Changes in regulations for fixing benchmark power tariff planned
Tuesday, 18 May 2010
M Azizur Rahman
The country's energy regulator has planned for a change in its regulations for fixing benchmark power tariff, as prescribed by the power ministry, to facilitate electricity purchases from private sector plants, a top official said.
"We are working to make some changes in our existing regulations making room for fixing benchmark power tariff," Bangladesh Energy Regulatory Commission (BERC) Chairman Syed Yusuf Hossain told the FE Monday.
A letter to this effect would be submitted to the energy ministry shortly, he said.
The tariff would be fixed on the basis of locations of power plants and the kinds of fuel they would use to generate electricity, said the commission chairman.
A few weeks back, the power ministry asked the commission to search out a benchmark electricity tariff in accordance with the kinds of fuel and locations of the private sector power plants.
But the BERC could not do anything but formed a committee to look for ways to fix benchmark tariff structure, as the existing commission rules did not permit it to fix any 'benchmark' price of electricity, a senior commission official said.
Even the word 'benchmark' was not incorporated in any place of the commission act based on which the BERC remains operational, he added.
At present, the commission only considers electricity tariff adjustment for any company reviewing at least one year's fiscal performance of the said company.
But for the new, or planned power plant companies the commission does not have any mechanism to fix any tariff structure.
The government recently amended the 'Policy Guidelines for Enhancement of Private Participation in the Power Sector, 2008' allowing building power plants by private sector to face the country's worst-ever power crisis.
Under the amended policy the government would be able to purchase electricity from the firms based on a benchmark price to be fixed by the BERC.
Private firms would be allowed to run their plants with any fuel like furnace oil, coal, imported gas, wind, solar power, hydro power, waste and liquefied natural gas under the amended policy.
Under the amended power sector policy, no prior experience by private firms in Bangladesh would be required for building the power plants.
Private companies would be able to set up power plants anywhere across the country after attaining licence from the energy regulator if their proposals become technically viable.
Apart from selling their output to state-owned power entities, the private firms would also have their liberty to sell electricity to any large private consumers.
Witnessing the country's unprecedented power crisis, a good number of private firms have recently come forward to generate electricity and sell the output to the consumers, both public and private, said a power ministry official.
The ministry would consider their pleas only after fixing the benchmark price of electricity, he added.
The government is now moving ahead with multi-pronged strategies to ease the nagging electricity crisis across the country with the overall generation hovering around 3,800 megawatts (mw) against the demand for over 5,500 mw.
Setting up 'quick' rental unsolicited power plants are the latest among such moves.
The country's energy regulator has planned for a change in its regulations for fixing benchmark power tariff, as prescribed by the power ministry, to facilitate electricity purchases from private sector plants, a top official said.
"We are working to make some changes in our existing regulations making room for fixing benchmark power tariff," Bangladesh Energy Regulatory Commission (BERC) Chairman Syed Yusuf Hossain told the FE Monday.
A letter to this effect would be submitted to the energy ministry shortly, he said.
The tariff would be fixed on the basis of locations of power plants and the kinds of fuel they would use to generate electricity, said the commission chairman.
A few weeks back, the power ministry asked the commission to search out a benchmark electricity tariff in accordance with the kinds of fuel and locations of the private sector power plants.
But the BERC could not do anything but formed a committee to look for ways to fix benchmark tariff structure, as the existing commission rules did not permit it to fix any 'benchmark' price of electricity, a senior commission official said.
Even the word 'benchmark' was not incorporated in any place of the commission act based on which the BERC remains operational, he added.
At present, the commission only considers electricity tariff adjustment for any company reviewing at least one year's fiscal performance of the said company.
But for the new, or planned power plant companies the commission does not have any mechanism to fix any tariff structure.
The government recently amended the 'Policy Guidelines for Enhancement of Private Participation in the Power Sector, 2008' allowing building power plants by private sector to face the country's worst-ever power crisis.
Under the amended policy the government would be able to purchase electricity from the firms based on a benchmark price to be fixed by the BERC.
Private firms would be allowed to run their plants with any fuel like furnace oil, coal, imported gas, wind, solar power, hydro power, waste and liquefied natural gas under the amended policy.
Under the amended power sector policy, no prior experience by private firms in Bangladesh would be required for building the power plants.
Private companies would be able to set up power plants anywhere across the country after attaining licence from the energy regulator if their proposals become technically viable.
Apart from selling their output to state-owned power entities, the private firms would also have their liberty to sell electricity to any large private consumers.
Witnessing the country's unprecedented power crisis, a good number of private firms have recently come forward to generate electricity and sell the output to the consumers, both public and private, said a power ministry official.
The ministry would consider their pleas only after fixing the benchmark price of electricity, he added.
The government is now moving ahead with multi-pronged strategies to ease the nagging electricity crisis across the country with the overall generation hovering around 3,800 megawatts (mw) against the demand for over 5,500 mw.
Setting up 'quick' rental unsolicited power plants are the latest among such moves.