Consumers to spend 5.3 percent more as retail power prices hiked again

Electricity is set to become costlier as retail power prices have been hiked once again, the eighth time during the Awami League administration's two terms since 2009.

Reazul Basharand Faysal Atikbdnews24.com
Published : 23 Nov 2017, 08:25 AM
Updated : 23 Nov 2017, 04:33 PM

The Bangladesh Energy Regulatory Commission or BERC announced on Thursday that price of each unit, measured at kilowatt-hours, has been raised by Tk 0.35, marking a 5.3 percent increase.

The new rates will go into effect from December, BERC Chairman Monowar Islam said at a press conference.

He said users will not have to pay the minimum charge from now on.

The latest hike will not affect the power distribution companies, which means the new rates are only applicable for end users.

"Retail prices have been adjusted considering the increased cost of distribution companies," BERC chief Islam said explaining the hike.

New rates for household users

Price slab

Per unit cost

0 to 50 units

Tk 3.50

0 to 75 units

Tk 4

76 to 200 units

Tk 5.45

201 to 300 units

Tk 5.70

301 to 400 units

Tk 6.02

401 to 600 unit

Tk 9.30

Above 600 units

Tk 10.70

The move has been criticised by several political parties with the left politicians calling an eight-hour countrywide general shutdown for Nov 30.

Rights group the Consumers Association of Bangladesh or CAB has said after the announcement that they had argued against it during the BERC's public hearing and even proposed a drop.

CAB's Energy Affairs Adviser M Shamsul Alam described the public hearing as a 'farce'.

"Their argument for hiking prices was that 'prices of everything go up', which means the public hearing was pointless. It is a farce," he told bdnews24.com on Thursday.

The last power price revision happened in September 2015, when it was hiked by 2.93 percent.

Following the increase of gas prices in March this year, State Minister for Power and Energy Nasrul Hamid said power prices need to be revised.

In September, the BERC arranged a public hearing after going through proposals forwarded by the power distribution companies. A 15 percent increase in the wholesale price and a 6 to 14 percent increase at retail level were proposed at the hearing.

The Dhaka Power Distribution Company put forward proposals to increase price by 6.24 percent at the user level, Dhaka Electricity Supply Company proposed 6.34 percent, West Zone Power Distribution Company 10.36 percent, the Rural Electrification Board or REB 10.75 percent and Power Development Board 14.5 percent.

Despite the 5.3 percent hike, the BERC said at Thursday's media call that the minimum charge for using electricity has been rolled back.

It claimed the move will lead to lower charges for around 3 million consumers, who use up to 50 kilo-watt hours per month.

The energy regulators also claimed electricity bills of nearly 6 million rural consumers of the REB will not be affected by the hike.

BERC Member Mizanur Rahman said the ideal wholesale rate of per kilo-watt hour of electricity should be Tk 5.40. "But it's now Tk 4.84 on an average, which will cost the PDB Tk 3.6 billion in subsidies in the current fiscal year."

According to Rahman, the retail price revision will push the revenue of the power distribution companies by Tk 1.7 billion.

At the media briefing, the BERC presented a picture of how the new rates will apply for households.
 
                >>Use of 75 units per month will cost Tk 325 instead of Tk 310;
                >>Use of 100 units per month will cost Tk 461 instead of Tk 439;
                >>Use of 150 units per month will cost Tk 759 instead of Tk 711;
                >>Use of 250 units per month will cost Tk 1,341 instead of Tk 1,251;
                >> Use of 350 units per month will cost Tk 1,952 instead of Tk 1,815;
                >>Use of 450 units per month will cost Tk 2,743 instead of Tk 2,547;
                >>Use of 1000 units per month will cost Tk 8,543 instead of Tk 7,939;

The new charge for using electricity to run pumps for irrigation has been set at Tk 4 per unit, which means a 750-unit usage will now cost Tk 3,075 instead of Tk 2,895.

BERC chief Islam said electricity for pumps can be disconnected when irrigation is not needed and once again connected when necessary. No charges will be applicable during the period of disconnection this case, he added.

Commercial rate for small enterprises has been raised to Tk 2,120 from Tk 2,020 for a 200-unit use resulting in a 5 percent hike while for large businesses, the new rate will be Tk  131,000 for 15,000 units from the current Tk 118,450, marking a 10.6 percent hike.

In case of factories, smaller ones will have to pay Tk 16,550 for 2000 units, up 7.5 percent from the current Tk 15,390.

The cost for mid-sized factories to use 20,000 units will rise 7.5 percent to Tk 168,000 from Tk 156,300.

Large factories will have to count Tk 16.5 million for every 2 million units, marking a rise of 7.3 percent.