People should not have to pay for the authorities’ inefficiency, failures, and system losses, consumers said at a hearing on the Power Development Board’s tariff hike proposal yesterday.
They also called for hearings on how electricity prices could be reduced by cutting what they described as irrational power-sector expenditures.
The Bangladesh Power Development Board has proposed raising wholesale electricity tariffs by 17 to 21 percent -- Tk 1.2 to Tk 1.5 per unit, citing higher fuel costs, exchange-rate pressures, and rising subsidy needs.
According to an assessment by the Technical Evaluation Committee (TEC) of the Bangladesh Energy Regulatory Commission, without government subsidies, the wholesale tariff would need to rise to Tk 12.55 per kilowatt-hour (kWh) from Tk 7.04.
The TEC based its calculation on the PDB’s projected FY 2025-26 expenditure, a large chunk of it is due to capacity payments that must be made regardless of electricity production.
TEC findings show gas-based plants are operating at around 40 percent of installed capacity, coal-based plants at 61 percent, and plants abroad at 77 percent.
Respondents at the hearing said these payments, along with fuel costs and system inefficiencies, are ultimately passed on to consumers through tariffs.
The PDB projected costs could rise to Tk 13.09 per kWh this year. It said average generation cost stood at Tk 11.04 in FY23, Tk 10.96 in FY24, and Tk 11.83 in FY25.
“As per our proposal, we may be able to adjust only one-fifth to one-fourth of the fiscal deficit. We did not seek a break-even tariff adjustment. The government will still have to provide significant subsidies for power generation,” PDB Chairman Md Rezaul Karim said at the hearing.
In a written statement, AHM Shafiquzzaman, president of the Consumers Association of Bangladesh (CAB), said, “Inefficiency, system loss, delayed projects, excessive and exploitative expenditures, and capacity charges should not be imposed on ordinary consumers.”
Former general secretary of the Communist Party of Bangladesh, Ruhin Hossain Prince, said, “We are ready to come with evidence and prove that electricity tariffs can actually be lowered. If we fail, we will accept the decision [to raise tariffs].”
Prince also said neither the PDB nor the TEC consulted economists to assess the impact of higher electricity prices on consumers and the broader economy.
Md Jamal Uddin Miah, director of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), described the proposed hike as “a blow to an already dying industry”.
“Earlier, we were the second-largest apparel exporter after China, but our position is slipping. Any increase in electricity prices could push us further out of competition,” he said.
Prof Syed Mizanur Rahman, associate dean at Daffodil International University, questioned the argument that higher electricity prices are needed to reduce government subsidies.
“Where does the government get the subsidy from? Ultimately, it comes from consumers’ money,” he said. “Everyone talks about protecting government finances, but no one seems concerned that people are struggling to survive.”
He warned that if the commission sided with those making “unlawful proposals” instead of standing with the people, it could eventually become “an enemy of the people”.
Bangladesh Energy Regulatory Commission Chairman Jalal Ahmed said he agreed with CAB’s observations that excess capacity charges, inefficient generation costs, and system losses should not be imposed on ordinary consumers.
“If quality electricity could be supplied consistently, industries would not need captive power plants … Those plants consume gas far less efficiently. If the same gas were supplied to grid-based plants, it would be used more efficiently,” he said.
In the afternoon, a separate hearing was held on a proposal by Power Grid Bangladesh PLC to raise transmission charges to Tk 0.4955 per kWh from Tk 0.3096 per kWh.
The company reported cumulative losses of Tk 1,280 crore between FY23 and FY25.
BERC’s technical committee estimated that Power Grid’s expenditure requirement for FY25 would be Tk 0.4481 per kWh.
