Electricity Rate Hike Delayed Amid Parliamentary, Public Pressure

By Nyein Nyein 12 November 2013

A planned electricity rate increase that was supposed to take effect this month will be postponed until the 2014-15 fiscal year, Burma’s minister of electric power told Parliament on Tuesday, following a public backlash against the proposal.

Responding to lawmakers’ request late last week for a review of the plan, Minister Khin Maung Soe defended his ministry’s rate increase as a bearable burden for Burma’s electricity consumers, but nonetheless said the proposal would be delayed.

“Minister U Khin Maung Soe said it is a reasonable rate increase, as only about 1,500 kyats [US$1.50] would be added to households’ spending over 100 units [per month],” said Phay Than, a Arakanese lawmaker from the Rakhine Nationalities Development Party (RNDP).

Phay Than told The Irrawaddy that “the minister said the ministry would revise the planned electricity rate increase, and he will report to Parliament on their revised plan before the next fiscal year,” which begins on April 1, 2014.

The current parliamentary session closes on Friday and the next session, during which the national budget will be deliberated, will convene in mid-January 2014.

About 30 percent of Burma’s 60 million people are connected to the national electricity grid, most of them in cities where the power is used to light homes and fuel industrial processes.

“It is not Parliament’s decision to make any changes in setting fees higher or lower, but as it has become an issue of public interest, we told the ministry to explain,” said Phay Than, referring to a request by the legislature last week on Friday to have the electricity rate proposal reassessed.

The parliamentary intervention followed public protests against the rate rise in Rangoon.

The ministry announced in late October that the electricity fee would be increased from the current 35 kyats to 50 kyats per unit for households using more than 100 units of electricity. Households that use less than 100 units per month would not see a change in their monthly electricity bill.

For businesses, those consuming from 1 to 5,000 units of electricity per month would experience a 35 percent increase and pay 100 kyats per unit. Companies using more than 5,000 units would have seen their electricity bills double as rates were to jump from 75 kyats to 150 kyats per unit.

The minister had said that the decision to increase electricity fees was made in order to cover rising power production costs and to help fund an expansion of the electricity grid in Burma, which is far behind its regional neighbors in terms of electrification.

“The minister said the ministry is in debt, and charging more to the biggest users will help cover costs to share the electricity to the other states that are paying higher rates per unit of electricity,” Phay Than said. In southern Burma’s Tenasserim Division and parts of Arakan State in the country’s west, electricity rates can range from 300 to 500 kyats per unit per month.

Lawmakers on Tuesday also instructed the ministry to review the status of its financial debt and the issue of electricity generation lost during transmission.

In a later development on Tuesday, Parliament rejected a request from President Thein Sein seeking approval from the legislature to accept a $156 million loan from South Korea’s foreign aid arm, the Economic Development Cooperation Fund (EDCF), which was to be used for development projects of under the ministries of Communication and Information Technology, and Electric Power.

“We rejected it [the loan] now, but will discuss it more in the next parliamentary session,” Phay Than said, adding that lawmakers turned down the loan because they felt the money was not clearly earmarked for specific purposes.