and coal have increased its power generation cost which compelled the organization to move the power hike proposal.

BERC technical evaluation committee member M Quamruzzaman disagreed with the calculation of the proposal and said the organization could raise its bulk power tariff by 57.83% to Tk8.16 per unit from existing Tk5.17.

Opposing both the proposals of BPDB and the TEC’s recommendations, Dr M Shamsul Alam raised about 60 questions to challenge the justification of the BPDB’s arguments.

He said BPDB has been buying electricity from very inefficient power plants at much higher rates without maintaining any merit orders. In this case, the efficient and lost cost power plants of BPDB are being kept idle or suspended.

“Purchase of electricity from higher rated plants instead of lower rated plants is a crime anti-nation activity”, he added.

He said if the efficient combined cycle power plants are given preferences in power generation, the cost of power generation will substantially fall and the BPDB will not require raising the power tariff.

Dr Ijaz Hossain said power tariff could be raised in phases, not in one go. A 57% hike in a single phase has never happened.

“You have to look at the irregularities and corruption to lower the power production cost”, he told BERC.

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