Fund to make cheap electricity diverted to prepaid metres

Manjurul Ahsan

The government is planning to set up pre-paid electric metres through the Electricity Development and Maintenance Fund, violating the guideline for the use of the fund.
The fund was set up in 2011 to increase low-cost generation capacity of the state-run Power Development Board.
PDB, asked by the power and energy ministry, is now preparing to float tenders for procurement of 900,000 units of pre-paid electric metres for its six power distribution areas — Rajshahi, Rangpur, Mymensingh, Sylhet, Comilla and Chittagong, officials confirmed.
It is a part of a large project to set up 4.3 million units of prepaid electric metres worth Tk 4,592 crore in PDB’s power distribution areas by 2018. The government is considering the fund as a source of money in implementing the large project, said officials.
In 2011, the Bangladesh Energy Regulatory Commission, through a public hearing, created the fund using the money accumulated through a 7.66 per cent hike in bulk price of electricity, with an objective to increase PDB’s capacity in increasing the low-cost power generation capacity.
The energy commission created the fund at a time when PDB, the largest producer and purchaser of electricity, was becoming increasingly dependent on the expensive liquid fuel-based power plants, mainly installed in the private sector.
The energy commission doubled the bulk price of electricity between February 2011 and September 2012 and also increased the retail prices by 64 per cent between March 2010 and March 2014. In contrast, the commission had failed to take any constructive steps to produce low-cost electricity during the time period.
The fund has so far grown to about Tk 4,500 crore till the financial year 2014-15.
The PDB is entitled to use the fund in implementing projects related to installation of new and efficient gas-fired power plants replacing the old ones, quick generation of electricity at low cost, and to balance, maintain, modernise, rehabilitate and expand old power plants, commonly known as BMRE, according to the regulatory guideline prepared by the energy commission for
utilising the money in the fund.
Shamsul Alam, energy adviser to the Consumer Association of Bangladesh, told New Age that the move was in violation of the mandate for creation of the fund.
Consumers, at a public hearing, accepted the hike in price of bulk electricity on the ground that PDB would increase its capacity to generate low-cost electricity, which would help in reducing the price of electricity in the long-run, he said.
Shamsul also said that such decision would give a message to the people that the government did not pay respect to public opinion.
PDB officials refused to comment on whether the authorities had mandate to utilise the fund in purchase and installation of prepaid electric metres.
PDB first took up a project to set up a 300-450 MW combined cycle power plant that would run on natural gas at Bibiyana in Sylhet. The project is being implemented using the money of the Electricity Development and Maintenance Fund.
A PDB letter dated July 7 sought approval from the power division for floating tenders for procurement of 900,000 units of prepaid metres as ‘the prime minister, Sheikh Hasina, who also holds the portfolio of power and energy ministry, and the junior minister Nasrul Hamid, have pressed PDB to take up the project using the fund.’

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