Gov­ern­ment in­creases power tar­iff from new year

Business Bhutan - - Front Page - Dechen Dolkar from Thim­phu

The gov­ern­ment has a somber New Year gift for the na­tion as the re­vised and higher elec­tric­ity tar­iff be­comes ef­fec­tive with the change of the cal­en­dar.

The cabi­net has ap­proved the re­vised do­mes­tic power tar­iff for all cat­e­gories of power users who are clas­si­fied as High Volt­age (HV), Medium Volt­age (MV) and Low Volt­age (LV) con­sumers.

The tar­iff re­vi­sion will be ef­fec­tive from Jan­uary 2017 and would in­crease every year for the next three years till June 2019.

Most of the or­di­nary peo­ple would fall un­der the LV cat­e­gory, which is fur­ther bro­ken down into five sub cat­e­gories ac­cord­ing to power con­sump­tion.

With the new tar­iff, those con­sum­ing lower

than 100 kWh would con­tinue to en­joy free sub­si­dized power. This ser­vice is for peo­ple liv­ing in ru­ral ar­eas. This cat­e­gory con­sumes 3% of the to­tal en­ergy con­sump­tion.

Those con­sum­ing be­low 100 kWh and not liv­ing in ru­ral ar­eas would not ex­pe­ri­ence a re­vi­sion and would pay Nu 1.28 per kWh. This group con­sumes 2% of the to­tal en­ergy con­sump­tion.

Most or­di­nary con­sumers would fall in the next three LV cat­e­gories of those con­sum­ing be­tween 100 and 300 kWh; more than 300kWh; and LV bulk.

For those in the 100300kWh, the ex­ist­ing rate of Nu 2.45 kWh would in­crease to Nu 2.52 kWh in the first year. It would in­crease to Nu 2.60 kWh in the se­cond year and fi­nally to Nu 2.68 kWh by 2019. This cat­e­gory con­sumes 3% of the to­tal power con­sump­tion.

For the group con­sum­ing more than 300kWh, the ex­ist­ing tar­iff of Nu 3.23 kWh will in­crease to Nu 3.33 kWh in the first year, to Nu 2.43 kWh and fi­nally to 3.53 in the third year.

For the LV bulk, the ex­ist­ing tar­iff of Nu 3.68 kWh will in­crease to Nu 3.79 kWh in the first year, to Nu 3.90 kWh in the se­cond year and fi­nally to Nu 4.02 kWh. This cat­e­gory con­sumes 4% of the to­tal en­ergy con­sump­tion. The con­sumers of LV bulk are in­sti­tu­tions.

The tar­iff in­crease for the LV con­sumers av­er­ages to 3% in­crease every year for the next three years.

For the MV con­sumers, the tar­iff is di­vided into en­ergy charge and de­mand charge and both charges would also in­crease an­nu­ally for three times till 2019.

Sim­i­larly, the tar­iff for HV con­sumers would also in­crease an­nu­ally for three times till 2019.

Hy­dropower plants gen­er­ate elec­tric­ity in Bhutan and it is then sold to the Bhutan Power Cor­po­ra­tion (BPC), which in turn sup­plies power to con­sumers for a tar­iff. The Bhutan Elec­tric­ity Au­thor­ity (BEA) reg­u­lates the rates at which hy­dropower plants sell to the BPC.

The BEA has also ap­proved new and higher rates for the DGPC to sell power to the BPC, which will be­come ef­fec­tive from the New Year. The new rates will be Nu 1.59kWh.

The Di­rec­tor Gen­eral of Depart­ment of Hy­dropower and Power Sys­tems, Sonam P. Wangdi, that the rate of in­crease of the new tar­iff is much lower than the pre­vi­ous in­creases.

The Di­rec­tor Gen­eral also high­lighted that the in­crease in the tar­iff is also ac­com­pa­nied by the gov­ern­ment in­creas­ing power sub­sidy for all LV and MV con­sumers.

The gov­ern­ment will spend Nu 1.772bn an­nu­ally in sub­sidy in the next three years for LV and MV con­sumers as com­pared to Nu 1.45bn it spent an­nu­ally in the past three years. Of the to­tal sub­sidy, 89% amount­ing to Nu 1.58bn would be al­lo­cated to LV con­sumers and the re­main­ing 11% amount­ing to Nu 0.19bn would al­lo­cated to MV con­sumers.

Fore­casts show that the coun­try will con­sume around 2,188 mil­lion units an­nu­ally for the next years.

In ac­cor­dance with the tar­iff de­ter­mi­na­tion reg­u­la­tion, BPC and DGPC sub­mit­ted the do­mes­tic and sup­ply tar­iff proposal for next three years to BEA in April this year.

His Majesty at one of the de­silt­ing cham­bers of the 720 MW Mangdechu Hy­dro­elec­tric Project in Trongsa

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