Bangladesh braces for power price hike in winter

Dhaka Electricity Supply Co Ltd (DESCO) and West Zone Power Distribution Co Ltd have sought the

Bangladesh Energy Regulatory Commission (BERC) approval to their proposals for a hike in retail power tariffs. In the proposals,

up to a 21.94 per cent tariff hike in the city areas and around an 18.99 per cent increase in tariffs for 21 districts in the south-western

region have been mooted.

If the DESCO and West Zone Power proposals were cleared, the average retail power tariff per unit (Kilo Watt Hour) would stand

at Tk. 5.28 as against the present Tk. 4.33 in the city and the tariff for south-western districts would increase from the present Tk.

4.53 to Tk. 4.77.

The proposals were discussed thoroughly at an open meeting of the commission chairman, members and stakeholders, held at the

BERC office here on Sunday.

The DESCO had submitted its proposal to BERC on June 19, 2011 for a 13.16 per cent retail tariff hike while the West Zone Power

proposal, submitted on June 20, sought a 13.11 percent hike.

Later, in August this year, the DESCO revised its proposal and sought a 21.95 per cent hike in tariff. On August 2, West Zone

Power sought an upward revision of its tariff hike proposal at 18.99 per cent.

Incidentally, on February 8, 2011, the BERC had for the last time raised tariffs for bulk and retail electricity by 11 and 5 per cent,

respectively, with retrospective from February 1.

BERC chairman Syed Yusuf Hossain said end-users, ranging from domestic consumers to industrial entrepreneurs, would be

saddled with an extra burden if the two proposal wee cleared.

The open discussion on the proposals was organised by the commission at its Karwan Bazaar office in the city.

Hossain said common people could not cope with the additional inflationary pressure as the prices of essential commodities had

already gone beyond their reach due to an increase in energy and fuel prices in recent months.

He urged DESCO and West Zone Power to be guided by their own judgments before proceeding to seek an increase in retail power

tariffs, especially at a time when the country’s economy is facing a sharp fall in the balance of payments and a liquidity crunch.

“Wide inflation has already kept the government under pressure. A fresh hike in power tariffs would only worsen the situation. As it

is, we are being condemned by people for allowing your tariff hike proposals to be discussed. Is it not embarrassing for us?,”

Hossain said while he was delivering a speech at the discussion.

When DESCO and West Zone Power officials present at the meeting cited the rising cost of distribution as a reason for seeking a

fresh tariff hike, Hossain advised them to revise their proposal downwards and take other effective measures.

The other measures included reducing system loss, preventing illegal tapping of power, improving distribution services and going

for viable expansion in case of new connections.

Time has come to categorise the domestic consumers, Hossain said adding, since moneyed people enjoy luxurious living in

air-conditioned residents at the same tariff rate the low-income group people pay for their power consumption.

Meanwhile, the commission has announced that it would hear the DESCO proposal on October 20 and take up the West Zone

Power proposal on October 24.

During the February 2011 tariff hike announcement, the commission had said that the hike would not be applicable to domestic

consumption of electricity between 1-100 units monthly, irrigation and non-residential (religious, social and educational institutions)

connections.

The commission chairman had then said the tariff increase for bulk power (11 per cent) would be implemented in two phases on

July 31 and from August.

He had also said the commission would set a ceiling on the tariff hike, at five per cent over the previous per unit rate of Tk. 4

(prevailing before February 2011), for retail consumers.

Incidentally, last month, BERC rejected a tariff-hike proposal of the Rural Electrification Board. Similar proposals moved by Dhaka

Power Distribution Co Ltd and Power Development Board are under the consideration of the commission.