International News

Power-pinched pockets

A part from the “happy country” tag, Bhutan is also known, enviously, as the country with the cheapest electricity rates.  Compared with the region, electricity is dirt-cheap in the country, but it is not going to be so, any longer.

With the latest revision, electricity, some have realised, is becoming expensive.  And this applies to home users, besides the industrialists, who are already complaining of the new rates.

The rate per unit charged to domestic consumers is now exceeding even the rate charged on the electricity we export to India.  With the revised rates that Bhutanese will start paying from the end of the month, those who fall in the block II category, like urban residents, will be paying Nu 0.21 more than the export rate.

The electricity generated from the 1,020MW Tala project is exported at Nu 1.92 a unit.  Chukha power is exported at Nu 2.25 after the recent revision.  Block II users will pay Nu 2.13 from this month, and it will increase to Nu 2.45 next July.  Even the lifeline, or those who use below 100 units, the rate at Nu 1.28 from next year will be closing in on the export rate of Tala power.

To be fair, electricity tariffs have to be revised to meet the ever-growing current expenditure, which has to be funded through domestic revenue.  The pressure on the government to meet expenses like maintaining roads, irrigation channels, and paying public servants, is increasing.  One way to meet the cost is through taxation and increasing tariffs, which the present government has successfully done.

But at the rate electricity tariff is increasing, the pride of the country, touted as the cheap and clean energy, is increasing. It is time to look at our policies.

All this while we have been promoting clean energy to the extent that even villagers are encouraged the use of electric appliances to cut down dependence on fossil fuels and wood.

It is an irony that the government, on one hand, is promoting clean energy and, on the other, making electricity dearer.  With the civil service saturated, the government is encouraging jobseekers to look beyond the civil service, to the private sector.  Despite a department to promote small and cottage industries, the government has started an independent centre to promote small-scale enterprises to create jobs.  Small and cottage industries will have to rely on cheap electricity, a comparative advantage so far.

Small and cottage industries will bear the brunt of the recent revision and, in the next cycle, they will pay almost twice the amount charged for exporting.  If the clean energy that we have been boasting of and promoting to replace fossil fuels is becoming expensive, the purpose is defeated even before it starts.

The cost of fuels shocked the nation when the subsidies on LPG and kerosene were cut.  Many believed that our reliance on vulnerable areas like fuel should be substituted with the cheap and clean energy we produce.  At the rate electricity tariff is increasing, it is quite a setback.

We will soon feel the ripple effect of the revision.  Industrialists are already warning the government of dire consequences for revising the rate.  If they close down, like they claim, there will be jobs and revenue lost, and cost of goods manufactured within the country will shoot up

 

Source: kuenselonline 

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