Public hearing on bulk electricity price hike on 18 May

Originally posted in The Business Standard on 09 April 2022

BPDB asked for a price hike to meet a Tk30,000 crore annual shortfall

Weeks after the public hearing on the gas price hike, Bangladesh Energy Regulatory Commission (BERC) now set 18 May for holding another hearing on bulk electricity price adjustment.

The energy regulator fixed the date to scrutinise a price adjustment proposal submitted by the state-run Bangladesh Power Development Board (BPDB).

All the concerned stakeholders were asked to send their pre-hearing written statements to the commission by 28 April to get registered for participating in the hearing.

From 21-24 March, the BERC held a public hearing on gas distribution companies’ 117% price hike proposals which received stark criticism from the consumers and other stakeholders.

In the proposal, BPBD said if the bulk electricity price is not raised then it will face a shortfall of Tk30,000 crore in the 2022 calendar year due to electricity purchase from expensive liquid oil-based plants and also gas price hike (which is now under process).

Therefore, it asked the regulator to increase the bulk electricity price to offset its expected deficit, said a source at BERC.

At present, BPDB sells per unit of electricity at Tk5.17 to the electricity distribution companies which was increased in the last tariff order in February 2020.

On the other hand, BPDB’s purchase cost of electricity from the oil-based rental and quick rental power plants varies from Tk3 per unit to Tk16 per unit and even more.

Due to this high-cost purchase and sales at a lower rate, BPDB has been incurring losses gradually which was being tackled by the government subsidy.

In 2010-11, the government provided a Tk4,511.90 crore subsidy to BPDB which was increased to Tk11,777.91 crore in the 2020-2021 fiscal year.