Electricity consumers are set to face higher bills as the government considers combining tariff hikes with the restructuring of residential billing slabs in a move that could sharply raise costs for middle-range users.
The Power Development Board (PDB) has proposed increasing wholesale prices by 17–21 percent, citing rising fuel import costs, capacity charges for idle plants, and mounting operational losses of distributors.
All six distribution companies, along with the transmission operator, have submitted proposals to the Bangladesh Energy Regulatory Commission (BERC), seeking retail tariff hikes of 15–29 percent across different slabs.
If approved, the changes would affect most of the country’s 4.95 crore electricity customers, already burdened by higher fuel oil, LPG, and commodity prices.
The distributors together lost Tk 2,638 crore in FY2024-25 under the current tariff structure and project losses exceeding Tk 3,800 crore in FY26 without adjustments. Most of them sought a revision of pricing to reduce the gap, effective from June 1.
The distributors do not have the authority to propose such changes in the slab structure. PDB may propose tariff adjustments, but it cannot dictate how the deficits should be recovered.
Prof M Shamsul Alam Energy adviser to Consumers Association of Bangladesh
Documents reviewed by The Daily Star show they want to pass not only higher wholesale and transmission costs but also their own operational expenditures and accumulated deficits to end users.
Public hearings on the wholesale and retail tariff proposals are scheduled for May 20 and 21 at the Krishibid Institution Bangladesh auditorium in Dhaka.
SLAB RESTRUCTURING
PDB’s proposals include redefining residential slabs, which could significantly increase bills for lower-middle and middle-income households consuming up to 200 kilowatt-hours (kWh) monthly.
Currently, lifeline users consuming up to 50 kWh and those using up to 75 kWh enjoy lower rates. Consumers using up to 200 units also enjoy the lower rate for the first 75 kWh.
PDB now seeks to abolish that benefit for the consumers using up to 200 units. This means a household consuming 76-200 kWh would pay the higher rate for all usage; there will be no lower rate for them for the first 75 kWh.
At present, 200 units cost Tk 1,295: first 75 units at Tk 5.26 and the remaining 125 units at Tk 7.20. This excludes VAT and demand charges.
If the restructuring is implemented without tariff hikes, the same usage would cost Tk 1,440 because all 200 units would be billed at the higher slab rate.
With the proposed hike to Tk 8.20 from Tk 7.20 per unit for the higher slab, the bill would rise further to Tk 1,640, nearly 27 percent higher.
PDB estimates 35 percent of consumers would face extra billing pressure from restructuring alone, including 23 percent of lower-middle-income households.
The change could generate additional Tk 2,657 crore annually in retail revenue.
According to PDB data, Bangladesh has more than 4.31 crore residential electricity consumers. Of them, 43 percent are lifeline consumers using up to 50 units monthly, while another 22 percent consume up to 75 units.
Around 1 crore 53 lakh consumers use between 76 and 200 units monthly. These consumers are likely to be affected the most by the slab restructuring.
Beyond households, irrigation pumps, constructors, educational institutions, hospitals, commercial buildings, industries, and battery-charging stations would face hikes of 15–29 percent.
High-demand users could see 19–29 percent increases, while battery-charging stations face the steepest mid-level hike at nearly 24 percent.
Prof M Shamsul Alam, energy adviser to the Consumers Association of Bangladesh, said distributors lack authority to propose slab changes.
“PDB may propose tariff adjustments, but it cannot dictate how deficits should be recovered,” he told The Daily Star yesterday.
He warned that abolishing slab benefits would hit middle-income households hardest.
“Slabs were introduced to protect poor and middle-income people. Such a proposal should be treated as an instigation to manipulate the regulator’s judgement.”
PASSING THE ‘LOSSES’
Among the distributors, Dhaka Power Distribution Company (DPDC) and Dhaka Electric Supply Company (DESCO) proposed the highest retail hikes, while the Rural Electrification Board (REB) sought the lowest.
Most cited rising salaries, maintenance, office expenses, and the devaluation of the taka in ongoing projects.
PDB, which also distributes in Chattogram, Cumilla, Mymensingh, and Sylhet, said a 17 percent wholesale hike would raise distribution costs by 14.2 percent, while a 21 percent hike would raise costs by 17.76 percent.
DPDC reported Tk 1,083 crore deficit in FY23–FY25, and projects Tk 329 crore deficit in FY26 and Tk 441 crore in FY27 if tariffs remain unchanged.
It argues a 20 percent wholesale hike requires a 24.55 percent retail increase.
DESCO reported Tk 2,611 crore deficit in FY23–FY25, and projects Tk 821 crore more in FY26 under current tariffs.
REB, serving 77 percent of consumers, lost Tk 1,698 crore in FY25. It projects Tk 2,897 crore deficit in FY26 even without wholesale hikes.
Half its residential users are lifeline consumers paying Tk 4.63 per unit.
The agency said low consumption density in rural areas and subsidised lifeline consumers were major reasons behind Tk 3,300 crore annual losses.
NESCO, serving Rajshahi and Rangpur, also reports nearly half its residential users are lifeline consumers, which reduces its revenue.
WZPDC, serving Khulna, Barishal, and parts of Dhaka, proposed hikes of 8 percent for lifeline and 12.25 percent for other users. It reported Tk 514 crore losses in FY23–FY25.
Power Grid Bangladesh PLC reported Tk 1,280 crore cumulative losses in FY23–FY25. It said there was “no other option” but to increase wheeling charges to cover the losses.
Prof Shamsul criticised distributors for trying to make the consumers bear the costs of the companies’ “unrealistic expenditure”.
He said the distributors should explain how they made profits over the last 10 to 15 years by charging higher than necessary.
“Without holding them accountable, unrealistic expenditures in the name of development activities are going to be put on consumers’ shoulders,” he said.
“They were supposed to get all sorts of development activities approved by the regulator, but they never followed the process,” he added.
