Power Tariff Hike: BPDB proposal faces opposition

Consumer rights groups, industries and politicians yesterday opposed the government's move to hike bulk power tariff for distributors as it would eventually be passed on to end-consumers.  

They raised their voice against the price hike proposal from Bangladesh Power Development Board (BPDB) at a hearing organised by Bangladesh Energy Regulatory Commission (Berc) in the capital.

The seven-day public hearing opened yesterday, with the first day's focus solely being on bulk rates -- the prices distribution companies pay to the BPDB.

In February this year, the state agency submitted a proposal to increase bulk power tariff by 14.78 percent to Tk 5.59 a kilowatt-hour unit from the current rate of Tk 4.87. 

The BPDB argued that it has to face a tariff deficit of Tk 0.72 per kWh unit because of the gap between the bulk supply tariff and the weighted average bulk tariff.

According to the BPDB, a hike in tariff was needed due to increased use of furnace oil and diesel in power generation, to buy power from the private sector, rise in energy prices, interest paid against government loans and supplying power to rural Palli Bidyut Samity at comparatively lower prices.

But the proposal faced strong opposition from different quarters.

Lawmaker Fazle Hossain Badsha, general secretary of Workers Party of Bangladesh, said: “I don't think that there is any scope for increasing power tariff at this moment, because we are not in a favourable condition due to recent floods and the influx of over 4 lakh Rohingyas from Myanmar.”

He observed that the ministry should withdraw the proposal. 

The politician said lawmakers in parliament normally keep away from this type of topic. As a result, this issue is not discussed in the House. “This amounts to injustice to the people.”

Junaid Saki, chief coordinator of Ganasanghati Andolan, said the proposal to raise power tariff was illogical.

“A power price hike is not merely a power price hike because it increases prices of goods, education and health services. It also comes as a burden on low-income people.”

The power price increases time and again, but the earnings of the low-income people don't grow proportionately, he added.

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

Move to use least-cost fuel for Meghnaghat power plant, to set up gas-fired plants instead of rental and quick rental units and rationalise capacity payment to private power plants running on extended tenures could help the government save Tk 6,342 crore, he said.

According to the expert, these measures would bring down power price to Tk 3.58 per kWh unit from Tk 4.90 within next two years.

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 power tariffs based on fuel price fixed by the ministry is unfair and illogical,” said Shamsur.

Khondkar Saleque, a Bangladeshi energy expert based in Australia, said it was noted earlier that electricity price would go down after 2014. Now it is 2017 and a proposal has been put up to increase the tariff again.

He suggested the BPDB pay attention to combined cycle power plants as well as repowering of electricity plants to produce more power with less energy.

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

In a paper distributed at the hearing yesterday, the committee said the government has waived all tax and VAT on import of furnace oil for all private and public power plants.

The power tariff would go down significantly even if the BPDB imports furnace oil through commercial importers and generate electricity from the fuel, it said.