BPDB to incur Tk 302.52b loss annually if bulk power tariff not raised

Originally posted in The Financial Express on 16 April 2022

State-owned Bangladesh Power Development Board (BPDB) will incur an annual loss of Tk 302.52 billion if the bulk power tariff is not raised.

Such a claim was made in a proposal placed by the BPDB to the Bangladesh Energy Regulatory Commission (BERC), appealing to raise the bulk power tariff in order to offset its loss, says a UNB report.

Responding to the appeal, the energy regulator decided to hold a public hearing on May 18 as per the BERC Act 2003.

In the proposal, the BPDB also claimed that it will require approximately Tk 741.89 billion to generate 88.993 billion units of electricity in the calendar year 2022.

“The bulk power tariff needs to be readjusted considering the possible hike in gas tariff. The BPDB is expecting an income of Tk 439.37 billion. So, the gap between income and expenditure will be Tk 302.51 billion,” said the BPDB in the proposal.

It attributed blamed increasing fuel costs and other soaring expenses for its losses, saying that the production cost of electricity has gone up to Tk 4.24 per unit in 2022 from Tk 2.13 in the fiscal year 2019-20.

The state-run Bangladesh Power Development Board moved the proposal a few months back urging the energy regulator to set the bulk power tariff at Tk 8.58 instead of the existing Tk 5.17 per kilowatt-hour.

Power industry insiders said that it is obvious that if the bulk electricity is raised, it will ultimately push up the tariff at the retail level. Any rise in bulk tariff will be applicable to the power distribution companies as they are the bulk consumers.

They buy electricity from BPDB in bulk and then sell it to the public at retail rates. So, the public hearing on retail tariff will come consequently, said an industry insider.

All the state-owned power distribution companies have already submitted their respective proposals to the BERC to raise the power rates at retail level.

But this time, the BERC is going to hold a public hearing on bulk power tariff proposal keeping the request for raising retail price pending.

BERC member Syed Mokbul-e-Elahi Chowdhury said the regulator wants to first settle the bulk tariff proposal.

“This time we want to keep the hearing only on the bulk tariff proposal… the issue of retail tariff will be settled later by the commission,” he said.

Meanwhile, the BERC held a four-day public hearing on proposals of different gas companies on March 21-24 to raise the gas price.

However, BERC has not yet made any decision following the public hearing.