Power price hike illogical, says CAB

Terming the latest power tariff hike 'unethical and illogical', Consumers Association of Bangladesh (CAB) made a 15-point demand Sunday including immediate withdrawal of government's decision on power price hike.
The consumer right organisation also threatened to go for legal battle unless increased power tariffs are not reviewed. When it was possible to reduce prices of power by Tk 1.56 per unit, the government raised prices by Tk 0.35 per unit.
The demands also include formation of a taskforce comprising representatives of consumer rights body to investigate irregularities, corruption and anti-consumer activities in power sector.
The demands were made at a press conference held at Dhaka Reporters Unity in the city aiming to ensure cheaper electricity for the consumers already hit hard by skyrocketing prices of essentials.
The government on November 23 last raised the prices of electricity by Tk 0.35 per unit, bypassing experts' opinion, claimed CAB.
"We want that the government reviews the recent power tariff hike as it was imposed bypassing experts' opinion at public hearing. If the authority doesn't meet our demand, we will go for legal fight to protect consumers' rights," Ghulam Rahman, president of CAB, said.
Energy Adviser to CAB Prof Shamsul Alam in his keynote paper said there was a surge in production costs of electricity which was Tk 132.2 billion in the fiscal year 2016-17. This is illogical, he added.
CAB sorted out illogical causes including disproportionate use of power generation capacity that costs the country additional Tk 33.81 billion, non-adjustment of global fuel prices Tk 26.72 billion, deficit in wholesale electricity price rate Tk 3.33 billion, selling electricity at a loss for irrigation purpose and marginal households Tk 30.46 billion and manpower and infrastructure Tk 18.04 billion.
The paper showed that the cost of electricity could rather be reduced by Tk 80 billion (Tk 1.56 per unit) if the government adopts load dispatch policy in order of merit and low-cost power generating techniques as per the directives of BERC (Bangladesh Energy Regulatory Commission) itself.
The paper pointed out that as per BERC decision on power tariff hike, deficit in the wholesale electricity price was Tk 0.71 per unit (total of Tk 43.32 billion).
BERC said the deficit was adjusted by government incentives of Tk 36.0 billion (Tk 0.6 per unit) and minimising Tk 6.71 billion from consumers incentives at power and development fund which helped keep the prices static at wholesale level.
It also said the prices increased by Tk 0.35 per unit at retail level because of a surge in operating costs of PDB and REB by Tk 20.78 billion--- for raising salary, manpower capacity of REB (Rural Electrification Board) etc.
"The surge in such costs and its adjustment with retail prices were proved as illogical and illegal at public hearing which shows that raising the prices by BERC had no logical ground," Prof Shamsul Alam said.
He said: "So, we think, the power tariff hike was not based on public hearing, it was BERC's lone decision and it was beyond its jurisdiction."
In the public hearing, it was proved that the proposal to reduce the prices of power was logical, but BERC bypassed it and was seen biased for the rental and quick rental's capacity payment, he said.
CAB, however, demanded removal of all former and present chairmen and board members of power production, generation and distribution companies from the regulatory body to ensure its neutral and corruption-free functioning.
Secretary of CAB Humayun Kabir Bhuiyan, convener of national committee on consumers' rights of CAB Mubasshar Hussain, vice president of the organisation S M Nazer Hossain also spoke at the press conference.
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The demands were made at a press conference held at Dhaka Reporters Unity in the city aiming to ensure cheaper electricity for the consumers already hit hard by skyrocketing prices of essentials.
The government on November 23 last raised the prices of electricity by Tk 0.35 per unit, bypassing experts' opinion, claimed CAB.
"We want that the government reviews the recent power tariff hike as it was imposed bypassing experts' opinion at public hearing. If the authority doesn't meet our demand, we will go for legal fight to protect consumers' rights," Ghulam Rahman, president of CAB, said.
Energy Adviser to CAB Prof Shamsul Alam in his keynote paper said there was a surge in production costs of electricity which was Tk 132.2 billion in the fiscal year 2016-17. This is illogical, he added.
CAB sorted out illogical causes including disproportionate use of power generation capacity that costs the country additional Tk 33.81 billion, non-adjustment of global fuel prices Tk 26.72 billion, deficit in wholesale electricity price rate Tk 3.33 billion, selling electricity at a loss for irrigation purpose and marginal households Tk 30.46 billion and manpower and infrastructure Tk 18.04 billion.
The paper showed that the cost of electricity could rather be reduced by Tk 80 billion (Tk 1.56 per unit) if the government adopts load dispatch policy in order of merit and low-cost power generating techniques as per the directives of BERC (Bangladesh Energy Regulatory Commission) itself.
The paper pointed out that as per BERC decision on power tariff hike, deficit in the wholesale electricity price was Tk 0.71 per unit (total of Tk 43.32 billion).
BERC said the deficit was adjusted by government incentives of Tk 36.0 billion (Tk 0.6 per unit) and minimising Tk 6.71 billion from consumers incentives at power and development fund which helped keep the prices static at wholesale level.
It also said the prices increased by Tk 0.35 per unit at retail level because of a surge in operating costs of PDB and REB by Tk 20.78 billion--- for raising salary, manpower capacity of REB (Rural Electrification Board) etc.
"The surge in such costs and its adjustment with retail prices were proved as illogical and illegal at public hearing which shows that raising the prices by BERC had no logical ground," Prof Shamsul Alam said.
He said: "So, we think, the power tariff hike was not based on public hearing, it was BERC's lone decision and it was beyond its jurisdiction."
In the public hearing, it was proved that the proposal to reduce the prices of power was logical, but BERC bypassed it and was seen biased for the rental and quick rental's capacity payment, he said.
CAB, however, demanded removal of all former and present chairmen and board members of power production, generation and distribution companies from the regulatory body to ensure its neutral and corruption-free functioning.
Secretary of CAB Humayun Kabir Bhuiyan, convener of national committee on consumers' rights of CAB Mubasshar Hussain, vice president of the organisation S M Nazer Hossain also spoke at the press conference.

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