The Policy for Enhancement of Private Participation- 2008, allows private entrepreneurs to sell electricity directly to industries and consumers at a negotiated price between the parties while the state-run agencies can purchase a certain portion of the electricity of the plant at a price set by Bangladesh Energy Regulatory Commission (BERC)
BERC drafted an indicative price for electricity of the private commercial power plants which apparently would favour the private entrepreneurs when the state-run agencies purchase electricity from the plants.
The BERC has drafted different prices for different electricity generation plants such as fuel-based , gas and coal run commercial power plants based on the ‘international standard project cost’, power project costs of the conventional and rental power plants of the Power Development Board and a set of parameters.
According to the BERC an indicative price of Tk 7.55 per unit for furnace oil run plant, Tk 4.51 for imported coal based plants that will be installed in coastal areas, Tk 4.97 for imported coal plant that will be installed in inner parts of the country and Tk 4.09 for coal mine-mouth pants. For dual-fuel plants, the price has been set at Tk 2.83 for the electricity that will be generated by using gas and Tk 7.60 for furnace oil-based power.
Consumer Association of Bangladesh (CAB) —the consumer rights group—however, opposed the draft indicative price at a discussion meeting arranged by BERC on Monday.
According to them, if any government agency wants to purchase electricity from commercial plants, the price of electricity should be fixed ‘case to case’ basis considering the price of fuel and generation cost of electricity after holding public hearing.
According to them most of the parameters and standards set by BERC to fix price were vague and significantly inflated and would benefit the private entrepreneurs, resulting in high prices of electricity for the consumers.
Such as ‘heat rate’ for producing power, bank interest rate and rate of return were shown at higher rates.
The commission officials, however, admitted that they would review the recommendations.
The BERC would send the proposal of finalising indicative price to the relevant ministry within next week.
The indicative pricing would encourage entrepreneurs to come forward with investment in the power sector.
He said that indicative price has been prepared, considering the interests of all stake-holders including the consumers.
The consumers association however, opposed the proposal saying that it would preserve the interest of some groups of people rather than the interest of consumers.