Electricity Prices Rising Again


At least three distribution utilities have taken a move to increase the price of electricity for the retail consumers by up to 20 per cent to make up their losses, officials said.

On Tuesday, state minister for power and energy Nasrul Hamid Bipu told reporters that electricity price would be increased in a month following energy commission formalities. Bangladesh’s all the five power distribution utilities are state owned.

On Monday, Bangladesh Energy Regulatory Commission received separate proposals for raising the power price from the utilities, BERC member Md Delwar Hossain told New Age.

He said that the BERC received incomplete proposals from the three utilities: Power Development Board, Dhaka Power Distribution Company and the West Zone Power Distribution Company.

BERC technical committee would ask the utilities to provide more information to complete their proposals, Delwar said replying to a question.

Two remaining utilities, Dhaka Electric Supply Company and the Rural Electricity Board are expected to send their proposals to increase price to the BERC later, officials indicated.

The move to raise the power price has been taken shortly after a month since the Awami League-led coalition took power for the second consecutive term on January 12.

From March 2010 to September 2012, the immediate past AL-led government increased retail power price six times.
In money terms the average power price went up by about 60 per cent, from Tk 3.76 a kilowatt-hour (unit) to Tk 6 a unit in the previous tenure of the AL-led government.

The BERC increased the bulk price of electricity by 98.31 per cent, from Tk 2.37 a unit to Tk 4.70 a unit, in six phases between February 2011 and September 2012 saying that the average generation cost had doubled by end 2013 due to government decision to buy power from private sector suppliers.

The unprecedented electricity price hike is attributed to two factors: private sector suppliers charging rentals of their plants whether or not the government buys power from them and the use of costly fuel oils for generation. And the burden is shifted to the consumers.

The PDB proposal sought retail power price increase by 15.5 per cent to cover up its an annual loss of Tk 516 crore, said a PDB official.

The DPDC proposed to increase price by 20 per cent to make up its annual loss of Tk 64 crore. The WZPDC wants to increase price by 8.59 per cent to cover its annual loss worth Tk 95 crore.

On January 23, 2013, prime minister Sheikh Hasina requested the BERC not to increase electricity price for a year, saying her government would subsidize the power distribution companies.

In April 2013, the BERC estimated that the five power distribution utilities would need Tk 716 crore in subsidies in fiscal 2012-13.

But the government did not provide the promised subsidies to the power utilities.

Officials of the power distribution utilities said that the cumulative losses were estimated taking into account the losses they incurred since September 2012.

On September 20, 2012, BERC increased average electricity retail price by 15 per cent on an interim basis in the backdrop of the average bulk price increase by 16.92 per cent.

Article Source: New Age BD

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