PDB makes yet another move to hike power rates
Thursday, 21 October 2010
M Azizur Rahman
The government has moved afresh to hike the power tariff to contain mounting subsidy as the cost of electricity generation is skyrocketing with the installation of high-cost diesel and furnace-oil run power plants, top officials said Wednesday.
The state-owned Power Development Board (PDB) has recently submitted a proposal to the power ministry for an upward power tariff adjustment, PDB Chairman ASM Alamgir Kabir said.
Though the PDB Chairman did not disclose the tariff the board has proposed but a senior official said it would require an increase of 53 per cent in tariff from the current rate for 2011 alone to reduce the amount of subsidy.
In the year 2012 the power tariff requires to be 22 per cent higher than the previous year and in 2013 it should be 13 per cent higher, said the official.
Alternatively, the government can resort to making upward tariff adjustment by 12 per cent every year, said the PDB official.
Power tariff was adjusted upward in March this year when thr Bangladesh Energy Regulatory Commission (BERC) hiked in electricity prices for all types of urban and commercial subscribers by six to seven per cent, on an average.
Officials said if the government fails to make upward power tariff adjustment the subsidy for the PDB alone would soar to Tk 79.19 billion by 2015.
The accumulated subsidy in all the state-owned power entities might go beyond Tk 150 billion within the next five years, they said.
If the government fails to raise the tariff every year the financial burden will go up further, said the official.
Currently, the government is giving PDB a subsidy worth around Tk 10 billion annually.
But the government is at risk of providing hefty subsidy as it has prioritised electricity generation from liquid-fuel run power plants instead of conventional fuels such as gas or coal.
The government has targeted generation of around 11,500 megawatts (mw) of electricity by 2015.
Some 5,500 mw of electricity or more than half of the total generation will be produced by high-cost diesel and furnace oil run power plants.
Under the mega plan, an additional 465 mw of electricity will be added within next three months of 2010, 2,184 mw in 2011, 2,137 mw in 2012, 2,000 mw in 2013, 1,670 mw in 2,014 and 3,050 mw in 2015.
Several 'quick' rental power plants have already been set up and started generating electricity.
Of the total plants, 1,450mw capacity diesel and furnace oil run power plants will be commissioned in 2010, 620mw oil-fired plants in 2011, 1800mw capacity in 2012 and 400mw oil-fired capacity plants in 2013.
Average electricity supply cost from these power plants will be around Tk 8.0 per unit for furnace oil run power plants and around Tk 14 for diesel-run power plants.
The PDB currently incurs a loss of Tk 0.35 for every unit of power it sells to consumer against its average bulk power supply cost of Tk 2.37 per unit.
The PDB's average bulk power supply cost might double to over Tk 5.0 per unit (1 kilowatt-hour) by 2013 with the commissioning of new oil-fired power plants.
The board's average supply cost will soar to over Tk 4.0 per unit by 2010, Tk 4.92 by 2011-12 and Tk 5.0 by 2013 with the start of electricity generation from the high cost fuel-run plants.
Currently, the domestic consumers who consume electricity up to 100 units are paying Tk 2.60 per unit, subscribers using electricity between 101 and 400 units are paying Tk 3.30 per unit and those who consume over 400 units are paying Tk 5.65 per unit.
Flat rate for the consumers of small industries is Tk 4.35 per unit, while peak-hour electricity rate is Tk 5.86 per unit and off-peak rate is Tk 3.50 per unit.
Commercial consumers are now paying Tk 5.58 per unit as flat rate, Tk 4.05 per unit as off-peak rate and Tk 8.45 per unit as peak-hour rate.
Flat rate for the 11 kilo-volt (kV) consumers is Tk 4.17 per unit, while the off-peak-hour rate is Tk 3.43 per unit and the peak hour rate is Tk 7.12 per unit.
The flat electricity tariff for the consumers of 33 kV is now Tk 3.92 per unit, while the off-peak rate is Tk 3.33 per unit and peak hour rate is Tk 6.82 per unit.
Flat rate for 132 kV electricity consumers is now Tk 3.10 per unit.
The government has moved afresh to hike the power tariff to contain mounting subsidy as the cost of electricity generation is skyrocketing with the installation of high-cost diesel and furnace-oil run power plants, top officials said Wednesday.
The state-owned Power Development Board (PDB) has recently submitted a proposal to the power ministry for an upward power tariff adjustment, PDB Chairman ASM Alamgir Kabir said.
Though the PDB Chairman did not disclose the tariff the board has proposed but a senior official said it would require an increase of 53 per cent in tariff from the current rate for 2011 alone to reduce the amount of subsidy.
In the year 2012 the power tariff requires to be 22 per cent higher than the previous year and in 2013 it should be 13 per cent higher, said the official.
Alternatively, the government can resort to making upward tariff adjustment by 12 per cent every year, said the PDB official.
Power tariff was adjusted upward in March this year when thr Bangladesh Energy Regulatory Commission (BERC) hiked in electricity prices for all types of urban and commercial subscribers by six to seven per cent, on an average.
Officials said if the government fails to make upward power tariff adjustment the subsidy for the PDB alone would soar to Tk 79.19 billion by 2015.
The accumulated subsidy in all the state-owned power entities might go beyond Tk 150 billion within the next five years, they said.
If the government fails to raise the tariff every year the financial burden will go up further, said the official.
Currently, the government is giving PDB a subsidy worth around Tk 10 billion annually.
But the government is at risk of providing hefty subsidy as it has prioritised electricity generation from liquid-fuel run power plants instead of conventional fuels such as gas or coal.
The government has targeted generation of around 11,500 megawatts (mw) of electricity by 2015.
Some 5,500 mw of electricity or more than half of the total generation will be produced by high-cost diesel and furnace oil run power plants.
Under the mega plan, an additional 465 mw of electricity will be added within next three months of 2010, 2,184 mw in 2011, 2,137 mw in 2012, 2,000 mw in 2013, 1,670 mw in 2,014 and 3,050 mw in 2015.
Several 'quick' rental power plants have already been set up and started generating electricity.
Of the total plants, 1,450mw capacity diesel and furnace oil run power plants will be commissioned in 2010, 620mw oil-fired plants in 2011, 1800mw capacity in 2012 and 400mw oil-fired capacity plants in 2013.
Average electricity supply cost from these power plants will be around Tk 8.0 per unit for furnace oil run power plants and around Tk 14 for diesel-run power plants.
The PDB currently incurs a loss of Tk 0.35 for every unit of power it sells to consumer against its average bulk power supply cost of Tk 2.37 per unit.
The PDB's average bulk power supply cost might double to over Tk 5.0 per unit (1 kilowatt-hour) by 2013 with the commissioning of new oil-fired power plants.
The board's average supply cost will soar to over Tk 4.0 per unit by 2010, Tk 4.92 by 2011-12 and Tk 5.0 by 2013 with the start of electricity generation from the high cost fuel-run plants.
Currently, the domestic consumers who consume electricity up to 100 units are paying Tk 2.60 per unit, subscribers using electricity between 101 and 400 units are paying Tk 3.30 per unit and those who consume over 400 units are paying Tk 5.65 per unit.
Flat rate for the consumers of small industries is Tk 4.35 per unit, while peak-hour electricity rate is Tk 5.86 per unit and off-peak rate is Tk 3.50 per unit.
Commercial consumers are now paying Tk 5.58 per unit as flat rate, Tk 4.05 per unit as off-peak rate and Tk 8.45 per unit as peak-hour rate.
Flat rate for the 11 kilo-volt (kV) consumers is Tk 4.17 per unit, while the off-peak-hour rate is Tk 3.43 per unit and the peak hour rate is Tk 7.12 per unit.
The flat electricity tariff for the consumers of 33 kV is now Tk 3.92 per unit, while the off-peak rate is Tk 3.33 per unit and peak hour rate is Tk 6.82 per unit.
Flat rate for 132 kV electricity consumers is now Tk 3.10 per unit.