a year ago

Power tariff is going up

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Ever since the bulk ---technically called weighted average bulk--- power tariff was raised by 19.92 per cent to Tk 6.20 from Tk 5.17 per unit in November last, a hike in retail power tariff at the consumer level was on the card. With the bulk tariff becoming effective from December last, the power distribution companies and the Power Grid Company of Bangladesh (PGCB) did not want to wait long for raising the retail tariff and transmission charge as soon as possible. By this time the passage of the Bangladesh Energy Regulatory Commission (amendment) Ordinance, 2022 in parliament in January last has ruled out the need for mandatory public hearing before adjustment of power tariff. Then there seems to be a government policy shift in favour of withdrawal of subsidy from power. It is against this backdrop, a public hearing was held notwithstanding the fact that the government could avoid this if it so wanted.

By holding the public hearing the Bangladesh Energy Regulatory Commission (BERC) can still consider it has some relevance by at least allowing the platform for the public and rights groups to present their grievances or argument against arbitrary power hikes. When all the power distribution companies bargained for tariff increase well over 20 per cent at the consumer level, the BERC technical evaluation committee suggested a hike of 15.43 per cent. If this happens, per kilowatt hour or unit will be costlier by Tk 1.10 from Tk 7.13 to Tk 8.23. The technical committee also recommended a13.19 per cent increase in the wheeling or transmission charge. As an intermediary the BERC is going to make its decision, as its chairman stated, within a month unlike in the past within the 90 days it gets for doing so.

Now the question is if a raise in power tariff by even the BERC technical committee-recommended rate was inevitable or avoidable. The Consumer Association of Bangladesh (CAB) and the president of Bangladesh Chamber of Industries (BCI) convincingly argue that system loss, inefficiency and unnecessary expenditures on several heads could avoid this hike at a time when people, particularly the low-income groups, are economically bleeding from market volatility and in the absence of opportunities for employment and augmentation of income. Power theft and illegal connection could not be tackled. System loss is virtually the other name of illegally provided power connections. To the enquiry by the CAB about the number of bureaucrats on the boards of different power companies, there was complete silence. Also the amount of honorarium paid to these bureaucrats for attending board meetings could not be disclosed. Why?

Evidently, there are too many holes to be plugged. But the Power Development Board is neither minding its own business nor following the government's austerity measures. Stock-taking could improve this particular utility service. Again, fuel oil price is dropping in the international market. If energy price is adjusted and, even better, local gas supply gets increased, the tariff rate needed no such hike. The fallout of this power hike may be more telling by increasing production costs of goods and commodities and triggering another round of their price hike. What will be the supply situation of power in the summer is another concern. It seems subsidy rather than the costlier tariff at the retail level would have been a better option.    

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