Being Penalized For Not Using Imported Energy? – Yeshey Dorji

For the past many years I have been wailing cries of agony and frustration – at having to pay electricity bills upwards of Nu.9,000.00 per month, during the winter months. For the more than average Bhutanese, that is a whole lot of money. I want to know who can sanely explain that one energy source that is the country’s biggest exportable surplus – is also the energy source that is outside the reach of the ordinary Bhutanese people. Thousands of Bhutanese spend many useful hours – queuing up at the fuel stations – trying to buy energy source that is imported at great cost to our foreign exchange reserve.

From where I stand, it is totally illogical: how is it possible that energy imported at great cost is cheaper than what we say we produce in abundance, at home? Is there something that I am unable to comprehend? What came to mind was a documentary film titled “The Economics of Happiness”. This film also makes the same point that I am making: How is it possible that something produced 15,000 miles away, then trucked and ferried across the seven seas, is cheaper than that which you produce in your own back yard?

Am I so dumb or what? Is there some kind of rocket science involved here that is beyond my fathoming? Before I go completely berserk wondering, and wondering I decided to speak to someone senior in the industry, to try and get a bearing of what the hell is involved. That was a mistake – I came out from nearly an hour of meeting and talking – completely bewildered at the skewed logic of the government.

In plain simple language this officer explained to me as follows:

Bhutan exports 70% to 75% of our electricity production to India

Of the remaining 25% to 30% that is consumed locally, 70% of it is consumed by the industrial sector at Pasakha and elsewhere.

The industrial sector gets power at a subsidized rate of around Nu.2.00/kWH

Domestic and other consumers are charged from Nu.1.28/kWH to Nu.4.02/kWH

I asked this officer two simple questions:

1.  The industrial sector is said to consume 70-75% of the domestic electricity requirement. By implication, the largest share of subsidy allocated by the government goes towards subsidizing consumption by the industrial sector. Now consider that this sector has traditionally declared dividends of upwards of 100-300% every year.

Is it possible that the government is able to provide subsidy to the industrial sector, because it is exacting the cost on the poor domestic consumers? Is it possible that the industries are making such huge profits, at the expense of the poor Bhutanese people? Is the common man contributing to the huge profits these industries are able to make?

2.  I fall under the LV Block-III Bulk consumer category. This means that I meet all my energy needs from electricity generated in country – I do not contribute to increase in import bill. Why am I being penalized for this by charging me a higher rate? Shouldn’t my subsidy be higher because I am meeting all my energy needs from local energy source? Am I being penalized for NOT using imported energy?

This officer replies; “I do not know.”

The writer is an ardent blogger and Charter Member of the Rotary Club of Thimphu.