Tariff Reform Study and Preparation of Electricity Tariff for Consumers of Palli Bidyut Samitis (PBSs) Under Bangladesh Rural Electrification Board (BREB)

Assessment of cost of electricity service delivery, tariff study and preparation of electricity tariff for consumers of Palli Bidyut Samitites (PBSs) under Bangladesh Rural Electrification Board (BREB). The study is financially supported by the International Development Association (IDA) through a Credit to BREB.

The assignment contains the following requirements:

• The Revenue Requirement determination will follow BERC regulations.

• The consultant shall review current tariff methodologies and gain an appreciation and clarify the structures and philosophy adopted.

• PBS tariffs will be calculated based on rate base, depreciation, debt servicing and return on investment. Any cross subsidies shall be incorporated in a clear and transparent manner. Best practices shall be considered.

• The tariff calculation shall be based on the premises of affordability, social impacts, and the ability of groups of consumers (especially commercial and industrial) to cross-subsidise residential consumers.

• A roadmap shall be developed for subsidy elimination over a reasonable period of time.

The TOR require the preparation of an electricity tariff calculation methodology and model that:

• Computes tariffs for end users.

• Is transparent in its methodology and delivers predictable and stable tariffs.

• Complies with accepted regulatory principles.

• Guarantees recovery of the total cost and a reasonable amount of profit for the utility.

• Is easy to use.

• Provides adequate short-term and long-term financial information.