Just one day after announcing an increase in retail electricity tariffs, the Bangladesh Energy Regulatory Commission (BERC) has withdrawn the additional tariff for lifeline and first-tier residential consumers following a request for reconsideration from the Power Division.
Within hours of the division’s appeal, the commission issued a new order on Thursday reinstating the previous tariff rates.
According to the new order, the revised increased tariffs for residential lifeline (0-50 units) and residential first-tier (0-75 units) consumers0 – set on Wednesday – will not be implemented. Instead, the previous rates of Tk4.63 per unit for lifeline consumers and Tk5.26 per unit for first-tier consumers will remain in effect.
On Wednesday, BERC had issued an order increasing retail electricity tariffs by an average of 16.69 per cent, raising the price for lifeline consumers to Tk5.32 per unit and for first-tier consumers to Tk6.18 per unit. The new rates were scheduled to take effect from June bills.
On Thursday afternoon, the Power Division said in a press release that BERC’s revised tariff did not reflect the proposal sent by the Bangladesh Power Development Board (PDB) concerning marginal consumers, warning that the hike would significantly increase electricity costs for low-income and lower-middle-income families.
The current government has taken various steps to improve living standards of the low-income population, the division stated, adding that the revised tariff for lifeline consumers was not consistent with government policy. The Power Division requested BERC to reconsider the tariff in light of PDB’s 3 May proposal.
Within hours, BERC announced that the matter had been reconsidered following applications from PDB, the Bangladesh Rural Electrification Board, DPDC, DESCO, WZPDCL, and Northern Electricity Supply PLC.
The commission said the cancellation of the increased tariff for lifeline and first-tier consumers would reduce distribution companies’ potential revenue, and the government will have to adjust the shortfall through additional subsidies.
BERC added that the decision would reduce the weighted average retail electricity rate announced on Wednesday from Tk10.63 to Tk10.40 per unit, a decrease of 23 paisa.
The commission’s change of position within one day of the announcement has added a new dimension to the recent price adjustment process in the power sector.
