BERC to Decide On Review Appeal on Bulk Power Tariff Today

Bangladesh Energy Regulatory Commission (BERC) will announce its decision on the review appeal of the state-owned Bangladesh Power Development Board (BPDB) to raise bulk power tariff on Monday, an official statement said on Sunday.

But consumer rights activists are against any further raise.

The BPDB filed the review appeal to the BERC on November 14 within 30 working days after its proposal was rejected by the regulator on October 13, reports UNB.

Before submitting the proposal, the BPDB received a nod from the government’s highest policy level, the media release from BERC said.

State Minister for Power, Energy and Mineral Resources Nasrul Hamid also approved the review appeal.  

BERC on October 13 rejected the proposal of the BPDB to raise bulk power tariff, saying that the aggrieved party can submit an appealing proposal to review the regulator’s decision within 30 working days.

However, the BERC will announce the decision without any further public hearing on the issue.

Consumers Association of Bangladesh (CAB) Vice President ASM Shamsul Alam termed BERC’s decision without any public hearing as an arbitrary act and a violation of the BERC Act.

“When people are fed-up with load shedding and excessive price of essentials the BERC’s such decision will be a big blow for the public”, he told UNB.

Power Division officials said that the government has been under tremendous pressure to raise power tariffs to reduce the subsidy in the power sector as per the condition of the International Monetary Fund (IMF), which promised to provide $4.5 billion in loans to Bangladesh as part of crisis management support.

Earlier when delivering a decision by rejecting the BPDB proposal on Oct 13, BERC chairman Abdul Jalil said that some of the private companies, which buy power from BPDB have not submitted their data of transactions.

“There was data ambiguity. That’s why we did not analyse the impact of any rise in bulk tariff on the consumers,” he told reporters.

The current socio-economic and power supply situation was taken into consideration when making the BERC decision, he noted.

As a result, the electricity tariff remains unchanged in accordance with the earlier tariff announced in February 2020.

The last public hearing on a proposal of the state-owned BPDB to raise bulk power tariffs was held on May 18.

The BPDB placed a proposal to raise bulk power tariffs by 65.57 per cent at the public hearing while a technical evaluation committee of BERC recommended a 57.83 per cent hike.

The BPDB in its latest review appeal proposal mentioned that its actual cost of supply is Tk 8.96 per unit instead of the previously calculated tariff of Tk 8.16 per unit.

Placing the proposal, BPDB officials had said the organisation will require Tk 74,189 crore in revenue to generate 88,993 million kilowatt hours (units) of electricity to supply to the power distribution companies.

Meanwhile, now distribution companies are preparing to submit their respective proposals to raise retail power tariffs too, official sources said.

Nasrul Hamid also said that the distribution entities are preparing their proposals to submit to the energy regulator seeking a substantial hike in the electricity tariff at the retail level.

“Power distribution companies are now working to prepare their proposals…They are calculating the possible impact on any hike in the bulk tariff,” he told UNB.

The BPDB officials hope that BERC will raise the bulk tariff by at least 20 per cent,” said a top official of the BPDB, adding that, considering a possible 20 per cent hike, the BPDB is seeking at least a 12 per cent hike in retail tariff of electricity.  

The retail power tariff was last raised in March 2020 by BERC after holding a public hearing.

Through an announcement, the BERC had raised the power tariff on a weighted average of 5.3 per cent at retail and 8.4 per cent at wholesale levels with effect from March 1, 2020.

As per that decision, the retail power tariff was increased from Tk 6.77 to Tk 7.13 per unit (each kilowatt-hour) and Tk 4.77 to Tk 5.17 at the bulk level.