Public Hearing: Evaluation committee for 15.43 pc power tariff hike at retail level

Technical evaluation committee (TEC) of the Bangladesh Energy Regulatory Commission (BERC) has recommended raising the weighted average tariff of electricity by 15.43 percent at retail level against the demand of the distribution companies for hiking by about 20 percent at retail level.

The recommendation of the evaluation committee was placed at the public hearing that began in the city’s BIAM Auditorium at 10 am.

The committee suggested setting the weighted average retail tariff at Tk 8.23 against the existing Tk 7.13 per unit (each kilowatt hour) with a hike by Tk 1.10 per unit.

However, the five-member commission, headed by its chairman Abdul Jalil, will make the final decision within the next 60 days as per the latest amendment to the BERC Act 2010.

All the six state-owned power distribution bodies-- Bangladesh Power Development Board (BPDB), Bangladesh Rural Electrification Board (BREB), Dhaka Power Distribution Company Limited (DPDC), Dhaka Electric Supply Company Limited (Desco), Northern Electricity Supply Company PLS (Nesco), West Zone Power Distribution Company Limited (WZPDCL) submitted their respective proposals following the BERC’s decision on November 23 last year to hike the bulk power tariff by 19.92 percent with effect from December 1.

The lone state-owned transmission entity Power Grid Company of Bangladesh (PGCB) also placed a separate proposal for raising wheeling charges.

The state-owned BPDB first placed its proposal on November 23 seeking a 19.44 percent hike at retail level tariff and subsequently all other distribution entities also placed their respective proposals seeking almost identical proposals.

Participating in the public hearing all the consumer right groups including Consumers Association of Bangladesh (CAB) vehemently opposed the proposals of the distribution and transmission entities.

CAB vice president ASM Shamsul Alam said that the initiative to increase the electricity tariff at the retail level is against public interest.

“Instead of containing corruption, irregularities, and system loss in the power sector, the government is trying to find an easy solution through raising tariff”, he said.

“If the electricity tariff is raised further, it will further push up inflation in 2023, which will only intensify public sufferings and the common people will be the ultimate victim as finally they will pay the price”, he added.

As per the latest statistics, the financial loss of state-owned Bangladesh Power Development Board (BPDB), the principal organisation in power sector and also the single buyer of electricity from private sector power plants, is likely to increase by Tk 18,094 crore in one year.

According to BPDB’s own latest estimates, the financial loss will cross Tk 48,000 crore in the 2022-23 fiscal from Tk 29,915 crore in the fiscal year 2021-22, an increase of almost 67%.

Sources said the BPDB’s revenue deficit has further increased due to its purchase of electricity at higher price and sale at lower price, the hike in petroleum fuel prices and also the price escalation of US dollars.

Officials said the recent 19.92 percent hike in the bulk tariff may help the BPDB to reduce its loss by only Tk 5,000 crore while a huge revenue deficit will remain a big burden.

On the other hand, the bulk power tariff hike puts pressure on power distribution companies to submit their retail tariff hike proposal to the BERC to cover their own revenue gaps.

Public hearing was continuing till the filing of this report. There is a schedule from the BERC that it would continue the hearing process for the second day on Monday if the hearing is not possible to conclude Sunday.