Although the power tariffs were raised by 6.96 percent at the retail level to offset revenue loss, yet the government may have to provide subsidy of about Tk 6,000 crore in the current fiscal.
According to official sources, the total loss of the government, including in retail and bulk power business, was estimated to be 8000 crore in the current fiscal. Of this, the loss in retail power sale which is known as distribution was about Tk 2000 crore while remaining Tk 6000 crore loss is in bulk power sale or in the generation segment.
This time, all the five distribution companies appealed to the Bangladesh Energy Regulatory Commission (BERC) seeking tariff hike at different rates considering their own position.Among the five distribution companies, the Power Development Board (PDB) sought 15.50 percent hike while DPDC 23.50 percent, Desco 15.90 percent, REB 12.58 percent and WZPDC 8.59 percent hike.
Sources said the PDB, which is solely responsible for power generation, also has distribution business and still it holds 25-27 percent of the total power distribution business.
However, in the power distribution business, Rural Electrification Board (REB) has been the largest entity holding 35 percent market share, while Dhaka Power Distribution Company (DPDC) holds a share of 19-20 percent, Dhaka Electric Supply Company (Desco) 12 percent, and West Zone Power Distribution Company (WZPDC) holds only 5 percent of the business.
PDB officials said after the new hike in retail tariff, the organisation will get Tk 175 crore in next three months of the fiscal year 2013-14 to cover its annual retail business loss of more than Tk 500 crore.
“But, the latest tariff hike will not play any role in offsetting the loss in bulk power sale,” PDB Chief Engineer (system planning) Mizanur Rahman told UNB.
He said the annual loss in bulk business might be about Tk 600 crore in the current fiscal if the bulk rate is not raised further.
Officials said the PDB has to incur its main loss in buying electricity of about 2,200 MW from rental and quick rental power plants which average production cost is about Tk 18 per unit.
But, the PDB has to sell electricity to distribution companies on average Tk 6 per unit incurring a loss of Tk 1.30 per unit.
Desco Director Shah Alam said his organisation will earn Tk 175 crore after the latest tariff hike. “But despite the hike, still it may have to incur a huge loss for the last 9 months,” he said.
PDB officials said the current fall in the government’s revenue income by Tk 12,000 crore may put a pressure on the organisation to further move for raising bulk power tariff in near future.
“Because, under the current situation, there might be an uncertainty in getting a major subsidy of Tk 6000 crore for power sector,” said a top official of the PDB. – UNB
