Bangladesh Energy Regulatory Commission officials at a public hearing at the commission on Wednesday proposed a 21 per cent increase in average bulk rate of electricity, at which the Power Development Board will sell it to distribution agencies, likely to be effective from February,
The officials also proposed that the government should allocate to the power board Tk 1,000 crore in subsidy each year, instead of Tk 600 crore, letting the country’s single buyer to break even.
Other stakeholders, however, expressed their concerns about the increase in the bulk rate of electricity as it will force the distribution agencies to increase retail prices of electricity.
An increase in the retail prices of electricity will increase public sufferings and affect agro-based and industrial productions, particularly of small and medium industries. Representatives of the Consumer Association of Bangladesh, Metropolitan Chamber of Commerce and Industries, Federation of Bangladesh Chambers of Commerce and Industry, other business communities and experts urged the commission to consider the affordability of the consumers before making any decision on increase in the bulk rate of electricity.
They said that the power board had failed to fulfil its commitments, including better supply of electricity, it made when the commission increased by 16 per cent the bulk rate of electricity in 2008 while the power board proposed to increase the price by 41 per cent.
FBCCI representative Imam Ali Hossain urged the commission to increase the bulk rate of electricity by a reasonable amount so that the next increase in power prices at consumer level would not exceed their affordability.
CAB representative Shamsul Alam said that consumers should not be affected because of the power generation at higher cost although the government had scopes to generate power at lower cost.
The commission on November 3, 2010 accepted a power board proposal for an increase in the bulk rate of electricity by more than 25 per cent each year for three consecutive years.
At an open meeting on January 5, the commission took cognisance of the proposal as the power generation cost was increasing because of an increased participation of the private sector in generation and dependency on expensive fuel oil to face acute power crisis immediately.
The power board also committed to ensure to increase power generation and minimise power outages if it was allowed to increase the bulk rate of electricity.
On behalf of the commission experts, Mohammad Bazlur Rahman, director of power of the commission, however, proposed that the commission should increase the average bulk rate of electricity by 21.09 per cent.
The power board will then sell electricity to the distribution agencies at an average rate of Tk 2.87 a unit instead of Tk 2.37.
Bazlur in his paper said that at this rate along with Tk 1,000 crore in subsidy, the power board will break even as its average buying and generation cost of electricity will be equal to the selling cost of electricity.
He proposed to increase the bulk rate of electricity for the Dhaka Power Distribution Company by about 28 per cent, for the Dhaka Electricity Supply Company by 27.59 per cent, for the West Zone Power Distribution Company by 16.55 per cent, the Rural Electrification Board by 14.34 per cent and the power board itself by 18.59 per cent.
He brushed aside the power board’s plan for multi-year power tariff increase as it would be a violation of the Bangladesh Energy Regulatory Act 2003.
