The Bangladesh Energy Regulatory Commission (BERC) has made it mandatory for the power division to obtain approval before constructing any new projects in the power sector, despite this requirement already being in place under existing laws.
Previously, the power division bypassed this rule, leading to the establishment of several unnecessary power projects under political influence during the previous Awami League government.
These projects often lacked a reliable fuel supply, yet the government had to pay billions in capacity charges even when the plants remained idle, creating a significant financial burden.
In response, BERC recently issued a letter to the power division emphasizing the need for prior approval before setting up new plants.
BERC Chairman Jalal Ahmed stated that the commission is now taking a more proactive role. He noted that while BERC traditionally focused on setting wholesale and retail electricity tariffs, the law grants it authority to approve power plant contracts before implementation. He questioned why previous commissions had not enforced this requirement and asserted that such approvals must now be obtained.
According to BERC officials, the commission was established to protect consumers in the power and energy sector. However, since its formation, it has remained under political influence. Despite legal provisions, successive governments disregarded BERC’s authority, leading to unchecked power plant construction driven by political considerations.
Many of these projects faced allegations of excessive construction costs, prompting the current interim government to investigate irregularities.
In January 2023, the Bangladesh Energy Regulatory Commission (Amendment) Ordinance 2022 was published in the official gazette, curtailing BERC’s authority. The ruling Awami League government at the time transferred the power to adjust electricity and gas prices to the executive branch, allowing price changes through direct orders without public hearings. This led to frequent price hikes, despite strong opposition from energy experts and consumers.
Following the downfall of the Awami League government in August last year due to mass protests, the Ministry of Law, Justice, and Parliamentary Affairs issued a gazette notification on August 27, repealing Section 34(a) of the law, which had allowed the government to set energy prices by executive order. With this amendment, BERC regained its authority, and electricity and gas tariffs will once again be determined through public hearings. The revised law is now titled the “Bangladesh Energy Regulatory Commission (Amendment) Ordinance-2024.”
During the Awami League’s tenure from January 2009 to June 2023, 152 new power plants were established, including controversial rental and quick-rental plants.
BERC, originally formed through legislation in 2003, began its official operations in 2008. Since then, it has adjusted electricity prices nine times at the wholesale level, ten times at the retail level, and twice for transmission costs. Similarly, gas prices were first adjusted in 2009 and have been increased nine times since. Currently, a proposal for raising gas prices for new industries is awaiting a public hearing.
Another key function of BERC is dispute resolution. Since its inception, the commission has received 677 complaints, of which 544 (80%) have been resolved. Additionally, out of 239 consumer complaints, 232 (97.07%) have been addressed.
