Bangladesh Energy Regulatory Commission (BERC) has rejected state-owned Bangladesh Power Development Board’s (BPDB) proposal to raise the bulk power tariff.
“The current charges will remain unchanged for the time being,” State Minister for Power, Energy and Mineral Resources Nasrul Hamid said on Thursday.
“BPDB’s proposal has not been accepted,” BERC chairman Abdul Jalil said while announcing the decision of the commission.
He, however, said if any party feels aggrieved, they can apply for re-consideration of the decision within 30 days.
He noted that some of the private companies which buy power from BPDB have not submitted their data of transactions.
“There was data ambiguity. That’s why we did not analyse the impact of any rise in bulk tariff on the consumers,” he told reporters during the virtual meeting.
The current socio-economic and power supply situation were taken into consideration when making the BERC decision, he noted.
The last BERC decision, in February 2020, shall prevail, said the BERC chairman adding that no further tariff will be introduced and the previous tariff will be continued.
He also said that BPDB has received a subsidy of Tk 17,000 crore from the government. So, it will be no problem for BPDB to adjust its cost.
The last public hearing on a proposal of the state-owned Bangladesh Power Development Board to raise bulk power tariff was held on May 18.
BERC extended the time for stakeholders to submit relevant documents for ending the hearing procedures.
From that additional time, BERC counted 90 days and set October 13 to announce its decision.
The energy regulator's decision to reject the proposal to raise bulk power tariff came at a time when the country has been experiencing a nagging power crisis and consumers are suffering 5-6 hours of load shedding daily.
The Power Division has been under tremendous pressure from the Finance Ministry to raise power tariffs.
BPDB has been incurring a huge financial loss due to its purchase of electricity from private power plants at a much higher rate and sell it to the consumers at a lower rate.
Against this backdrop, BPDB placed a proposal to raise bulk power tariffs by 65.57 percent at the public hearing while a technical evaluation committee (TEC) of BERC recommended a 57.83 percent hike.
The 5-member commission makes the final decision following a public hearing after listening to arguments and counter arguments from the stakeholders on any proposal.
At the public hearing on May 18, consumer rights groups, including representatives from different business bodies, vehemently opposed any major rise in power tariff right now, as people are already struggling with high inflation caused by high commodity prices.
They termed the proposal illogical and said BPDB can offset its revenue deficit through addressing irregularities, corruption and unethical practice in buying electricity from inefficient private power plants at higher rates.
Placing the proposal, BPDB officials had said the organisation will require revenue of Tk 74,189 crore to generate 88,993 million kilowatt hours (units) of electricity to supply to the power distribution companies.
"But if the BPDB sells its electricity at the existing rate of Tk 5.17 per unit, it will have to face a deficit of Tk 30,251 crore in revenue in the calendar year 2022. So, BPDB needs to raise the power tariff by 65.57 percent to Tk 8.56 per unit from Tk 5.17," said a BPDB top official at the hearing, adding that this has been calculated without the government's subsidy.
The Power Division suspended operation of its diesel-fired power plants and also import of liquefied natural gas (LNG) following escalation of fuel prices in the international market as fallout of the Russia-Ukraine war.
As a result, though the country's installed power generation capacity is about 25,50 MW, it now generates about 12,000 MW against a demand for around 14,000 MW and resorts to a load shedding of about 2,000 MW.
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