The Bangladesh Energy Regulatory Commission (BERC) will start a two-day public hearing on Wednesday over proposals to increase electricity prices at wholesale and consumer levels amid mounting losses in the power sector.
The hearing will start at 10:00am at the KIB auditorium in Farmgate, Dhaka. On the opening day, the commission will hear proposals to raise wholesale electricity tariffs and transmission charges.
The Bangladesh Power Development Board (BPDB) has proposed increasing the wholesale electricity tariff by Tk 1.20 to Tk 1.50 per unit, equivalent to a hike of 17 to 21 percent.
According to BPDB projections, the country’s electricity generation cost in fiscal year 2026-27 may reach Tk 143,108 crore, with the average generation cost standing at around Tk 12.91 per unit.
At the existing wholesale tariff, projected revenue would be Tk 77,553 crore, leaving a deficit of nearly Tk 65,555 crore.
BPDB said a Tk 1.20 per unit increase would reduce the deficit by Tk 1,329 crore, while a Tk 1.50 hike would lower the shortfall by Tk 1,666 crore.
The last electricity price increase came through an executive order on February 29, 2024, when the average wholesale tariff was raised from Tk 6.70 to Tk 7.04 per unit.
BPDB, however, claims the effective average selling price currently stands at Tk 6.99 due to variations in company-wise sales.
Power sector data show that the average electricity generation cost has risen sharply over the past few years — from Tk 2.13 per unit in FY2020 to nearly Tk 13 at present. Authorities have attributed the increase to higher fuel prices and the depreciation of the taka against the US dollar.
However, critics have blamed corruption, weak governance, uneven contracts and policy mismanagement for the soaring costs.
The country’s sole power transmission company, Power Grid Bangladesh PLC (PGCB), has proposed raising transmission charges from 30-31 paisa per unit to 48-49 paisa.
Electricity distribution utilities and companies have also sought retail tariff increases, claiming they are incurring losses under the current pricing structure.
Dhaka Electric Supply Company PLC (DESCO) has proposed a 9.67 percent increase, while Dhaka Power Distribution Company (DPDC) sought a 6.96 percent hike.
West Zone Power Distribution Company (WZPDCL) proposed a 10 percent increase, and the Bangladesh Rural Electrification Board (REB) requested a 5.93 percent rise.
Meanwhile, Northern Electricity Supply PLC (NESCO) proposed an increase of 3 paisa per unit and BPDB sought an additional 29 paisa at the retail level.
The distribution companies also requested that any increase in wholesale tariffs and transmission charges be automatically adjusted in retail electricity prices.
DESCO said wholesale electricity prices rose by 36.98 percent between December 2022 and February 2024, while retail tariffs increased by only 25.02 percent during the same period.
The company claimed losses of Tk 1,062 crore in FY2022-23, followed by projected losses of Tk 952 crore and Tk 596 crore in the next two fiscal years.
DPDC said it incurred losses of Tk 643 crore in FY2022-23, Tk 302 crore the following year and Tk 136 crore in FY2024-25 because retail tariffs did not rise in line with wholesale costs.
REB said its 80 rural electricity cooperatives recorded a combined net loss of Tk 1,698 crore in FY2024-25 and warned that losses could rise to Tk 2,897 crore this fiscal year without a tariff adjustment.
According to the current power generation mix, Bangladesh has 50 gas-fired power plants with a combined capacity of 12,194 megawatts, accounting for 43 percent of total generation capacity.
Furnace oil-based plants account for 19 percent, coal-fired plants 22 percent, imported electricity 9 percent, while solar and wind contribute around 3 percent.
On the second day of the hearing, May 21, BERC will hear proposals from distribution companies seeking increases in retail electricity tariffs for consumers.