THE recommendations for an increase in bulk power prices by 20 per cent and in transmission charges by 7 per cent that the technical evaluation committee of the Bangladesh Energy Regulatory Commission put forth at a public hearing on Thursday come concerning as any such increases are highly likely to leave impact on retail power prices soon. Retail power prices were last increased on November 23, 2017 by an average of 5.3 per cent, or Tk 0.35, a unit and bulk power prices on September 1, 2015 by 2.93 per cent, or Tk 0.23, a unit. The committee in the case at hand has proposed that an increase by 19.5 per cent in bulk power prices should be justified while the Power Development Board has sought a 23.27 per cent increase; and the committee has proposed that the transmission charges for the Power Grid Company of Bangladesh should be increased by 6.92 per cent against 50.27 per cent that the company has sought. With the hearing still going on, other arguments should be forthcoming, but the argument put forth till now that the increase seeks to make up for the projected deficit or to stem a decline in profits of the distributors hardly appears tenable.
Deficit in the power sector is said to have doubled to Tk 80 billion in 2018, in a year, from Tk 36 billion in 2017, which had come down from Tk 40 billion a year before. The Power Development Board in its presentation at the hearing has said that the deficit in the power sector will have increased to more than Tk 85 billion in 2020. While the deficit going down and almost going through the roof and the reasons can well be debated, experts believe that the doubling of the deficit is the outcome of the wrong power policy of the government and people should not pay for the wrongly-premised move. The government is often blamed for a forced continuation of the expensive crisis-time measure of rental and quick rental power, without putting in the required efforts to afford people cheap power from state-owned plants, to advantage certain quarters. The expensive rental power plants, introduced towards the end of the first decade of the century, were meant to be replaced with less expensive power plants by 2014. It did not happen. The government has, rather, increased its power production capacity much beyond the demand, which has forced many plants to sit idle and the government keeps making capacity payment to the plants for the power not yet produced. The government, as the power board says, has paid Tk 590 billion in capacity payment in the past 12 years, which is said to have added to the deficit.
It is, therefore, illogical and unethical for the government to pass the cost of its wrong power policy onto consumers. Increase in power prices at a time when goods prices are much too high could also cause social unrest of a sort. Any decision on power price increase, at the bulk or the retail level, must, therefore, warrant that the government should first set its power policy aright.
- Courtesy — NewAge/ Nov 30, 2019
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