To­wards much eco­nomic growth

Bhutan Times - - Editorial -

The new elec­tric­ity tar­iff for the pe­riod of three years from 1 Jan­uary 2017 to 30 June 2019 has come into ef­fect from this month.

The ap­proved to­tal cost by Bhutan Elec­tric­ity Author­ity ( BEA) for Druk Green Power Cor­po­ra­tion ( DGPC) gen­er­a­tion cost and Bhutan Power Cor­po­ra­tion ( BPC)‘ s cost of sup­ply is 2.23 Nu/ kWh for high volt­age ( HV), 5.38 Nu/ kWh for medium volt­age ( MV), 5.81 Nu/ kWh for low volt­age ( LV) and 0.195 for wheel­ing.

How­ever, the an­nual tar­iff for LV of Block I ( ru­ral) 0- 100kWh and Block I ( other) 0- 100kWh will re­main the same.

Block II ( all) 101- 300 kWh, Block III ( all) above 300kWh and LV bulk will have an an­nual in­crease of three per­cent from the ex­ist­ing tar­iff, while MV will ex­pe­ri­ence an in­crease of 6.50 per­cent an­nu­ally.

The gov­ern­ment has ap­proved the sub­sidy al­lo­ca­tion of around Nu. 1,772 mil­lion per year to main­tain the an­nual tar­iff in­crease for LV and MV con­sumers.

The dif­fer­ence be­tween the gov­ern­ment sub­sidy and BEA ap­proved to­tal cost of sup­ply shall be im­posed on the peo­ple as elec­tric­ity tar­iff.

When 100 units of elec­tric­ity are free for peo­ple liv­ing in ru­ral area, the gov­ern­ment has to pay an amount of 5.81 Nu/ kWh to BPC.

Ar­ti­cle 7.15( 3) of Do­mes­tic Elec­tric­ity Tar­iff Pol­icy 2016, states that the ru­ral do­mes­tic house­holds shall be pro­vided ad­di­tional sub­sidy with ob­jec­tives to en­hance the liv­ing stand- ards, curb ru­ral to ur­ban mi­gra­tion, con­serve the en­vi­ron­ment, re­duce fos­sil fuel con­sump­tion and pro­mote in­come gen­er­at­ing ac­tiv­i­ties.

The cost com­po­nent with re­gard to the gen­er­a­tion of power will in­clude only the cost of pro­duc­tion and the ad­di­tional cost that does not re­late to the power gen­er­a­tion has been re­moved.

In the ur­ban ar­eas, peo­ple who con­sume 0- 100 units in a month will have to pay 5.81 Nu/ kWh in­stead of 1.28 Nu/ kWh if there is no in­jec­tion of sub­sidy from the gov­ern­ment.

Un­like LV and MV, HV does not have sub­sidy from the gov­ern­ment.

Ar­ti­cle 7.15( 5) of Do­mes­tic Elec­tric­ity Tar­iff Pol­icy 2016, states that high volt­age in­dus­tries shall not be el­i­gi­ble for sub­sidy.

While the ru­ral peo­ple and the low volt­age con­sumers will be happy with the re­vised tar­iff but the heavy volt­age con­sumers will face an in­crease in the de­mand charges so that the in­dus­tries do not hoard the power.

In or­der to make elec­tric­ity cheaper the gov­ern­ment has been trans­fer­ring the roy­al­ties re­ceived from the gen­er­ated elec­tric­ity as sub­si­dies to the con­sumers, un­der LV and MV cat­e­gory mak­ing elec­tric­ity cheap in or­der to en­hance the liveli­hood of our peo­ple and mak­ing elec­tric­ity af­ford­able.

Over­all the re­vi­sion of tar­iff seems sen­si­ble and prag­matic hope­fully lead to much eco­nomic growth and de­vel­op­ment of the coun­try.

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