Bulk power tariff hike to help BPDB cut operating losses
Sunday, 5 October 2008
S M Jahangir
The latest hike in the bulk electricity tariff will help the state-run Bangladesh Power Development Board (BPDB) reduce its overall operating losses by around Tk 4.80 billion annually, official sources said.
The Bangladesh Energy Regulatory Commission (BERC) has raised the electricity prices by 16 per cent on an average from October 1, 2008, taking the BPDB's rising operating losses into consideration.
"An additional Tk 4.80 billion worth of revenue is expected to be available for the BPDB from the 16 per cent hike in the power tariffs," a senior official told the FE.
Such additional income is to be less than one-fourth of the BPDB's operating losses, the official said, adding that the state-run power entity's overall loss has been estimated at Tk 22 billion in the fiscal year (FY) 2008-09.
Taking the growing financial losses into account, the BPDB submitted an appeal to the Commission on June 15 last, seeking an average 41 per cent hike in its electricity tariffs both for the bulk and retail consumers, official sources said.
But the BERC issued an order on September 29, 2008 after completion of two-and-half months of process of reviewing the opinions of the stakeholders and conducting a public hearing on the hike in power tariff.
According to the order, the state-run Bangladesh Power Development Board (BPDB) will be selling electricity to its bulk consumers at an average rate of Tk 2.37/ kilowatt-hour against the previous rate of Tk 2.04/kilowatt-hour.
Officials at the BERC, on the other hand, said the average 16 per cent rise in the bulk power tariffs will help the BPDB's operating losses to a great extent.
"The upward adjustment will help the BPDB reduce its current losses to a great extent provided it is able to enhance its operational efficiency, especially in the field of system losses and recovery of outstanding arrear bills," a senior BERC official said.
Keeping the views in mind, the Commission has issued a number of instructions upon the BPDB, aiming to help improve its operational efficiency, services quality and ensure transparency and accountability in its overall activities.
Among them, the BPDB has also been asked to send a monthly report on reliability of its power generating units, number of outages and duration to the Commission by mid of every month from January 2009, said the BERC official.
According to sources, the BPDB has been incurring financial losses on account of selling power at lower price than the purchase costs, mainly from the independent power producers (IPPs) and rental power projects (RPPs).
The latest hike in the bulk electricity tariff will help the state-run Bangladesh Power Development Board (BPDB) reduce its overall operating losses by around Tk 4.80 billion annually, official sources said.
The Bangladesh Energy Regulatory Commission (BERC) has raised the electricity prices by 16 per cent on an average from October 1, 2008, taking the BPDB's rising operating losses into consideration.
"An additional Tk 4.80 billion worth of revenue is expected to be available for the BPDB from the 16 per cent hike in the power tariffs," a senior official told the FE.
Such additional income is to be less than one-fourth of the BPDB's operating losses, the official said, adding that the state-run power entity's overall loss has been estimated at Tk 22 billion in the fiscal year (FY) 2008-09.
Taking the growing financial losses into account, the BPDB submitted an appeal to the Commission on June 15 last, seeking an average 41 per cent hike in its electricity tariffs both for the bulk and retail consumers, official sources said.
But the BERC issued an order on September 29, 2008 after completion of two-and-half months of process of reviewing the opinions of the stakeholders and conducting a public hearing on the hike in power tariff.
According to the order, the state-run Bangladesh Power Development Board (BPDB) will be selling electricity to its bulk consumers at an average rate of Tk 2.37/ kilowatt-hour against the previous rate of Tk 2.04/kilowatt-hour.
Officials at the BERC, on the other hand, said the average 16 per cent rise in the bulk power tariffs will help the BPDB's operating losses to a great extent.
"The upward adjustment will help the BPDB reduce its current losses to a great extent provided it is able to enhance its operational efficiency, especially in the field of system losses and recovery of outstanding arrear bills," a senior BERC official said.
Keeping the views in mind, the Commission has issued a number of instructions upon the BPDB, aiming to help improve its operational efficiency, services quality and ensure transparency and accountability in its overall activities.
Among them, the BPDB has also been asked to send a monthly report on reliability of its power generating units, number of outages and duration to the Commission by mid of every month from January 2009, said the BERC official.
According to sources, the BPDB has been incurring financial losses on account of selling power at lower price than the purchase costs, mainly from the independent power producers (IPPs) and rental power projects (RPPs).