Business bodies, rights groups and left political parties in a maiden public hearing on power tariff cuts Thursday blamed 'flouting' of the energy regulator's order by the government and state-run entities for a rapid increase in electricity generation costs.
Had the Bangladesh Power Development Board (BPDB) carried out the Bangladesh Energy Regulatory Commission's (BERC's) order of adopting 'least cost generation expansion plan (LCGEP)' and followed 'merit order load dispatch principle (MOLDP), electricity generation costs could have been less than around Tk 78.43 billion, they argued.
The BERC in its August 27, 2015 tariff hike order asked the BPDB to implement the LCGEP and MOLDP to reduce overall electricity generation costs.
The government is charging interest of around 3.0 per cent on the money it provides to the BPDB to meet costs instead of providing interest-free subsidy, which is also a 'violation' of the BERC order, they mentioned.
They also demanded cuts in electricity tariff by increasing the efficiency level and decreasing generation from cost-intensive plants.
It is unfortunate that only the consumers are obeying the BERC order by paying increased tariff, but the state-run entities are disobeying the order, they lamented.
The Consumers Association of Bangladesh (CAB) placed the proposal to BERC to reduce bulk tariff rate of the BPDB by Tk 1.56 per unit (one kilowatt-hour) considering the costs for the fiscal year (FY) 2015-16.
The BPDB sought raising power tariffs by 14.78 per cent or Tk 0.72 per unit at bulk level, considering the costs in the FY 2015-16.
BERC chairman Monowar Islam said the commission will try to act according to the expectations of the people. "The expectations are enormous. We shall try," he said.
In his presentation, CAB's energy adviser Prof M Shamsul Alam alleged that instead of carrying out the BERC order, the BPDB, the country's lone buyer of electricity from power plants, went for purchasing an increased quantity of electricity from expensive power plants, keeping the low-cost power plants running in lower plant factor.
He said the BPDB's costs worth around Tk 13.01 billion could be saved if it would go for running state-run gas-fired power plants instead of buying electricity from gas-fired rental and quick rental power plants.
If state-run BPDB could purchase fuel from Bangladesh Petroleum Corporation (BPC) at international rate like as private sector, electricity generation costs worth around Tk 21.10 billion could be saved from furnace oil-fired power plants and Tk 5.60 billion from diesel-fired power plants.
The BPDB currently pays BPC Tk 65 for diesel per litre and Tk 42 for furnace oil per litre to run state-owned diesel and furnace oil-fired power plants, while it pays the private sector Tk 45 and Tk 24 for diesel and furnace oil respectively to purchase electricity from latter.
Mr Alam alleged that the Meghnaghat independent power producer (IPP) 305 megawatt (MW) power plant was 'illegally' allowed to run on high-cost diesel instead low-cost gas or furnace oil.
The BPDB could save Tk around 13.26 billion if the plant runs on gas, he added.
'Illogical' capacity payment to private sector causes a loss of around Tk 17.85 billion to the BPDB, he added.
The BPDB top officials acknowledged that electricity could be supplied at lower rate to consumers, had it got Tk 43 billion as subsidy without interest.
They sought BERC's intervention in this regard as it did not get any subsidy as per BERC order.
President of Communist Party of Bangladesh (CPB) Muzahidul Islam Selim urged the government to consider electricity one of the basic needs and not to make profit out of its generation like government's allocation to defence, education and law enforcement agencies.
Civil society representative Syed Abul Moksud echoed the same view, urging the government to treat as its service towards the people.
CPB leader Ruhin Hossain Prince stressed the need for establishing the real authority of the BERC to ensure the country's proper growth.
Joint secretary-general of CNG Association Hasin Parvez said one of the main costs of CNG pumps stems from electricity.
If the electricity cost goes up, it will affect the public transport fares as those run on CNG, he said.
Executive Director of the Forum for Energy Reporters' Bangladesh (FERB) Sadrul Hasan urged the BERC to set an example by reducing the electricity generation fairly.
Director of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) Amzad Hossain, Gonosanghoti Andolan chief coordinator Jonayed Saki, a number of business bodies including Dhaka Chamber of Commerce and Industry (DCCI), Bangladesh Textile Mills Association and Bangladesh Steel Re-rolling Mills Association also stood in protest against the tariff-hike move.
With Thursday's public hearing, the BERC concluded its eight- day hearing that started on September 25.
All the proposals excepting that of Thursday's were to raise electricity tariff.
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