Plan for power tariff hike pulls flak

Activists of Gonosanghati Andolon, a left-leaning party, stage a sit-in outside the office of Bangladesh Energy Regulatory Commission in the city to protest a planned hike in electricity prices. Photo: Star

Two state-run electricity companies -- Power Development Board (PDB) and West Zone Power Distribution Company (WZPDC) -- yesterday demanded the energy regulator raise electricity tariff by 15.50 percent and 8.59 percent respectively to help them cut growing losses.
In reply, a technical committee of Bangladesh Energy Regulatory Commission (BERC) recommended a 6.66 percent hike for PDB customers and 7.51 percent raise for WZPDC customers.
But a number of consumer rights groups, business chambers and left-leaning political parties rejected the proposal outright during a public hearing at the BERC office in the capital.
The final decision on the power price hike may come later this month.
There will be public hearings on proposals of Dhaka Power Distribution Company and Dhaka Electric Supply Company tomorrow and that of Rural Electrification Board on Thursday.   
The government has already given a nod to the energy ministry's move to raise the prices for bringing down subsidies.
In September 2012, the BERC last increased the retail power tariff -- the rate the distributors charge end-users -- by 15 percent to Tk 5.75 per unit amid opposition from consumers and rights groups.
This was the fifth hike in retail power tariff since the last Awami League government assumed office in 2009. Since February 2011, the commission has increased the retail tariff by 43.75 percent to Tk 5.75 a unit.
However, the last hike was much lower than the distributors' proposal as it was preceded by a 16.92 percent rise in bulk tariff -- the rate at which the distributing companies buy power from the PDB. The distributors had applied for another hike in November 2012 and a hearing also took place on their proposals.
But the regulator's plan to announce a retail tariff hike had to be postponed following intervention by the Prime Minister, who was opposed to raising the tariff, said BERC member Salim Mahmud.

The issue resurfaced earlier last month after the Power Division was able to convince the Prime Minister about the urgency of raising electricity prices.
PDB officials said their retail tariff now stands at Tk 6 a kilowatt-hour on average, while the distribution cost is Tk 6.93 a unit.
If the retail tariff is not hiked as demanded, the PDB will incur a loss of Tk 750 crore in the current fiscal year, as the state-run utility firm will face a fund shortage of Tk 339 crore.
But the PDB's proposal to hike tariff for irrigation pumps by nearly 60 percent to Tk 4 a unit came under heavy criticism.
Zonayed Saki, convener of a left-wing party -- Gonosanghati Andolon, said the move would raise the cost of irrigation and thus endanger food security.
But PDB Director Mizanur Rahman said the hike would not harm farmers as his company only serves about 5 percent farmers in the country. The move aims at bringing the tariff at par with the REB, which is already selling power at about Tk 4 to more than 90 percent farmers of the country, he said.    
Rights groups also criticised the PDB's proposal to raise power tariff by only two paisas for customers using more than 600 units while the rise is Tk 1.37 a unit for customers consuming less than 75 units.
PDB Chairman Abduhu Ruhullah said the tariff should be raised as the distributors are incurring huge losses stemming from subsidies.
Abul Kalam Azad, a director of WZPDC, said they would continue to face losses if the tariff is not hiked in line with their demand.
The company, which serves 21 districts in the southwest Bangladesh, will face a financial loss of Tk 99 crore in fiscal 2013-14 if the tariff is not hiked.
Shamsul Alam, energy adviser to Consumers Association of Bangladesh, a consumer rights group, said the Awami League-led government had promised to bring down power tariff in 2014.
"So, our target should be how we can lower the tariff, not the other way round."
Ruhin Hossain Prince, a member of Communist Party of Bangladesh, said the BERC should assess the impact of power tariff hike on the general people, who are already suffering due to high cost of living.
Hossain Ali, who represented Dhaka Chamber of Commerce and Industry, said the hike would hurt the businesses and the economy that bore the brunt of the recent political unrest.
The issue of government and quasi-government agencies and offices that consume power but do not pay bills also came up during the hearing, as non-payment of bills inflicted huge operational losses upon the PDB.
"The commission is not in favour of the system where one consumes electricity without paying bills and the public is forced to bear the bills," said BERC Chairman AR Khan.
The government had to spend nearly Tk 6,000 crore in power subsidies last year.
Meanwhile, hundreds of activists of Gonosanghati Andolon staged a sit-in in front of the BERC office in Karwan Bazar to protest the planned price hike of electricity. Similar protests also took place in many districts.