Electricity is also about the Quality

Most of us in northern parts of Thimphu town (Zilukha, Motithang, Hejo and Lanjophakha) have been experiencing lot of frequent black outs over the last couple of days. The 1250 Compliant number is not of much use then they tell that their people are working on the problem. This has interestingly come at the same time when BEA/MOEA and the minister was announcing the much awaited power tariff increase.

I was immediately made to think of the cost vis-à-vis quality of electricity that we are provided with. While BEA/BPC or DGPC are justifying that even the new increased cost is low compared to the region, we perhaps should come out of the box and also compare it to other parts of the world. Electricity tariff in other parts of the world are definitely higher than Bhutan’s in terms of actual dollars, but we have to compare the quality of the service they receive both in terms of the electricity reliability (blackout, brownouts, voltage fluctuations) back up services, time to resolve an issue and payment methods. If it takes BPC a week to fix a problem in Thimphu, I wonder about the service in other parts of the country! Most regulators across the globe penalize unexplained blackouts and also require utilities to restore power within minimum time frame. He do have BEA, its about time we also enforce such regulations and let our service providers pull up their stockings instead of just allowing for tariff increase and give out bonuses and boast about having a state-of-the-art National Load Dispatch Center. The problem was at Motithang and it has taken then almost a week to sort it out!

We should also look into the cost of electricity compared to the overall affordability of the citizens. For example in Singapore the cost for 100kWh electricity is US $20.9 (i.e., @S$26.08/kWh), where as in California, USA the same will be US$ 13 (100kWh*13C/Kwh) and in Bhutan it will be only US $ 1.63 (100kWh*Nu .98/kWh). However the average GDP of Bhutan is US$ 2,399, Singapore US$ 51,709 and USA at US$ 49,965 in 2012. So if we compare GDP versus our cost of electricity to Singapore and USA; while our electricity is cheaper by 8-13 times to USA and Singapore, our GDP is lower by almost 21 times to both. If we consider that someone consume 100kWh/month for 12 months, a Bhutanese would spend 0.82% of GDP on electricity alone, whereas for the same about of electricity, Americans and Singaporeans would only spend 0.31% and 0.49% of their GDP respectively. So I do not think that we have the cheapest electricity!

The other thing is also to find out what consists of electricity tariff in other countries. For example, California electricity cost, one of the highest in the USA, consists of investments for Energy Efficiency measures that are pumped back into the society such as distribution of free CFL bulbs for the public, Grants to do energy efficiency improvement projects, and also Nuclear Decommissioning investments. Therefore, we cannot compare the face value of our electricity tariff to other countries and claim that we provide cheap electricity.

Certain increase of cost I do believe is inevitable, even if it is just to catch up with inflation, but at the same time, we need to justify our stands rather properly and also ensuring that we do not eye wash the public. We need to improve the service reliability, investment into rural programs. It is also true that our cost of generation is cheaper compared to other countries by nature which would mean that our electricity should infact remain cheaper and it is not a favour that BPC/DGPC is doing for us.

Chhimi Dorji

Thimphu

Flawed Water Metering and Tariff System in Bhutan

There has been lot of discussions on the proposed electricity tariff revision, but none on the proposed Water Tariff Revision in Thimphu. It also seems there is no authority/agency besides the cabinet that is there to check the Water Tariff unlike electricity or other goods. I would like to point out some serious flaws with the overall water metering and tariff system all across the country and in particular in Thimphu city.

1.     Currently, people living in multiple apartment buildings in Thimphu pay the higher rates, as the rates are higher for more consumption. For instance a house in Thimphu with City water connection is allowed to and provided with only one water meter for a household and not for every family/ apartment. This is probably not by law, but implemented by the existing system and practicality of metering and plumbing ease. The water tariff for three slabs of consumption with lower rates for lower consumption and higher rates for higher use thus are not applicable as the consumption of 4-10 families living inside the whole house is clubbed together. This totally defeats the calculation that Kuensel or other agencies have made for each family for all buildings with multiple families and apartments. In this regard, I think we should first look at either providing individual meters for each apartments or take the total number of apartments connected to a water meter into consideration instead of taking the total consumption of the whole building together and using the corresponding rate. This will ensure that we determine actual consumption of each family and apply the appropriate rates. If we look carefully at the bills, rich people in Thimphu living in individual cottages and duplexes with individual meters would be paying lower water tariff than less-to-do people living in apartment complexes.

2.     Non-commercial residents in Norzin Lam are charged with commercial rates as well. If we look at the buildings on Norzin Lam, most of them do have commercial establishments such as shops, offices or restaurant on the first 1-2 floors, but more than half of the spaces in all buildings are residential. But all the buildings I know of on Norzin Lam are charged with Commercial Water tariff as there is only one water meter for the whole house. So while10-20% of the space are for commercial purpose, all other 80-90% occupants with residential homes land up paying the commercial rate which is more than twice the rate for domestic water use. Therefore there should be a scrutiny of the actual user types on Norzin Lam, and maybe in other places too, instead of continuing with charging with commercial rates.

3.     The reason for Water Tariff revision as recommended by World Bank and ADB should not be our justifications for tariff revision. According to the Kuensel report on May 25, 2013 it says that “ for Thimphu Thromde total revenue generation through water and sewerage service was Nu 345.9M while their expenditure stood at Nu 187.6M with an annual excess of Nu 79.1M.” Based on this figures, it is very clear that the Thromde is generating more than enough money to pay for the expenses. World Bank and ADB indeed are very important donors and partners for Bhutan and Thromde, but then we have to use our own logic and calculations before a tariff revision that will burden the common citizens of Bhutan. Whenever there is electricity, gas or any other utility service tariff revision there should be an economic analysis. Is there such a calculation for Thromde? Simply going by some donor’s recommendation should not be our decision as they would definitely understand that we have social issues at home to be taken care.

4.     Improvement of the service would be required before a rate revision or atleast a plan on improvement or how to use the excess money. We should know that water is an indispensible requirement and it also involves cost to get water everywhere. However, if look around in Thimphu City, half of the city receives only water for 3-4 hrs a day. Good example is Norzin Lam- the heart of Thimphu city! where there is only water supply for 2-3hrs a day. People have to use all sorts of measures such as giant tanks to buckets to jerry cans to store water and at times get it from other areas. I seriously think it will be necessary for the Thromde to work on providing a better service or atleast start that process before a rate revision that does not even seem necessary at the moment. If there is reliable adequate water supply for 24hrs, I don’t think people will mind paying for the service.

Himalayan Glaciers are melting due to Black Carbon from India

The Lawrence Berkley Lab in the US has conducted a research and found that the Himalayas are melting due to black carbon from India. Some of the highlights from the study include:

Black carbon absorbs sunlight and warms only the atmosphere. Black Carbon also makes the snow surface dirty. Dirty snow absorbs far more sunlight—and gets warmer faster—than pure white snow.

Top sources of black carbon include shipping, vehicle emissions, coal burning and inefficient stoves. According to Menon’s data, black carbon emitted in India increased by 46 percent from 1990 to 2000 and by another 51 percent from 2000 to 2010.

Black carbon heats the atmosphere, it changes the local heating profile, which increases convection, one of the primary causes of precipitation. While this results in more intense rainfall in some regions, it leads to less in other regions, this situation triggers extreme weather in eastern India and Bangladesh.

“The black carbon from India is contributing to the melting of the glaciers, it’s contributing to extreme precipitation, and if black carbon can be controlled more easily than greenhouse gases like CO2, then it makes sense for India to regulate black carbon emissions,” says Menon.

Check out:

http://newscenter.lbl.gov/feature-stories/2010/02/03/black-carbon-himalayan-glaciers/

Bhutan and Kerosene Heaters

Not long ago, Bhutan was estimated to have one of the highest rates of fuel wood consumption in the world, at 1.27 tons per person per year, according to a 1991 Food and Agricultural Organization (FAO). Home heating is huge part of our cooking stoves. There are many versions of improved cooking stoves which have been implemented in different parts of the country. One of the most common one is the “Bukhari”.

Over the last few years a lot of urban Bhutanese have resorted to Kerosene room heaters from South Korea. It is a big trend in the country.

I was never too sure about the emissions, although doctors have claimed it to be very bad, but then what choices do people have? Wood is now expensive and difficult to get in urban areas unlike in villages, electric heaters are not good enough for the extreme cold with inefficient homes, coal is non-existent, so are gas heating or geothermal. Some countries do seem to have policies and regulations, we have none.

How bad is bad? and What would be the best possible alternatives?

Poverty and Bhutan

I always thought Development is a positive change just opposite to Poverty. Not anymore. The reading on Poverty and Development into the 21st century by Allen and Thomas opened my eyes. I would comment on a plan of the government of Bhutan, a least developed country with a development philosophy called Gross National Happiness.

The Bhutanese Government is working tooth and nail to eradicate poverty in the society. According to Kuensel (26 January, 2010) more than 20 percent of Bhutan’s estimated 630,000 citizens live on less than US$ 1 a day, the threshold considered necessary to maintain an adequate standard of living. The government plans to reduce this poverty rate to less than 15 percent by 2013. http://www.kuenselonline.com/modules.php?name=News&file=article&sid=14567
This is also the figure mentioned by World Bank for developing countries.

The real issue is, how we define poverty in a traditional Bhutanese society? A lot of things are never bought and sold at market rates. Many villages still function with exchange of labors, goods and simple social obligations/exchanges as members of the community. For instance during a house construction, a person might not be paid anything for the day’s work, while he would be fed and the labor returned sometime in future. We also take a lot of food and other items to our friends and families during birth, promotions, death, sickness and social occasions unlike many other societies. We might not be taking them into account at all, especially as income, but the senders feel it.

Another question about Poverty is the balance between different countries and regions. Poor in USA is not same as the poor in Bhutan, 1$ in Bhutan is way different from 1$ in California. At the same time, is 1$ equally worthy in Thimphu as in Ozorong?

The United Nations has its Human Development Index (HDI) and Human Poverty Index (HPI) which takes into consideration of Health, Education and social services. Bhutan in our own way has the Gross National Happiness (GNH) and its indicators. GNH has awesome indicators which go beyond the HDI/HPI of the UN taking into account of environment, tradition and culture as well. Why is the Bhutanese government still going with the concept of poverty line drawn by $ per day income?

Poverty eradication sounds like an excellent goal to pursue and dream about, a society in which all Bhutanese can afford proper housing, health and education. But then, do we simply go by the current global concept of dollars per day income as used by the rest of the world or define poverty in our own ways? We cannot define a family in a remote village, totally self-reliant, with free local resources and traditional lives without anything to sale as poor since their source of income is low, while we sort out someone in Thimphu with a 100$ per month salary as above poverty line, since the family in Thimphu has to pay a huge rent and buy everything.

Let me make it clear, I do not mean that we should plan on keeping the rural folks away from modern amenities and services so that we have living a museum to visit on occasions. However, are we asking them to start selling and putting price tags on everything they have been giving and receiving for free? Are we saying that if they do not have adequate source of income and only have peace and happiness that they are poor? Are we looking to employ our monks, old men and women and Tshampas/hermits to come start working in the fields or drives taxes to generate income and eradicate poverty? I am sure the matter deserves a way more attention and study than a mere comment by someone like me. But this is a food for thought for all of us.