BERC to re-audit financial reports of all energy companies

The Bangladesh Energy Regulatory Commission (BERC) will re-audit the financial statements of all electricity and energy-sector distribution and supply companies to assess their financial health, income and expenditure, and the financial viability of their investments.

BERC Chairman Jalal Ahmed disclosed the decision on Tuesday while speaking as the chief guest at the inaugural session of a training programme organised by the commission for members of the Forum for Energy Reporters Bangladesh (FERB) at the BERC seminar room.

He said that all relevant companies in the electricity and energy sectors had submitted their audited financial statements for the past three years following a request from the commission.

“A chartered accountancy firm will be appointed to review these reports. Through the audit, the commission will develop a clear understanding of the financial condition of each company,” he said.

The BERC chairman said that the commission currently lacked sufficient in-house capacity to conduct the review and would therefore appoint an external CA firm to examine and re-audit the companies’ financial statements.

“This will give us an initial assessment of the financial position of each company,” he added.

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BERC approval required before energy projects

Jalal Ahmed also said that projects in the electricity and energy sectors must receive prior approval from BERC under Section 22 of the BERC Act before implementation.

However, the requirement was not being followed for all projects, he said, adding that to ensure compliance, the commission has sent letters to Petrobangla, Bangladesh Petroleum Corporation (BPC), Bangladesh Power Development Board (BPDB), the Energy and Mineral Resources Division and the Power Division.

“BERC is responsible for approving projects in the energy sector. In addition to the government approval process, approval from BERC is also required because the investment in a project ultimately becomes linked to tariffs,” the chairman said. Referring to the Single Point Mooring (SPM) project, he said that around Tk8,000 crore had been invested in the project and the cost would ultimately be reflected in tariffs.

“Before implementing a project, it is necessary to assess the financial viability of the investment, how the investment will be recovered and what the payback period will be,” he said.

The commission, he added, could question whether it had been informed about an investment when the cost of a project was later proposed to be included in tariffs.

“Therefore, BERC approval is necessary before implementing projects in the electricity and energy sectors,” Jalal Ahmed said.

Concern over LPG supply

The BERC chairman also expressed concern over LPG shortages in different parts of the country and possible supply pressures during the upcoming winter.

He said that LPG shortages had been reported in various areas and that gas demand in Europe could rise sharply during the winter, potentially putting pressure on global energy supplies and prices.

“Ensuring gas supplies in the country will be a major challenge under such circumstances,” he said.

Jalal Ahmed also linked the recent difficulties in liquid fuel supplies to the conflict in the Middle East. He said that the LPG shortage began in November last year and, although the situation improved to some extent, supply problems emerged again following the conflict that began in February.

BUET study on gas consumption

The BERC chairman also announced that a study would be conducted through Bangladesh University of Engineering and Technology (BUET) to determine differences in gas consumption between metered and unmetered customers.

The study, he said, would provide a clearer picture of how much gas is actually consumed by customers with meters compared with those without meters.

Members of BERC, including Member (Gas) Md Mizanur Rahman, Member (Petroleum) Dr Syeda Sultana Razia, Member (Power) Brig Gen Md Shahid Sarwar (retd) and Secretary Md Nazrul Islam, were present at the event.

FERB Chairman M Azizur Rahman and Executive Director Serajul Islam Siraj, along with other members of the organisation, also attended the programme.