The Bangladesh Energy Regulatory Commission (BERC) is likely to make an announcement about the adjustment to bulk electricity tariff on Thursday.
Md. Maqbul-E-Elahi Chowdhury, Member of BERC (Gas), confirmed the authenticity of the decision on the adjustment of the bulk electricity price. However, he declined to say anything about how much the power price will increase.
The energy regulator is going to announce its decision at a time when the country has been experiencing nagging power crisis and the consumers are suffering 5-6 hours of load-shedding every day.
On the other hand, the Power Division has come under tremendous pressure from the Finance Ministry to raise power tariffs to receive its subsidy as financial support.
Energy experts said any adjustment for bulk power tariffs will not directly impact the current retail tariffs of electricity. But it will have an impact on the power distribution
companies, which buy electricity in bulk from the BPDB to sell it to their retail consumers. It means if any upward adjustment comes from the regulator, the power distribution companies subsequently raise electricity tariffs at retail level.
The BERC Act has a provision to issue an order within 90 working days after the public hearing. The public hearing on the adjustment of bulk tariff was held on May 18.
At the public hearing, a technical committee of BERC had recommended increasing the bulk power tariff by 57.83 percent.
The committee recommended increasing the bulk power price by Tk 2.99 per unit against BPDB's proposal for raising it by Tk 3.39 per unit.
Sources said the bulk price of electricity may increase by 10-15 percent. BERC has already completed all preparations for price adjustment.
In the last 12 years, electricity prices have gone up by 118% at bulk level and 90% at consumer level. Energy experts termed the proposal to hike power prices “illogical and unjustified”.
Cutting waste of power, systems losses, taxes on fuel and corruption will bring power prices to tolerable level, they said.
Currently, BPDB is selling wholesale power at Tk 5.15 per unit, and the government is also providing subsidy of Tk 3.39 per unit. The agency proposed increasing the price to Tk 8.56 per unit without subsidy, but BERC recommended tariff hike by Tk 8.16 per unit.
Earlier, BPDB had proposed a 65.57 percent hike in bulk electricity tariffs on the pretext of BERC's raising of natural gas tariffs and hike in oil prices on the international market. However, the proposal and recommendation to hike up the price was strongly opposed in the public hearing.
The bulk price of electricity is increased for the Power Development Board (PDB). PDB provides electricity to the distribution companies at this price at consumer level. The technical committee, in its recommendation, said it would not be possible for them to implement the decision on bulk prices unless prices were raised at consumer level.
Consumers, different rights bodies, top organizations of traders and their representatives had strongly opposed the proposal and recommendation to hike electricity prices. They raised their voices during public hearings organized by BERC.
The top organizations of traders told the public hearing that despite the increase in the production capacity, there was no planned development in the power sector.
As a result, electricity generation costs have risen. The term of high cost of rental power plants (Quick Rental) has been repeatedly extended without shutting down. The generation cost also rises for the operation of low-efficiency power plants instead of high-efficiency plants.
Energy experts said high-priced liquefied natural gas (LNG) is being imported without laying emphasis on exploration and production. This burden of extra cost is also putting pressure on the consumers.
Consumers Association of Bangladesh said that electricity generated from coal is being imported from abroad at Tk 6.60 per unit. And the cost of electricity generated from coal in the country is Tk 8.71 per unit. PDB's power plant in Bhola is being run at only 38 percent 'plant factor'. This is doubling the production cost.
The National Load Dispatch Center (NLDC), a PGCB agency, controls the power plants. CAB's allegation against them is that they are increasing production costs by running low-efficiency power plants.
CAB has suggested some ways to address the PDB deficit without raising the prices. They have calculated that it is possible to keep a surplus of Tk 3,372 crore by adjusting the deficit of Tk 40,000 crore at wholesale level.
Energy expert Prof M Shamsul Alam said that diesel-based power plants are closed for being expensive, and for the same reason, LNG import from the spot market is stopped. “So, electricity prices should be reduced now.”
Earlier in June, BERC raised the gas prices by 22.78 percent, on an average, for all users, despite repeated opposition from the consumer rights groups. After a hike in gas prices, the cost of living has also increased.
Currently, the country's installed power generation capacity is about 25,500 MW. It now generates about 12,000 MW against the demand for around 14,000 MW and resorts to load-shedding of about 2,000 MW.