CAB says BERC has favoured producers, not consumers
The Bangladesh Energy Regulatory Commission is going to submit a comprehensive proposal to the power, energy and mineral resources ministry on benchmarks for the prices and rents of power generation, transmission and distribution today (Tuesday).
A top official of the commission said that they were hoping to send it to the concerned ministry today as they had finalized the draft on Monday.
‘It will require some modifications that should be completed by tomorrow noon,’ he added.
However he said that implementation of their recommendations would require modifications in the existing Acts that deal with power generation and distribution.
The BERC has finalized the indicative prices for the electricity generated by oil-, gas- and coal-powered commercial power plants based on the ‘International standard project cost’, and the power project costs of the conventional and rental power plants of the Power Development Board, along with a set of parameters.
However the actual indicative prices were not revealed.
The BERC formed a committee that submitted a report on 14 July, 2010.
After some reviewing, the BERC set an indicative price of Tk 7.55 per unit of electricity generated by furnace oil-run plant and Tk 4.51 by imported coal-based plants that will be installed in the coastal areas, Tk 4.97 for imported coal-based plants that will be installed in central parts of the country, and Tk 4.09 for plants in front of coalmines. For dual-fuel plants, the price has been set at Tk 2.83 for the electricity be generated by using gas and Tk 7.60 by using furnace oil.
The BERC, on October 25, submitted the draft to a meeting for public hearing.
In that meeting the power experts and consumer associations’ representatives criticised the draft as it will favour the private entrepreneurs when the state-run agencies purchase electricity from them.
A representative of the Consumers Association of Bangladesh, Shamsul Alam, said that if any government agency wants to purchase electricity from commercial plants, the price should be fixed on a ‘case to case’ basis after taking into consideration the price of fuel and generation cost of electricity and soliciting public opinion.
He said that most of the parameters and standards set by the BERC to fix the prices were vague and significantly inflated and would benefit the private entrepreneurs, resulting in high prices of electricity for the consumers.
‘Heat rates’ for producing power, bank interest rates and rates of return were shown as much higher than actual, he added.
