Wholesale power tariff reduced by Tk 0.19

The Bangladesh Energy Regulatory Commission (BERC) has reduced the average wholesale price of electricity per unit from Tk 8.39 to Tk 8.20, a move that follows a significant public outcry over a recent hike in retail tariffs for low-income consumers.

This decision came nearly two and a half months after the previous wholesale price adjustment on June 3, 
when the per-unit rate was increased by Tk 1.39 from Tk 7.00 to Tk 8.39.

The June 3 order also set new retail electricity prices. However, the government's intervention, prompted by widespread reactions to the increased burden on lower-income groups, led to the reinstatement of the previous rates for lifeline consumers (those using up to 50 units) at Tk 4.63 per unit and for those using up to 75 units at Tk 5.26 per unit the following day.

The reversal of the retail hike placed the Rural Electrification Board (REB) under significant financial strain. At the time, the BERC had indicated that a future reconciliation of wholesale power tariffs was forthcoming. While the new order reducing wholesale prices offers some relief to distribution companies, it simultaneously increases the financial losses for the state-owned Bangladesh Power Development Board (BPDB).

In response to queries regarding the financial implications, BERC Chairman Jalal Ahmed said that the previous order estimated a subsidy burden of Tk 41,000 crore. He further explained that the reduction in wholesale prices is expected to increase the required subsidy by an additional Tk 1,500 to Tk 1,700 crore.

The new wholesale tariff order sets specific per-unit prices for various distribution entities. The weighted average price for the Rural Electrification Board has been fixed at Tk 9.64, while Westzone Power Distribution Company will pay Tk 10.44. The Bangladesh Power Development Board's rate is set at Tk 11.14, Dhaka Electricity Supply PLC (DESCO) at Tk 12.05, Dhaka Power Distribution Company (DPDC) at Tk 11.89, and Northern Electricity Supply PLC (NESCO) at Tk 10.45 per unit.

Although the BERC issued the new order after a gap of roughly two and a half months, it has been made effective from the billing month of June.

Crucially for consumers, the commission has clarified that this adjustment in wholesale prices will have no impact on their electricity bills. 

The retail rates, as reinstated for lifeline consumers and applicable to other categories, remain unchanged. 

The wholesale price cut is an internal adjustment between the generation authority, the BPDB, and the distribution companies, aimed at mitigating their financial imbalances without passing on any additional cost or benefit to the end-user.