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Electricity tariff set for a hike

BERC holds public hearing today

Published : Wednesday, 18 May, 2022 at 12:00 AM  Count : 833

Bangladesh Energy Regulatory Commission (BERC) will hold a public hearing today (Wednesday) on a proposal for raising electricity tariff to Tk 8.58 from the existing Tk 5.17 per kilowatt hour (each unit) at bulk level.
The BERC increased the bulk and retail tariff of electricity last on February 27 in 2020.
All the state-owned power distribution companies have already submitted their respective proposals to the BERC to raise the power rates at retail level but the BERC is going to hold public hearing on bulk tariff proposals keeping pending the request for raising retail price.
BERC member Syed Mokbul-e-Elahi Chowdhury said they want to first settle the bulk tariff proposal.
'This time we want to keep the hearing only on the bulk tariff proposal... the issue of retail tariff will be settled later by the commission,' he said.
If the natural gas tariff increases by 100 per cent, the power tariff has been proposed to increase to Tk 9.14 per kilowatt hour.
The Commission also sought an additional increase of the power tariff to Tk 9.27 per kilowatt hour subject to rise of the gas tariff by 125 per cent.
The BPDB is purchasing the electricity as a single buyer from local and foreign power producers. It sells to the electricity to five distribution companies.
"We are set to conduct the public hearing on electricity tariff hike as per Bangladesh
Energy Regulatory Commission Act-2003 as they submitted the proposal which the technical committee of BERC has endorsed," a BERC release said.
The Commission will hold the hearing at Biam Auditorium in the city from 10:30am to 5:00pm. Other stakeholders will also take part in the meeting.
The BPDB claims in its proposal to the energy regulator that it will incur a loss of Tk 30,251 crore in the current fiscal year if the bulk tariff is not raised.
"Power Development Board (PDB) in its tariff hike proposal said that the state-owned power generating authority would face a huge financial crunch if the Commission increases gas tariff by 10 per cent," the release said.
BERC has conducted a public hearing on gas tariff from March 21-24, as per BERC rule it should give its verdict within 90 days of the hearing.
BPDB in its proposal said that the price of diesel was increased by around 23 per cent , furnace oil price by 16.98 per cent and coal price in international market is also increasing the BPDB's power purchase costs from the Payra 1,320 megawatt (MW) coal-fired power plant that depends on imported coal.
The BPDB also pays plant owners 'capacity charge' which is around Tk 8,900.29 crore from the Finance Ministry in FY19.
Before FY10, it did not require adequate subsidy as most of the plants were less-expensive gas-fired ones. In 2010, the government planned to mitigate the then nagging electricity crisis through installing dozens of oil-fired rental and quick-rental plants. To run the plants government allowed entrepreneurs duty-free import of furnace oil to run plants with a 9.0 per cent service charge along with import costs as an incentive.
Currently, the furnace oil-fired plants have the capacity to generate around 7,000 MW and the diesel-fired ones have the capacity to generate around 1,000-MW electricity.
On the other hand, BPDB's purchase cost of electricity from the oil-based rental and quick rental power plants varies from Tk 3 per unit to Tk16 per unit and even more.
In 2010-11, the government provided a Tk 4,511.90 crore subsidy to BPDB which was increased to Tk 11,777.91 crore in the 2020-2021 fiscal year.
The rising price of fuel in the international market will increase the production cost to Tk 4.26 per unit in 2022.











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