The issue that has been at the centre of discussions on electricity in recent weeks is the proposal of the Dhaka Power Distribution Company Limited (DPDC) to increase its price. The proposal was placed before the Bangladesh Energy Regulatory Commission (BERC) for public hearing on September 28.
DPDC was incorporated as a part of the Power Division under the Ministry of Power, Energy and Mineral Resources for development and reforms of the power sector. It is responsible for distribution of electricity to the customers of the Dhaka city. It was registered as a company on October 25, 2005 under the Companies Act, 1994 and went into commercial operation on July 01, 2008. The government owns its 100 per cent shares. DPDC took over responsibilities from Dhaka Electricity Supply Authority (DESA).
DPDC has proposed for a rise in electricity price at retail level by 6.24 per cent. Proposals were also made to raise demand and service charges. DPDC stated in its proposal that it has been incurring a loss of Tk 0.43 per unit of electricity due to the difference between sale and purchase prices of electricity. DPDC has calculated the loss per unit of electricity on the basis of its overall costing per unit -Tk 7.75, cost of purchase from the Bangladesh Power Development Board (BPDB) and distribution expenses, and selling to the consumers at Tk 7.32. DPDC has calculated total loss in financial year 2016-17 at Tk 3.5 billion. It proposed a price hike of 5.99 per cent for residential subscribers. The suggested raise included an increase in service charge by Tk 20 for a one-phase connection instead of Tk 10 at present, and Tk 50 instead of Tk 30 for a three-phase connection. Besides, demand charge should be increased to Tk 25 instead of Tk 15. DPDC also proposed an increased service charge for other types of subscribers. DPDC has been distributing electricity among 986,176 customers in Dhaka South City Corporation (DSCC) and Narayanganj areas. Of them, 88.41 per cent subscribers have residential connections. In consideration of all these, BERC proposed to raise electricity price by 0.15 Taka per unit.
The Consumers Association of Bangladesh (CAB) has expressed its concern about the price rise of electricity at consumer level. CAB holds mismanagement and policy error of the regulating authorities for the proposed price hike. Moreover, it has also been complained by the subscribers that the DPDC is asking for high deposit work rates from the subscribers, which is unfavourable for economic growth in Bangladesh. The price hike has already affected the foreign and local entrepreneurs who started losing their interest to apply for power connection from DPDC for establishment and enhancement of industries. DPDC has allegedly started an illegal and unjustifiable policy practice to demand land free of cost to the subscribers as they apply for new power connections.
DPDC charges it subscribers for material cost, installation charge, store charge (which is 20 per cent of the material cost), supervision charge (20 per cent of the total deposition work cost), other related costs (10 per cent of the total deposition work cost) and VAT plus IT charges (10 per cent of the total deposition work cost) and the subscribers have been complaining of overcharging them on this account (almost double or sometimes triple of the actual cost).
BERC has been holding public hearings since 2008 and a mass hearing is scheduled to take place for the first time today, October 05, 2017 with a proposal to reduce the price of electricity by Tk 1.26 per unit.
DPDC may consider the following suggestions:
- exempt the provision of demanding land for installing power connection;
- adjusting the material cost under deposition work considering the market value of the materials;
- fixing a time limit for connection to be provided.
Saleh Ahmed is a freelance journalist and Tasmiah Nuhiya Ahmed is an Advocate, Supreme Court of Bangladesh. [email protected] [email protected]
