Government increases power tariff from new year
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