BERC says no to BPDB’s proposal to hike electricity price

For the first time in recent years, the Bangladesh Energy Regulatory Commission (BERC) on Thursday rejected the Power Development Board's proposal to raise the bulk electricity price.

The BPDB had proposed hiking the bulk electricity tariff by 66% because of inadequacy of data and ambiguities of information on electricity production and purchases from public and private producers, BERC Chairman Md Abdul Jalil said at a virtual briefing on Thursday.

Although the technical committee of the BERC recommended increasing the price by 57% to Tk8.16 kilowatt-hour (kWt) from Tk5.17kWt at a public hearing on 18 May this year on condition that no subsidy is provided to the BPDB, the commission was prepared to hike the tariff by 15%-17% as the Finance Division assured of Tk17,000 crore in subsidy for the BPDB for the current fiscal year, according to sources.

But the commission walked back as the government had instructed it not to increase the electricity price right now as an unprecedented power outage has hit people's daily life that was already reeling under the impact of record inflation, hikes in prices of gas and fuel oils, said sources at the BERC and the Power Division.

BERC Chairman Md Abdul Jalil, however, did not talk about the administrative instruction.

Instead, he said the bulk electricity tariff remained unchanged as the BPDB had failed to provide necessary data in favour of its tariff adjustment proposal.

"We have found a 'paralysis of analysis' in the BPDB's power tariff adjustment proposal. They could not provide us with a clear way out to avoid the inevitable effect of the bulk tariff adjustment at distribution and consumer levels.

"Therefore, we have kept the existing tariff unchanged. However, they can apply before the BERC within 30 working days to reconsider the order," he said.

BERC members Maqbul-e- Elahi Chowdhury, Balur Rahman and Mohammad Abu Farooq, among others, were present at the virtual briefing.

At present, the bulk tariff of electricity is Tk5.17kWt – the rate at which the BPDB sells power to distribution companies. But the board purchases power from public and private producers at Tk3.46 kWt-Tk43.42kWt.

Due to this gap in the buying and selling prices, the board stares at facing a deficit of Tk27,000 crore in the current fiscal year.

In order to meet the deficit, the BPDB on 12 January submitted a proposal to hike the bulk electricity tariff by 66%.

On 18 May, the energy regulator held the last public hearing on the BPDB's proposal.

As per the BERC Act, the commission is supposed to announce its order within 90 working days of any public hearing held once and Thursday was the last day to announce the order.

In the last 12 years, the bulk electricity price has been hiked nine times. In this period, bulk price has increased by 118% and retail price by 90%.

The last bulk electricity price hike was announced on 27 February 2020, when the energy regulator raised the price by 8% to Tk5.17kWt from Tk4.77kWt.