Amidst the crippling electricity crisis came the announcement of a change in the bulk electricity tariff, likely to be on an upward trajectory, from the Bangladesh Energy Regulatory Commission on Tuesday.

In a notice uploaded to its website the BERC said that its decision on bulk power tariff change would be announced in a virtual press briefing at 11:30pm on Thursday.

The tariff is likely to increase by 20 per cent, according to media reports over the past few weeks citing unnamed BERC sources.

The BERC decision on bulk power tariff change comes on the heels of a public hearing held on May 18 on a proposal of the Bangladesh Power Development Board.

The BERC is legally obligated to announce a decision in 90 days of a public hearing on tariff change which will expire on October 14.

The bulk electricity tariff will eventually lead to retail power price hike as retailers are expected to ask for a hike in their price after the bulk price of electricity is increased.

Sources at the Power Development Board, the single buyer of electricity, said that they already instructed power distributors to prepare for raising retail power price hike.

An increase in electricity price is likely to have repercussions for people are already outraged by frequent power cuts, up to six hours even in Dhaka, and high prices of essentials.

The prices of essentials went up in phases over the past one years, the latest increase as a result of a rise in fuel price by up to 50 per cent.

The latest public hearing saw the BERC technical committee recommending a 58 per cent increase in bulk electricity price against the PDB’s proposal for increasing it by 66 per cent.

Consumer rights groups, including the Consumers Association of Bangladesh, called the bulk power hike proposal illogical, advising the PDB to cancel capacity charge and check irregularities, corruption and system loss to make up for its financial losses.

The last time the BERC increased the average retail price of electricity was in February 2020 by 5.3 per cent.

The electricity price was increased 98 per cent in 10 phases in 11 years since the incumbent AL-led government assumed power in 2009.

The payment of capacity charge, which is paid to power plants whether or not they produce power so that their investors make profit anyway, was a major reason for causing frequent power price hike, energy experts said.

Last year, the capacity charge rose to almost Tk 20,000 crore, which is expected to inflate further this year.

The PDB paid Tk 72,567 crore as capacity charge to idle power plants between 2010-11 and 2020-21, according to a report of Bangladesh Working Group on External Debt.

The PDB incurred a loss of Tk 76,115 crore over the same period, the BWGED report revealed, prompting the government to loan Tk 69,111 crore to the PDB.

The PDB has already been economically strained when energy prices in the international market skyrocketed in the aftermath of the Covid pandemic and the war between Russia and Ukraine.

The power sector economic burden turned out to be so severe that the government could no longer buy energy in the international market as much as it needed for running its power plants.

About 70 per cent of its power plants remained fully or partially out of operation lately despite a nagging power crisis affecting life and business because of lack of energy supply.

The government rolled out rolling power cuts in July and austerity measures to reduce its power and energy sector expenses.

On Monday, Bangladesh with installed capacity of over 25,000MW could produce 12,416MW against a demand of 13,358MW.

The government initially promised energy and power crisis to end by October but on Monday the state minister for power, energy and mineral resources said that the situation was unlikely to improve before November.

Energy experts, however, believe that the crisis is to stay for a while likely through the next year unless the government taps own energy resources such as gas reserve and invest in renewable energy.