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Friday, December 28, 2012
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Power tariff hike proposal opposed

REB faces criticism during BERC hearing

Rights activists, industrialists and politicians yesterday vehemently opposed proposals to increase retail power tariff that rose six times since 2010.

The objections came at a hearing at Bangladesh Energy Regulatory Commission (BERC) in Dhaka on the Rural Electrification Board's (REB) suggestion for an average 9 percent increase in power tariff.

REB, a distribution company, asked the energy regulator to raise the retail price to cut subsidy amid an increase in bulk tariff and cost of services.

Prof M Shamsul Alam, energy adviser to the Consumers' Association of Bangladesh, said the retail power tariff was already so high that a further increase would prompt people to refrain from paying bills.

It was the responsibility of the regulatory commission to protect consumers' interests and ensure their affordability but it had failed to do so, he said.

Shamsul, head of the electrical and electronics engineering department of Daffodil International University, blamed the energy ministry for adopting ways to have the power tariff increased.

"We have to rein in the power price hike," said Mohammad Hatem, senior vice-president of Bangladesh Knitwear Manufacturers and Exporters Association.

The garment sector would otherwise see unrest, he said, "no matter we raise their wages or not as workers' cost of living has gone up due to the [previous] power hikes."

In a written statement circulated at the hearing, Bangladesh Garment Manufacturers and Exporters Association said the cost of power went up by 32 percent in the last one year.

"If the price hike continues it will be tough for the garment sector to sustain competitive edge."

When the commission increased the retail price in September, it gave an assurance that the power tariff would not be raised for a year unless the oil prices at the international market went up abnormally, Junaed Saki, who represented the Democratic Left Alliance, said, but now the commission was hearing proposals for a further increase.

"The commission is not looking at people's interests," he said, adding BERC should reject this proposal along with those of other distributors.

"It will be a great relief if the commission sticks to its earlier decision that it would not raise the tariff in the next one year," said Shahedul Islam Helal, a director of the Federation of Bangladesh Chambers of Commerce and Industry.

Emdadul Haque, chairman of BERC, said the distribution companies would have to give logic for price hike.

The BERC technical committee that had analysed the proposal said there was no reason to raise the power tariff for REB as the operating revenue would be higher in fiscal 2012-13 than its revenue need.

REB supplies power to about 91 lakh consumers across the country through 70 associations.

It now buys electricity from the Power Development Board (PDB) at Tk 4.26 a kilowatt-hour which was Tk 3.25 a unit before the price rise in September. However, the cost of per unit power comes at Tk 6.49 after it is supplied to consumers.

The hearing was held in less than four months after the commission increased, through an interim order, the retail tariff for all distributors by an average of 15 percent.

The regulatory commission raised the tariff when the distributors claimed they were facing financial strains following the rise of bulk tariff by 16.92 percent.

It will hold hearings on the proposals of PDB and West Zone Power Distribution Company Ltd on December 30 and those of Dhaka Electric Supply Company and Dhaka Power Distribution Company the following day.

The final decision, whether the tariff would be increased, will come after that.

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