Bhutan Power Corporation Limited

The aim is to ensure equitable distribution of power and penalise those that underutilise their quota

Source: Kuensel

2 March, 2010 – The Bhutan Power corporation limited (BPCL) is planning to modify the tariff structure for industries so that they pay a higher charge for the unused electricity quota booked by them.

The tariff for industries is Nu 1.65 per unit, Nu 1.51 as the normal power charge and 0.14 cheltrums for the power booked by them, known as the energy demand charge.

“Companies pay 0.14 ch a unit for up to 75 percent of their power allocation, even if they don’t use the power, since it’s understood that factories should be using a minimum of 75 percent of their allocated power. This comes to around Nu 85,000 for every MW of unused power.

“Without increasing the tariff of 1.65, what we propose to do this year is to increase the energy demand charge 0.14 to 0.45 and decrease the normal power charge from 1.51 to 1.20,” said BPCL’s managing director, Dasho Bharat Tamang.

He said that this would ensure that companies not using their allocation would be paying more for the unused power and thus encourage them to give up their excess power to BPCL, which can then give it to industries on the waiting list.

According to Dasho Bharat Tamang, the problem right now is that many new industries are not able to come up due to a shortage of power; at the same time; many existing industries are underutilising their allocated amounts.

Of the current 243 MW allocated to 46 factories, only 53 percent was used in 2009. It was 62 percent for January 2010. There are 15 factories under construction, which have already been allocated an additional 67.5 MW, taking the total allocated power to 310 MW.

There is also an additional 50 MW demand from mainly small and medium industries that are currently on holdm since all power has been allocated, according to BPCL.

Power allocated to existing industries is based on a contract agreement, therefore used power cannot be sanctioned to other factories, but goes back to the Druk Green power corporation, which is exported to India.

“Companies like BFAL, BCCL, Penden cement, SD Eastern ferro silicon are drawing above 75 percent, but others like steel factories are underutilising,” said Sunil, senior manager of BPCL. “There are industries that had been sanctioned around 20 MW, but are currently using only 2 MW.”

“Around Nu 1.7 bn has been spent on infrastructure for providing power to the Pasakha industrial area and every year BPCL has to pay Nu 80 mn as loan repayment from 2008 to 2019, but this infrastructure is underutilised,” said Dasho Bharat Tamang. “The cost of this underutilised infrastructure is indirectly being borne by domestic users, as tariffs rates are decided based on the operating costs of BPCL.”

Dasho Bharat Tamang said that he would monitor the electricity usage of factories for three months and companies would be consulted to give up their unused sanctioned power voluntarily, but if they did not agree the new rates would have to be applied.

BCCI president Tobgay Wangchuk said, “BPCL should first consult with the stakeholders like industries on this before taking any decision since the energy demand charges are already quite high”. He said that BPCL should find out why industries are unable to use their full quota as factors like recession, volatile markets, equipment failure and plants under construction would be influencing low usage.