The country's electricity consumers are set to pay the price of extension of tenure of several rental and quick rental power plants and non-implementation of big power projects by counting additional tariff from March next, industry insiders said.
Instead of reducing electricity tariff, as per the initial plan, the government is all set to enforce a significant hike in power tariff, they said.
"This is an instance of very bad governance," energy expert Professor Badrul Imam told the FE.
None of the high-cost and oil-fired rental and quick rental power plants has retired as per the government planning, instead the tenure of seven such plants has already been extended, a senior energy ministry official said.
The Power Division under the Ministry of Power, Energy and Mineral Resources (MPEMR) is now scrutinising several such proposals from some other rental and quick rental power plant sponsors for extension of tenure, a senior ministry official said.
Had the government stuck to its initial planning, the electricity tariff would have declined by 3.0 per cent from July 2014 and dropped further by another 3.0 per cent from July 2015, a senior official of state-owned Bangladesh Power Development Board (BPDB) said.
The high-cost rental and quick rental power plants were not supposed to get extension, but were to be closed after tenure, said Professor Imam of Geology Department of Dhaka University.
Besides, none of the medium and long-term base-load power plants is on schedule of implementation, he added.
The extension of the tenure of rental and quick rental power plants has increased the electricity supply costs, said former Director General of state-run Power Cell, BD Rahmatullah.
The government had been focusing mostly on implementing short-term oil-fired rental and quick rental power plants, most of which were awarded unsolicited bypassing tendering process, he alleged.
The mid- and long-term planning to increase electricity generation by installing base-load power plants are not anywhere near implementation, he observed.
He also alleged that the sponsors of big base-load power plants are slow in implementing projects 'deliberately', having nexus with a section of government officials to get the tenure of rental and quick rental power plants renewed as most of them are also the sponsors of such plants.
All state-owned electricity distribution companies have already submitted fresh proposals to the energy regulator seeking hike in electricity tariff within the range between 11 per cent and 20 per cent.
Bangladesh Energy Regulatory Commission (BERC) has accepted their proposals and arranged public hearing on March 4, 5 and 6 on the tariff hike proposals before announcing the new tariff, BERC member Dr Selim Mahmud said. Technical evaluation committee of the commission is working on the proposals, he said.
The announcement of fresh electricity tariff hike might come by the end of March, but the hike might be with retrospective effect from March 1, 2014, the official added.
Officials said the move for fresh tariff hike of electricity had gained momentum after getting a go-ahead from Prime Minister Sheikh Hasina, who is also the minister of the MPEMR, on February 6 last.
Since 2009, the BERC has increased retail electricity tariff six times, the latest in September, 2012.
The energy regulator hiked average bulk and retail electricity tariff by 16.92 per cent and 15 per cent respectively during the latest hike on September 20, 2012.
After that hike, all the electricity distribution companies again submitted proposals for further hike in electricity tariff in December, 2012.
The commission had also held public hearing on the tariff hike proposals and decided to raise the tariff by 5.0 per cent on an average.
But the decision was put to a halt following request from Prime Minister Sheikh Hasina with a view to avoiding adverse public reaction before the general election.
The technical evaluation committee of BERC then recommended a hike in electricity tariff by 3.30 per cent for Dhaka Power Distribution Company (DPDC) and 3.65 per cent for Dhaka Electric Supply Company (DESCO) consumers.
DESCO had sought to raise the power tariff at the consumer level by an average of 11.69 per cent, while DPDC proposed an 11.31 per cent increase.
The BERC evaluation committee had recommended 4.84 per cent and 4.15 per cent hikes in retail electricity tariffs for the consumers of Bangladesh Power Development Board (BPDB) and West Zone Power Distribution Company (WZPDC) respectively.
The BPDB had sought 12 per cent hike in retail electricity tariff, while the WZPDC had sought 9.59 per cent hike.
The BPDB argued that it will incur a loss of Tk 5.16 billion this year if the tariff is not hiked.
The commission, however, opposed the retail tariff hike proposal of the Rural Electrification Board (REB) saying that the REB had not provided accurate information.
The cost of electricity has been rising as the government adopted short-term measures of installing dozens of high-cost diesel and furnace oil-fired rental power plants to ease the country's mounting electricity crisis.
The cost of supplying power to bulk customers in September, 2011 was Tk 4.15 per unit. It soared to around Tk 6.8 per unit by fiscal year 2012-13, a senior BPDB official said.
The cost averaged Tk 2.62 per unit in fiscal 2009-10, he added.
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