If the proposal is accepted in its present form, expect bills to almost double
With the previous three-year revision cycle coming to an end on June 30 the Bhutan Power Corporation has submitted its proposal to revise domestic tariff for the next three years.
According to the proposal, submitted to the Bhutan Electricity Authority for scrutiny, and which must go through public consultations before it is finalised, monthly electricity bills in urban areas could double for domestic consumers.
In the proposal BPC, the lone power distributing company in the country, has proposed a two-tier tariff to replace the existing three-tier one.
For the second block where consumption is more than 100kWh the proposed rate is Nu 4.1 a unit.
For a rural household with a boiler, rice cooker, a few tube lights and bulbs, the monthly consumption would not cross 100 kWh a month a BPC official said. But most urban homes with a geyser, heaters, washing machines and other appliances would fall under the second proposed category, where the rate is Nu 4.1 for a unit (kWh).
A household in Thimphu that paid a bill of Nu 486 for consuming 336 units in the month of April could be paying close to Nu 1,000, according to the proposed revision. This could become Nu 3,000 in winter, when the heaters are turned on.
For low bulk consumers, like government ministry offices, hospitals, academic institutions and the army, BPC has proposed the same rate of Nu 4.1 a unit from the earlier Nu 2.14 a unit.
For medium voltage (MV) consumers, such as medium scale industries, like diary plants, the proposal drastically increases demand charge from present Nu 115 per kVA (kilovolt ampere) a month to Nu 856/kVA a month. However, charge for energy consumed is to be decreased from Nu 1.79kWh a month to Nu 1.20kWh a month. Demand charge refers to charge industries pay to book a certain quantity of power for their use at all times.
Likewise for high voltage (HV) consumers such as ferro silicon factories in Pasakha, demand charge is to be increased from Nu 105/kVA a month to Nu 441/kVA a month, while energy charge is reduced to Nu 1.20 kWh a month from Nu 1.54 charged at present.
With regard to the medium and high voltage users, a BPC official explained that the proposal to increase demand charges was mainly to prevent hoarding of power by certain industries that do not use the power they book.
On an average the proposed revised tariff works out to Nu 2.40 a unit for high voltage users, Nu 4.29 a unit for medium voltage consumers, and Nu 3.29 a unit for low voltage or domestic consumers.
The proposed rates are still a subsidised rate because it is still below the actual cost of supply BPC officials said.
BPC’s tariff officer Sonam Phuntsho said BPC can only propose but had no authority to determine the rates.
The revision proposal does not account for the revised rates the Druk Green Power Corporation (DGPC) is proposing on the sale of power to BPC for the next three years.
DGPC has proposed to sell power to BPC at Nu 1.99 a unit from the existing Nu 1.2 a unit, which has been in place since 2007 so as to reflect actual cost of generation and give it satisfactory return on investments. In 2010 DGPC had made the same proposal but it was kept at Nu 1.2 a unit.
This is for sale of energy beyond the 15 percent of total generation or royalty energy, which is currently being sold at Nu 0.13 a unit to BPCL to meet domestic energy needs as a subsidy.
BPC managing director, Dasho Bharat Tamang, said their proposal reflects and shows transparency of energy generation price, transmission, distribution, and supply charges in the supply chain of electricity supply industry to customers.
By Passang Norbu