Fresh rise in power tariff

THE government has decided to raise the power tariff apparently on advice of IMF and other donors however amidst protest from the users. The Energy Regulatory Commission (ERC) held the hearing on the proposition yesterday and decided to raise the rates by 6.66 percent for PDB customers and 7.51 percent for Western Zone Power Distribution Company (WZPDC) customers.
The hearing was in a sense a mock rehearsal in line with the government plan to increase the rates to fulfil the IMF demand to disburse existing loans. Reports said users representatives at the hearing opposed the increase on the tariff rates saying it would add to households suffering to force them cut their expenditure on other accounts such as health and education. Producers also said any rise in electricity cost would add to their production cost to make exports further competitive and edging to slowing down exports. They blamed the government for patronizing high cost rental and quick rental power plants. They said these companies are charging the government higher rates which the government is bearing in the form of subsidy from the national exchequer. But the World Bank, IMF and such other donors are asking the government to reduce the subsidies and this is why the government is periodically raising the tariff to reduce its budgetary loads in one hand and reduce the donors’ pressure on the other.
But the users are blaming the government for passing the growing load of electricity bills on them while the government is using the power sector as a political tolls on two grounds. Firstly, it has opted for quick rental plants to get electricity in the short term basis to appease the people while failing to go for setting up big power plants. Secondly, it has offered the contacts of the rental power plants to party men who are reportedly providing financial benefits to ruling party bigwigs. The nation is going to bear the brunt of the load.
As the hearing at the Energy Regulatory Commission was in progress yesterday at its Kawran Bazar office, left political parties held a human chain in front of the office to press home the demand for abandoning the plan to raise the tariff rates. But the senior officials of the Commission said the proposal to increase the rates has legitimate ground and therefore, they made the decision to increase the rates.
Earlier in September 2012, the government increased power tariff by 15 percent or Tk 5.75 per unit. It said the government is losing Tk 3,250 million per month on subsidy and it is not affordable to continue. During the previous term of the government power tariff was raised several times and it is only the people who are hostage to the government power sector politics without an end in sight to the tariff rise.
We hold the view that the government must give focus on setting up big power plants in which per unit production costs stands at quite low compared to existing rates from the rental power plants. Moreover, the government must reduce the system loss and illegal connection to save the electricity to reduce the cost which may in turn reduce the loss.