BERC public hearing on power tariff hike: Stakeholders, political parties oppose govt move
PDB seeks 50% hike in tariff, regulator’s technical team recommend 21.89%
Dhaka, July 16 (UNB) - Participating in a public hearing of the energy regulator on Monday, various stakeholders in the power sector as well as the representatives of political parties vigorously opposed the government’s move for further increase of power tariff.
“Please, arrange public hearing in the rural areas to listen to the voice of the common people whether they want further power tariff hike or not. Exchange views with local Members of Parliament (MPs) to hear the views of the people’s representatives,” Ruhin Hossain Prince, a central leader of Communist Party of Bangladesh, told the 3-member Bangladesh Energy Regulatory Commission (BERC).
This is the first time representatives from different political parties, particularly the left parties, participated in the public hearing of the BERC. However, no representative from the main opposition BNP took part in the hearing.
The watchdog body organised the hearing at its office to listen to the views of different stakeholders in the power sector including consumers’ association, business and chamber bodies, and distribution companies on the proposal of the state-owned Power Development Board (PDB) for raising power tariff by 50 percent or Tk 2.01 per unit at the bulk level.
BERC’s technical team placed an analysis on the PDB’s proposal and recommended to raise the bulk tariff by 21.89 percent or Tk 0.88 per unit.
The three-member Commission headed by Syed Yusuf Hossain will give the final order on the PDB’s proposal.
Last month, the PDB placed the proposal to the BERC pleading to raise the power tariff to Tk 6.03 per kilowatt hour (each unit) from the existing Tk 4.02 per unit with effect from July 1.
This is the fourth time the PDB moved the energy regulators with their bulk power tariff hike proposal. Responding to the government body’s appeal, electricity prices were increased thrice in the last four months as part of the efforts to reduce subsidies in the power sector.
Power tariff for bulk clients was last increased in March by 7.49 percent to Tk 4.02 per unit from Tk 3.74 and for retail users by 6.25 percent to Tk 5.32 per unit from Tk 5.02.
Following the PDB’s pleading, different distribution companies also placed the proposal to the BERC to raise power tariff at the retail level, which will directly affect the common consumers if granted by the energy watchdog body.
In the public hearing, PDB chairman ASM Alamgir Kabir said they have been incurring huge loss for operating costly liquid-fuel based rental and quick rental power plants.
“If the power tariff is not increased at the bulk level, the PDB will have to face financial loss of Tk 12,500 crore in 2012-13 fiscal. If the fuel price goes up further, the loss will be greater,” he told the BERC.
Rural Electrification Board (REB) chairman Brig Gen Moin Uddin said that the palli bidyut samities (rural electricity cooperatives) are incurring huge loss of Tk 50 crore per month because of their buying electricity at higher rate and selling to consumers at lower rate.
He said REB does not have any objection in raising the bulk tariff hike if the tariff at retail level is also increased to offset their financial losses.
Responding to the PDB chairman’s argument, Ruhin Hossain Prince said the installation of quick rental and rental power plants was a “wrong strategy” of the government to resolve power crisis.
“Actually, the government set up rental and quick rental power plants to give benefit to its party-blessed businessmen in the name of subsidy to power sector. If the power tariff is raised, those businessmen will be benefited and the common people will be the great loser,” he said.
The CPB leader also observed that at a time when the Finance Minister laid out his plan to keep the inflation at 7 percent in the national budget, the PDB proposed to raise power tariff by 50 percent, which is a big paradox in the government policy.
“Further power tariff hike will push up inflation further as people’s purchasing capacity did not increase any more,” he said.
Advisor of Consumers Association of Bangladesh (CAB) Prof Shamsul Alam said the BERC had directed to create a gas fund and utilise it for gas sector’s development from the profit of gas sales. But the government has not yet made the gas fund functional for which gas production could not be increased and the government went for setting up costly rental power plants on the plea of gas sector.
He said: “The people should not be punished through increasing power tariff hike for the government’s failure.”
A representative of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) said that if the power tariff is increased further, it will also push up their production cost.
Secretary General of Bangladesh Auto Steel and Re-rolling Mills Association Abul Quasem Majumder said the further increase of power tariff will put the industries in great trouble as their production cost will go up, leading to a multiple effect in all kinds of business.
“Please, arrange public hearing in the rural areas to listen to the voice of the common people whether they want further power tariff hike or not. Exchange views with local Members of Parliament (MPs) to hear the views of the people’s representatives,” Ruhin Hossain Prince, a central leader of Communist Party of Bangladesh, told the 3-member Bangladesh Energy Regulatory Commission (BERC).
This is the first time representatives from different political parties, particularly the left parties, participated in the public hearing of the BERC. However, no representative from the main opposition BNP took part in the hearing.
The watchdog body organised the hearing at its office to listen to the views of different stakeholders in the power sector including consumers’ association, business and chamber bodies, and distribution companies on the proposal of the state-owned Power Development Board (PDB) for raising power tariff by 50 percent or Tk 2.01 per unit at the bulk level.
BERC’s technical team placed an analysis on the PDB’s proposal and recommended to raise the bulk tariff by 21.89 percent or Tk 0.88 per unit.
The three-member Commission headed by Syed Yusuf Hossain will give the final order on the PDB’s proposal.
Last month, the PDB placed the proposal to the BERC pleading to raise the power tariff to Tk 6.03 per kilowatt hour (each unit) from the existing Tk 4.02 per unit with effect from July 1.
This is the fourth time the PDB moved the energy regulators with their bulk power tariff hike proposal. Responding to the government body’s appeal, electricity prices were increased thrice in the last four months as part of the efforts to reduce subsidies in the power sector.
Power tariff for bulk clients was last increased in March by 7.49 percent to Tk 4.02 per unit from Tk 3.74 and for retail users by 6.25 percent to Tk 5.32 per unit from Tk 5.02.
Following the PDB’s pleading, different distribution companies also placed the proposal to the BERC to raise power tariff at the retail level, which will directly affect the common consumers if granted by the energy watchdog body.
In the public hearing, PDB chairman ASM Alamgir Kabir said they have been incurring huge loss for operating costly liquid-fuel based rental and quick rental power plants.
“If the power tariff is not increased at the bulk level, the PDB will have to face financial loss of Tk 12,500 crore in 2012-13 fiscal. If the fuel price goes up further, the loss will be greater,” he told the BERC.
Rural Electrification Board (REB) chairman Brig Gen Moin Uddin said that the palli bidyut samities (rural electricity cooperatives) are incurring huge loss of Tk 50 crore per month because of their buying electricity at higher rate and selling to consumers at lower rate.
He said REB does not have any objection in raising the bulk tariff hike if the tariff at retail level is also increased to offset their financial losses.
Responding to the PDB chairman’s argument, Ruhin Hossain Prince said the installation of quick rental and rental power plants was a “wrong strategy” of the government to resolve power crisis.
“Actually, the government set up rental and quick rental power plants to give benefit to its party-blessed businessmen in the name of subsidy to power sector. If the power tariff is raised, those businessmen will be benefited and the common people will be the great loser,” he said.
The CPB leader also observed that at a time when the Finance Minister laid out his plan to keep the inflation at 7 percent in the national budget, the PDB proposed to raise power tariff by 50 percent, which is a big paradox in the government policy.
“Further power tariff hike will push up inflation further as people’s purchasing capacity did not increase any more,” he said.
Advisor of Consumers Association of Bangladesh (CAB) Prof Shamsul Alam said the BERC had directed to create a gas fund and utilise it for gas sector’s development from the profit of gas sales. But the government has not yet made the gas fund functional for which gas production could not be increased and the government went for setting up costly rental power plants on the plea of gas sector.
He said: “The people should not be punished through increasing power tariff hike for the government’s failure.”
A representative of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) said that if the power tariff is increased further, it will also push up their production cost.
Secretary General of Bangladesh Auto Steel and Re-rolling Mills Association Abul Quasem Majumder said the further increase of power tariff will put the industries in great trouble as their production cost will go up, leading to a multiple effect in all kinds of business.
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