New Age, 27 July 2012
The government persistently keeps pressuring the Bangladesh Energy Regulatory Commission to increase the bulk power price by at least 60 per cent at one go to avoid any further hike at the fag end of its five-year tenure, said officials.
The government fears mass discontent due to further hike of the price of power in 2013, which might have an adverse impact on its prospects in the next general elections, said a BERC official.
BERC planned to raise the bulk price of electricity by around 30 per cent in response to a revised proposal submitted by the Power Development Board for enhancing the price by around 35 per cent, said the official.
He said they had to defer a press briefing, which was scheduled on Thursday afternoon, on increasing both the bulk and retail prices of electricity as a technical committee was ‘busy’ accommodating the government’s adjuration to raise the prices once only.
BERC’s chairman Syed Yusuf Hossain told New Age, ‘We thought that we would complete the calculation for formulating the new price chart in the scheduled time, but we need a few more clarifications on the PDB’s revised proposal.’
Apart from this, the BERC was thinking of increasing the number of slabs (each slab will have different prices of power) of electric bills for domestic consumers in order to rationalise billing, he said.
When asked about the government’s adjuration not to raise electricity prices in 2013, Yusuf said that they were aware of the issue.
‘We are working out the new price chart after considering all these issues, and it needs time,’ he said.
The BERC will announce the new electricity prices chart ‘as soon as possible’, the chairman added.
The BERC will raise the retail prices of electricity along with the bulk price by issuing an interim order as it is yet to hold a public hearing on the proposals of the power distribution agencies so that they can avoid losses.
He said that the BERC would restructure the slabs of electricity bills for domestic consumers, dividing them into six categories instead of three to four now under different power distribution agencies.
On June 6, the PDB proposed that the BERC allow it to increase the bulk price of electricity to Tk 6.03 a kilowatt-hour (unit) from Tk 4.02, and also give it Tk 3,684 crore in subsidy with effect from July 1.
Following the PDB’s proposal, the BERC asked the distribution agencies to submit their proposals for fixing retail rates of electricity in accordance with the 50 per cent hike in the bulk rate so that they can avoid losses.
The distribution agencies sought 50-57 per cent increase of the retail prices of power.
BERC’s technical committee, during the public hearing on the proposal on July 15, suggested that they raise the bulk price by 21.89 per cent with Tk 3,700 crore in subsidy.
After the public hearing, BERC asked PDB to revise its proposal by decreasing the power generation target of fuel-oil powered plants in fiscal year 2012-13 to bring about a balance between how much subsidy needs to be provided and how much the consumers can pay.
The PDB, in its revised proposal, cut down the electricity generation of fuel-oil powered plants to 47 per cent on average from the initially planned 80 per cent to reduce production cost.
According to the revised proposal, the cost of electricity generation will be decreased to Tk 6.42 a kilowatt-hour (unit) from Tk 6.87.
But, in that case, BERC will have to raise the electricity price further in 2013 to adjust the increasing generation cost with the sales price as PDB will have to increase power generation by the fuel-oil powered plants to meet the growing demand for electricity in the coming year, said a BERC official.
The BERC, from February 2011 to March 2012, has already increased the bulk power prices by 69.6 per cent on an average — from Tk 2.37 a unit to Tk 2.63 with effect from February, then to Tk 2.80 from August, then to Tk 3.27 from December 2011 and then to Tk 3.74 from February 2012, and then again to Tk 4.02 a unit from March.
After increasing the bulk power prices, the BERC has also increased retail prices by 33 per cent on an average — from Tk 4.0 a unit to Tk 5.32 in 14 months.
The average cost of electricity generation shot up to Tk 6.42 a unit from Tk 2.63 after fuel-oil powered plants of around 2,000 megawatt capacity started electricity generation from the end of 2010.
Bangladesh Economy 
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