The government is planning to impose higher wholesale electricity rates on 21 profitable Palli Bidyut Samitys (PBS). Sector experts warn this regulatory shift could destabilise the decades-old cross-subsidy system that currently sustains rural power distribution across Bangladesh.

Under a proposal submitted to the Bangladesh Energy Regulatory Commission (BERC), the Bangladesh Power Development Board (BPDB) aims to treat surplus-generating PBSs identically to urban distribution companies. According to regulatory filings, 13 profitable cooperatives collectively transferred Tk 3,515 crore to 65 loss-making units in FY2024–25 to offset operational deficits caused by low residential tariffs and a large volume of subsidised consumers.

Officials at the Bangladesh Rural Electrification Board (BREB) fear this policy will trigger a severe liquidity crisis for the 80 distribution cooperatives under its purview. BREB already reported a loss of Tk 1,698 crore in FY2024–25, averaging a loss of Tk 0.34 per kilowatt-hour (kWh). Internal projections indicate the deficit will climb to Tk 2,387 crore, or Tk 0.44 per unit, in the current FY2025–26, and reach Tk 2,897 crore, or Tk 0.50 per kWh, by FY2026–27.

During FY2024–25, Dhaka-1 PBS emerged as the top earner with a revenue of Tk 615 crore, followed by Gazipur-1 at Tk 565 crore and Narayanganj-1 at Tk 522 crore. BPDB identified other profitable units across Chattogram, Mymensingh, Narsingdi, Cumilla, Bagerhat, Patuakhali, Habiganj, Moulvibazar, Manikganj, Munshiganj, and Companiganj, arguing these industry-dependent cooperatives no longer require preferential pricing. However, BREB data shows that only 10 to 13 PBSs have been consistently profitable over the last five fiscal years.

These few profitable centres support a vast network where 90 percent of the 3.79 crore customers are residential. Of these, 1.63 crore are lifeline users paying a subsidised Tk 4.63 per unit, well below the average retail tariff of Tk 8.95 per kWh. BREB, which delivers 57 percent of the national electricity supply, warned in its official reports that absorbing higher wholesale and transmission costs would inevitably force an equivalent increase in retail consumer tariffs.

Weakening the cross-subsidy framework could ultimately increase pressure on state finances, according to M Shamsul Alam, energy adviser to the Consumers Association of Bangladesh. He noted that forcing profitable public supply chains to bear higher wholesale costs would drastically reduce their capacity to support weaker rural units. BERC previously scheduled public hearings at the Krishibid Institution Auditorium to review the proposal and its nationwide implications.