STAR BUSINESS REPORT

United Power Generation and Distribution Company (UPGDCL) has disclosed that gas supply to its power plant in the Dhaka Export Processing Zone (DEPZ) was disconnected on April 28 following a prolonged disagreement with the gas supplier over pricing classification.

In a stock exchange filing, the company said the dispute stems from a government decision issued on January 2, 2018, which reclassified the gas price applicable to United Power from the Independent Power Producer (IPP) category to the captive power category for electricity supplied to the Bangladesh Export Processing Zones Authority (Bepza).

This reclassification has been contested by United Power, which signed power supply agreements with BEPZA in May 2007 to operate dedicated power plants at the Dhaka and Chattogram EPZs, the disclosure said.

The company said that the change contradicts its Gas Supply Agreements with Titas Gas Transmission and Distribution Company and Karnaphuli Gas Distribution Company, which stipulate that gas prices will follow the rate applicable to IPP consumers.

Despite repeated efforts by the company to resolve the issue in accordance with existing laws and agreements, the gas supplier continued to bill it under the captive power category, ultimately leading to the disconnection of gas supply to the 82 MW plant in Dhaka EPZ.

United Power has a total generation capacity of 895 MW.