Protests precede fresh power-price hike move

Public hearing on proposed tariff rises begins today

| Updated: October 24, 2017 23:04:24

Protests precede fresh power-price hike move

A weeklong public hearing on government proposals for hiking power tariffs afresh starts today (Monday) with a prelude of protests from businesspeople and cross-sections of consumers.


Bangladesh Energy Regulatory Commission (BERC) has arranged the hearing to be held at the TCB (Trading Corporation of Bangladesh) auditorium at Karwanbazar in the city.


The hearing gets off with deliberations on a state-run Bangladesh Power Development Board (BPDB)-proposed raise in bulk electricity tariffs on the very first day.


The board has proposed a hike by 14.78 per on the bulk electricity tariffs, citing high prices of fuels supplied by Bangladesh Petroleum Corporation (BPC).


However, the Consumers Association of Bangladesh (CAB) appealed to the BERC for reducing bulk electricity tariffs by Tk 1.32 per unit (1 kilowatt-hour) in two years in four phases, CAB energy adviser Prof M Shamsul Alam said.


The commission will hold the hearing on the proposals of six power- distribution utilities for raising retail prices of electricity by 3.0-24 per cent to what they said reduce their losses.


Hearings will take place on BPDB's plea for retail price hike by 3.0 per cent on September 26, Rural Electrification Board's (REB) proposal for 10.75 per cent hike on September 27, Dhaka Power Distribution Company (DPDC) proposal for 6.24 per cent hike on September 28, Dhaka Electric Supply Company's (DESCO)proposal for 6.34 per cent hike on October 2, West-Zone Power Distribution Company's (WZPDC) proposal for 10.36 per cent hike on October 03 and North-West Zone Power Distribution Company's (NWPZC) proposal for 24 per cent hike on October 04.


Sources said the commission already raised the average retail price of electricity by 69.25 per cent, up from Tk 3.76 per unit to Tk 6.33, in eight phases, between March 2010 and September 2015, citing higher prices of oils and growing dependence on the fuels.


The BERC also increased the bulk price of electricity by 106.75 per cent, up from Tk 2.37 per unit to Tk 4.90 per unit, in seven phases, between March 2011 and September 2015.


Due to the repeated raise in electricity tariffs, coupled with lower oil prices on the international market, the government subsidy in power sector fell significantly over the past several years.


Subsidy in power sector was slashed by 68.87 per cent to Tk 27.94 billion in fiscal year (FY) 2015-16, which was Tk 89.78 billion in the previous FY 2014-15, according statistics from the state-run BPDB.


Subsidy on power was Tk 61 billion in FY 2013-14, Tk 55 billion in FY 2012-13, Tk 63.57 billion in FY 2011-12 and Tk 40 billion in FY 2010-11, the statistics revealed.


The average electricity-generation cost fell by 11. 48 per cent to Tk 5.55 per unit (1 kilowatt-hour) in FY 2015-16 compared to Tk 6.27 per unit FY 2014-15 due to sharp fall in oil prices on the global market, they said.


The BERC last raised power tariffs on average by 2.93 per cent for retail consumers with effective from September 1, 2015.


In the run-up to the hearings, Dhaka Chamber of Commerce and Industry (DCCI) demanded Sunday of the government to revoke the proposed electricity tariff hike.


It also called upon the government to constitute an 'Energy Monitoring Committee' and take a long-term energy policy/roadmap.


DCCI believes that ensuring supply of low-rated, reliable and affordable electricity supply will stimulate private-sector-investment-led economic growth and turn Bangladesh into a middle-income country by 2021.


The proposed power-price hike at consumers' level by distribution companies will increase the retail electricity price maximum by Tk 10 from Tk. 9.16 at small and medium enterprises (SME), Tk 12.98 from Tk 11.98 for commercial users and from Tk 9.52 to Tk 10.32 for large industry and Tk 6.10 from Tk 5.63 for average domestic users.


Price at industrial and commercial consumers' levels is around 180 per cent higher than the generation cost, which does not justify proposed tariff hike at consumers' level.


"Due to tariff hike almost all power-intensive manufacturing industries will be adversely affected. Especially SMEs, steel re-rolling mills, textile sector will face average 8 to 10 percent production-cost hike," said a statement issued by DCCI on the day.


"Proposed electricity tariff hike will slow down growth in economy," it predicts. The trade body said in the private sector furnace oil/heavy fuel oil (HFO)-based power plants can import HFO at a rate of relatively 90 percent lower over import of BPC based on current import trend.


It (DCCI) urged the government to allow private sector more to import HFO for ensuring minimum generation cost.


The chamber also stressed the need for strengthening operational efficiency and management of public-sector power plants, engaging private sector in power transmission and distribution operations to minimise the distribution loss without putting tariff rise-led pressure at consumers' level.


Uninterrupted electricity supply is the key to consistent economic growth in industrial, agricultural and service sectors in Bangladesh, said the DCCI.


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