PDB mulls 50pc hike in power price

Manjurul Ahsan

The Power Development Board on Wednesday proposed to raise the bulk rate of electricity by 50 per cent which would affect retail consumers significantly, officials said.

The proposal was submitted to the Energy Regulatory Commission the day before the finance minister AMA Muhith placed his budget proposals for next fiscal suggesting power price hike to offset subsidy in the expensive fuel-oil run power plants.

According to the proposal, the power board, the country’s lone electricity buyer from the generation agencies both in public and private sectors, wanted to sell electricity to the distribution agencies at an increased price of Tk 6.0 a kilowatt-hour on an average from Tk 4.02 a unit.

Power board chairman ASM Alamgir Kabir told New Age that the government would have to count about Tk 3,000 crore in subsidy even after the energy commission increases the price in response to the board’s proposal.

PDB estimated that its expenditure in power purchase would shot up to Tk 6.87 a unit in the fiscal 2012-13, as the board planned to increase power purchase by 20.23 per cent from the fuel-oil run plants to keep power supply situation at a tolerable level, a power board official said.

He said that the power board had spent around Tk 5.5 for a unit on an average in the outgoing fiscal against an estimated expenditure of Tk 6.0 a unit.
The power board cut the expenditure by reducing electricity purchase from fuel-oil run plants, rental plants in particular, which resulted in frequent load shedding, he said.

The finance minister in his budget speech held the slow implementation of low-cost regular power plant projects for frequent outages which would also make the power board more dependent on the expensive power to cope with the growing demand, the official said.

The energy commission in five phases since February 2011 increased the bulk power prices by 69.6 per cent on an average – from Tk 2.37 a unit to Tk 4.02 a unit and at the same time the retail price by 27.50 per cent on an average – from Tk 4.0 a unit to Tk 5.10 a unit.

The power board’s expenditure for electricity purchase has increased in the wake of a sudden drop in power generation by the low-cost plants in the public sector and increased power purchase from private sector plants, particularly from fuel-oil run rental plants, since 2010.

As per a PDB projection, the board would be able to increase gas-based electricity generation by nearly 18 per cent in the coming fiscal.

According to the latest assessment, power board buys electricity from the fuel-oil run rental plants at Tk 16.0 a unit while the public sector gas-fired plants produce electricity at less than Tk 2.0 a unit.

PDB chairman Alamgir Kabir said that PDB’s expenditure in power purchase would reduce significantly if the prices of furnace oil and diesel in the international market come down.

Experts, however, said that the oil price in the international market would not drop significantly as there was an increasing demand for fuel oil.

Source: New Age BD

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