Why Electricity Bills Soar Every May-June

Record-high load shedding has disrupted daily life across Bangladesh. Scorching heat has made it difficult for people to stay indoors. Adding to the hardship, consumers have once again faced so-called ‘ghost’ electricity bills, with charges far exceeding actual usage. Every year, when May and June arrive, consumers endure the same ordeal. Public outrage follows for a short period before fading away. In the meantime, power distribution companies continue to profit at consumers’ expense.

Why do these inflated bills repeatedly emerge during the same period each year? An investigation by Agamir Somoy found evidence of at least three practices by power distribution companies that contribute to the problem.

First, distribution companies, particularly the Rural Electrification Board (REB), allegedly shift the burden of excessive system losses caused by electricity theft and wastage onto consumers through inflated bills. Second, they seek to boost revenue and reduce outstanding dues before the fiscal year closes in June. Third, negligence by meter readers contributes to billing irregularities.

Bangladesh currently has nearly 50 million electricity consumers. Of them, around 38.06 million are REB customers. About 5.5 million consumers use prepaid meters, where inflated billing is generally not possible unless a meter malfunctions. The vast majority of the remaining postpaid consumers are served by REB, which supplies electricity through 80 rural electric cooperatives nationwide. Most allegations of bill manipulation involve these postpaid customers.

Extra Billing to Reduce System Losses and Increase Revenue

When distribution companies purchase electricity from the national grid and deliver it to consumers, some power is naturally lost due to resistance in transmission lines, transformers, and other equipment. This technical loss is known as system loss and is accepted worldwide. However, system losses in Bangladesh, particularly within REB, remain significantly higher.

REB recorded a system loss of 8.51 percent in fiscal year 2024-25, up from 8.16 percent the previous year. Higher system losses translate into greater financial losses.

Experts say poor-quality equipment, inadequate maintenance, long distribution lines, overloaded feeders, electricity theft, and wastage all contribute to excessive system losses. Allegations suggest that distribution companies pass the cost of these failures and irregularities on to consumers by charging for electricity they did not use, thereby artificially reducing reported system losses.

Several officials from rural electric cooperatives, speaking on condition of anonymity, told Agamir Somoy that REB sets annual system-loss reduction targets for the cooperatives. In some cases, officials receive verbal instructions to increase billing before the June closing period if those targets appear unattainable. No written directives exist, making such claims difficult to verify.

According to these officials, rural distribution networks naturally experience higher system losses than urban utilities because they stretch across remote areas and pass through heavily wooded terrain. The use of low-quality equipment supplied by REB further increases losses. Cooperatives must also purchase electrical equipment from REB, often at prices higher than market rates, allowing REB to earn additional profits. Many cooperatives struggle to absorb these costs, leading to reduced maintenance and even higher system losses.

The officials said that inflating consumer bills often becomes the easiest way to reduce reported losses. Some also resort to the practice to secure promotions, salary increases, or favorable evaluations from REB.

One official said more experienced administrators sometimes begin increasing bills gradually two or three months before June so consumers do not notice sudden changes. Others, however, refrain from such practices.

The officials also noted that in some cases the excess billing is adjusted from July onward. However, consumers do not recover the additional amount paid when inflated usage pushes them into a higher tariff slab. Under the slab system, the per-unit price of electricity rises as consumption increases.

Agamir Somoy obtained several examples that appear to support allegations that system-loss reduction efforts contribute to inflated bills during May and June.

At Sylhet Palli Bidyut Samity-2, system loss stood at 10.46 percent in June 2024. Just one month later, it jumped to 18.6 percent. In June of the following year, the cooperative reported system loss at 11.89 percent, but the figure rose to 21.16 percent in July.

Chandpur Palli Bidyut Samity-1 reported system loss at 2.23 percent in June last year. In July, the figure climbed to 12.14 percent.

Narsingdi Palli Bidyut Samity-1 reported system loss of 4.98 percent in June 2024. The figure nearly doubled to 9.85 percent in July. The following year, the corresponding figures were 6.58 percent and 8.05 percent.

Manikganj Palli Bidyut Samity reported system loss of 6.67 percent in June 2024 and 11.73 percent in July. The following year, the figures stood at 7.7 percent and 10.6 percent, respectively.

Chattogram Palli Bidyut Samity-3 reported system loss of 3.65 percent in June last year. The figure increased to 10.84 percent the following month.

Jashore Palli Bidyut Samity-2 reported system loss of 9.41 percent in June 2024 and 12.36 percent in July. Last year, the corresponding figures were 9.31 percent and 11.24 percent.

Officials from rural electric cooperatives said REB also sets targets for reducing outstanding bills and increasing revenue. To meet those targets, some senior officials feel compelled to inflate consumer bills.

Meter Readers’ Negligence

Meter readers prepare electricity bills. They work on contractual appointments and receive relatively low salaries. Rules require them to visit every consumer’s premises to record meter readings. In practice, many do not visit all customers.

Instead, some estimate usage based on the previous month’s bill regardless of actual consumption. As a result, bills can be either lower or higher than the amount owed.

Meter readers typically serve in the same area for six months. When a new reader takes over and records actual meter readings for the first time, discrepancies often emerge. These differences become particularly noticeable during the June closing period.

Power Division Response

Following complaints about excessive billing, the Power Division has instructed all distribution companies to investigate the allegations. It has also advised consumers to submit complaints either through the relevant distribution company offices or designated hotlines.

Mohammad Sanaul Haque, Additional Secretary (Coordination) at the Power Division, told Agamir Somoy that authorities are treating consumer complaints seriously. He said distribution companies have begun investigations and that further action will follow once their reports are received.

Professor M. Shamsul Alam, energy adviser to the Consumers Association of Bangladesh (CAB), told Agamir Somoy that many people are aware of these tactics to reduce system losses at REB and other distribution companies. However, no meaningful action is taken.

According to him, the power sector has become more focused on exploitation than service delivery. “The entire system has become embedded in a culture of dishonesty. As a result, people are not receiving justice in the energy sector,” he said.

“The power and energy sector needs major reforms. Those reforms will only happen when people become stronger and more vocal. But public protest is weakening day by day. People are accepting everything. That is the real crisis,” he added.

Dhaka University teacher Mosahida Sultana said pressure from higher authorities to reduce system losses and increase revenue often forces lower-level employees to engage in such practices. Yet those frontline workers face public anger, while those imposing the pressure remain untouched.

She said REB exercises strong control over the cooperatives and frequently pressures employees. Those who fail to comply may face transfers, dismissal threats, or actual disciplinary action.

“These practices will stop only when authorities identify and take action against those at higher levels who are involved,” she said.

Sultana also questioned the effectiveness of asking consumers to file complaints about inflated bills.

“How long will it take to resolve so many complaints? Given the hassle involved in filing and pursuing complaints, many consumers simply choose to accept the bills,” she said.

“Instead, the Power Division can easily verify the allegations by examining electricity purchase, sales, and other statistical data from distribution companies,” she added.

Cases of Questionable Billing

Mahbub Alam Lablu, a DESCO customer living in the Shamim Sarani area of Mirpur in Dhaka, paid an electricity bill of Tk 4,622 in May. In June, the bill rose to Tk 6,963.

Lablu said his monthly bill typically ranges between Tk 3,000 and Tk 3,500. Despite no significant change in household electricity use, his bills increased sharply in May and June.

A review of bills from Star Agro Processing Industries, located in the BSCIC Industrial Estate in Moulvibazar and served by a rural electric cooperative, showed that the factory paid around Tk 43,000 in electricity charges in March. The bill jumped to Tk 106,000 in April and rose further to nearly Tk 120,000 in May.

An official of the factory said operations were actually lower in April and May than during other periods of the year, meaning electricity costs should have declined rather than increased dramatically.

Tajul Islam Chowdhury, a resident of Chandmoni Road in Gopalganj and a customer of the West Zone Power Distribution Company Limited, said his monthly electricity bill usually ranges between Tk 800 and Tk 1,000. This month, however, he received a bill of Tk 1,811.