Bulk power tariff hike today

FE Report Electricity for bulk consumers is going to be costlier than at present as the energy regulator has decided to announce a fresh hike for bulk power tariff today (Thursday), a top official has said. "We will declare a new bulk electricity tariff hike Thursday," Member of Bangladesh Energy Regulatory Commission (BERC) Dr Salim Mahmud told the FE Wednesday. Mr Mahmud, however, did not disclose the extent of the hike. State-owned Bangladesh Power Development Board (BPDB) had earlier sought to raise the bulk rate of electricity in phases by 15 per cent in every three months from November 2011 until July 2012 and then by another 14 per cent in January 2013. The current bulk tariff rate is Tk 2.813 per unit (1 kilowatt-hour - kWh). But, BPDB says, power supply cost to bulk consumers against per unit of electricity is now Tk 4.15. Bulk electricity supply costs will increase further to Tk 4.86 per unit by the end of current fiscal year (FY 2011-12), it said. "Bulk electricity supply cost was only Tk 2.62 per unit during FY 2009-10. But due to installation of dozens of high-cost diesel and furnace-oil fired power plants the supply costs will rise by 85 per cent to Tk 4.86 per unit by FY 2011-12 compared to that of 2009-10," BPDB said justifying the enhancement of bulk tariff rate. BPDB sought that the bulk electricity tariff be raised to Tk 3.24 per unit from November 2011 with a 15 per cent hike, Tk 3.72 per unit from March 2012 with another 15 per cent hike, Tk 4.28 per unit from July 2012 following another hike by 15 per cent and Tk 4.86 per unit from January 2013 with further hike of 14 per cent. The BPDB usually purchases electricity from power generation companies and sells to state-run distribution agencies to reach end-users. The board is also involved in electricity generation, he said. Once the bulk tariff rate is hiked, the distribution entities including Dhaka Power Distribution Company Ltd (DPDC), Dhaka Electric Supply Company (DESCO), Rural Electrification Board (REB) and West Zone Power Distribution Company (WZPDC) will have to count extra-money to purchase electricity from the BPDB. Officials said immediately after the start of the commissioning of new high-cost rental and quick rental power plants last year, BPDB had sought to raise the bulk electricity tariff by 12 per cent in every six months or at an annual rate of over 25 per cent for years up to 2013 to help reduce the amount of subsidy and ensure payment against electricity purchase from the power plant sponsors. But BERC raised bulk tariff by 11 per cent from February 1, 2011. Bulk power tariff was also raised further by 6.66 per cent from August 1, 2011 meaning that overall hike in power tariff for bulk consumers is now 18.14 per cent higher than that of pre-February, 2011. Following the hike, the average bulk tariff rate of electricity increased to Tk 2.813 per unit from the previous Tk 2.37 per unit. But the BPDB has been purchasing electricity at Tk 13 to Tk 14 per unit from the diesel-fired rental and quick rental power plants and at around Tk 7.0 per unit from furnace oil-fired power plants, said a BPDB official. If the bulk tariff rate is not hiked, BPDB's overall loss in FY 2011-12 alone would be around Tk 73 billion.