Stakeholders oppose move to raise power tariff

Stakeholders of the power sector, including consumers, have opposed the government move to increase bulk power tariff for distributors, as it will eventually affect the general consumers. They raised their voice against the power tariff hike proposed by the Bangladesh Power Development Board (BPDB) at a hearing organised by the Bangladesh Energy Regulatory Commission (BERC) in the capital yesterday (Monday). It was the first day of the seven-day public hearing solely focusing on the bulk rates—the prices distribution companies pay to the BPDB.

In February this year, the BPDB submitted a proposal to increase bulk power tariff by 14.78 per cent to Tk. 5.59 a kilowatt-hour unit from Tk. 4.87 now. The state agency has argued that it has to face a tariff deficit of Tk. 0.72 per unit because of the gap between the bulk supply tariff and the weighted average bulk tariff.

According to the BPDB, the tariff increase is needed because of the rise in the use of furnace oil and diesel in generating power, buying power from the private sector, increase in the cost of energy, interest paid against government loans and supplying power to the rural Palli Bidyut Samiti at a comparatively lower price.

But the proposal faced strong opposition from industries, politicians and consumer rights groups.

Lawmaker Fazle Hossain Badsha, general secretary of the Workers' Party of Bangladesh, said: “I don’t think there is any scope to increase electricity tariff at the moment because we are not in a favourable condition

due to the recent floods and the influx of over four lakh Rohingya refugees from Myanmar. So, the ministry should withdraw the proposal.”  The politician said lawmakers normally stay away from such topics. As a result, this issue is not discussed in Parliament. “This amounts to injustice to the people,” he added.

Junaid Saki, chief coordinator of Gono Shanghati Andolon, said the proposal to raise power tariff is illogical. "A power price hike also increases price of goods, education and health. It comes as a burden for the low income groups. The power price increases again and again, but the earnings of the low-income groups do not go up proportionately,” he added.

Prof. Shamsur Rahman, energy adviser of the Consumers' Association of Bangladesh, criticised attempts to produce more electricity from costly diesel-fired plants and the expansion of rental and quick rental plants.

Low-cost fuel for the Meghnaghat power plant, setting up gas-fired plants instead of rental and quick rental plants, and rationalisation of capacity payment to extended private power plants could help the government save Tk. 6,342 crore, he noted.

Prof. Rahman said these measures would bring down the power price to Tk. 3.58 a unit from Tk. 4.90 within the next two years.

The energy expert also said it is the responsibility of the BERC to fix and readjust the prices of liquid fuel and electricity. But the energy and mineral resources ministry fixes the price of liquid fuel, he added.

“So, adjusting electricity prices in keeping with the fixed liquid fuel price is unfair and illogical,” he said.

Khondkar Saleque, a Bangladeshi energy expert based in Australia, said that it was promised that the electricity price would go down after 2014. Now it is 2017 and the tariff is going up again. He suggested that the BPDB pay heed to combined cycle power plants and repowering of electricity plants to produce more power with less energy.

The BERC's technical committee suggested raising the bulk tariff by Tk. 0.57 a unit considering the net revenue requirement.   

According to a paper distributed at the hearing, the technical committee said the government has waived all import tax and VAT on furnace oil for private and public power plants. Even if the BPDB imports furnace oil through commercial importers and generates electricity from the fuel, the power tariff would go down significantly, it said.

The BNP yesterday accused the government of trying to illogically increase power tariffs again. It said the government should desist from such a move.

BNP senior joint secretary general, Ruhul Kabir Rizvi, said: "I, on behalf of the BNP, strongly condemn and protest the illogical decision of hiking power tariffs again. We call upon the government to retreat from the move."

The hearings will continue till October 4 and focus on retail tariff proposals. The BERC will have to declare its decision within 90 working days of the public hearing. BERC chairman Monowar Islam chaired the hearing.

 

Stakeholders oppose move to raise power tariff

Stakeholders of the power sector, including consumers, have opposed the government move to increase bulk power tariff for distributors, as it will eventually affect the general consumers. They raised their voice against the power tariff hike proposed by the Bangladesh Power Development Board (BPDB) at a hearing organised by the Bangladesh Energy Regulatory Commission (BERC) in the capital yesterday (Monday). It was the first day of the seven-day public hearing solely focusing on the bulk ratesthe prices distribution companies pay to the BPDB. In February this year, the BPDB submitted a proposal to increase bulk power tariff by 14.78 per cent to Tk. 5.59 a kilowatt-hour unit from Tk. 4.87 now. The state agency has argued that it has to face a tariff deficit of Tk. 0.72 per unit because of the gap between the bulk supply tariff and the weighted average bulk tariff. According to the BPDB, the tariff increase is needed because of the rise in the use of furnace oil and diesel in generating power, buying power from the private sector, increase in the cost of energy, interest paid against government loans and supplying power to the rural Palli Bidyut Samiti at a comparatively lower price. But the proposal faced strong opposition from industries, politicians and consumer rights groups. Lawmaker Fazle Hossain Badsha, general secretary of the Workers Party of Bangladesh, said: I dont think there is any scope to increase electricity tariff at the moment because we are not in a favourable condition due to the recent floods and the influx of over four lakh Rohingya refugees from Myanmar. So, the ministry should withdraw the proposal. The politician said lawmakers normally stay away from such topics. As a result, this issue is not discussed in Parliament. This amounts to injustice to the people, he added. Junaid Saki, chief coordinator of Gono Shanghati Andolon, said the proposal to raise power tariff is illogical. A power price hike also increases price of goods, education and health. It comes as a burden for the low income groups. The power price increases again and again, but the earnings of the low-income groups do not go up proportionately, he added. Prof. Shamsur Rahman, energy adviser of the Consumers Association of Bangladesh, criticised attempts to produce more electricity from costly diesel-fired plants and the expansion of rental and quick rental plants. Low-cost fuel for the Meghnaghat power plant, setting up gas-fired plants instead of rental and quick rental plants, and rationalisation of capacity payment to extended private power plants could help the government save Tk. 6,342 crore, he noted. Prof. Rahman said these measures would bring down the power price to Tk. 3.58 a unit from Tk. 4.90 within the next two years. The energy expert also said it is the responsibility of the BERC to fix and readjust the prices of liquid fuel and electricity. But the energy and mineral resources ministry fixes the price of liquid fuel, he added. So, adjusting electricity prices in keeping with the fixed liquid fuel price is unfair and illogical, he said. Khondkar Saleque, a Bangladeshi energy expert based in Australia, said that it was promised that the electricity price would go down after 2014. Now it is 2017 and the tariff is going up again. He suggested that the BPDB pay heed to combined cycle power plants and repowering of electricity plants to produce more power with less energy. The BERCs technical committee suggested raising the bulk tariff by Tk. 0.57 a unit considering the net revenue requirement. According to a paper distributed at the hearing, the technical committee said the government has waived all import tax and VAT on furnace oil for private and public power plants. Even if the BPDB imports furnace oil through commercial importers and generates electricity from the fuel, the power tariff would go down significantly, it said. The BNP yesterday accused the government of trying to illogically increase power tariffs again. It said the government should desist from such a move. BNP senior joint secretary general, Ruhul Kabir Rizvi, said: I, on behalf of the BNP, strongly condemn and protest the illogical decision of hiking power tariffs again. We call upon the government to retreat from the move. The hearings will continue till October 4 and focus on retail tariff proposals. The BERC will have to declare its decision within 90 working days of the public hearing. BERC chairman Monowar Islam chaired the hearing.