PURC must check system losses

The Public Utilities Regulatory Commission (PURC) has announced an upward review of electricity and water tariffs for the first quarter of this year.

The new tariffs, which took effect from February 1, will push the cost of electricity up by an average of 29.96 per cent across the board for all customers, while the cost of water will increase by 8.3 per cent.

The commission, however, approved varying rate adjustments, including some reductions for selected industrial and commercial consumers, as part of the ongoing restructuring of the existing water rate structure.

The new tariff review was occasioned by exchange rate volatility, rising inflation, the generation mix and weighted average cost of natural gas.

The review was in conformity with the quarterly tariff review mechanism and guidelines, as communicated in the commission’s August 2022 major tariff review decision.

The Daily Graphic appreciates the position of the utility companies whose operations have come under severe strain as a result of present economic conditions, as outlined by the PURC, chief of which is the exchange rate volatility.

We find the new phenomenon of special tariffs being given to industries and some essential organisations in the country to help boost their operations as apt and in the right direction.

In the past, the review of tariffs was done once in a long while, which often put the utility companies in a difficult financial position because of their inability to meet their operational costs and other expenditures.

The previous practice of announcing big jumps in rates also affected consumers and, therefore, the quarterly reviews are ideal, as they track and incorporate changes in key factors used in determining natural gas, electricity and water tariffs.

While we agree with the PURC that under-recovery has negative implications for the ability of utility companies to serve consumers properly, we wish to drum home the need for the commission to ensure that the utilities drastically reduce waste or system losses.

The paper is aware that unaccounted for water and electricity averages 46 per cent.

This, in other words, means loss, which we find highly unacceptable and expect the PURC to address without further delay.

We are aware, through our own investigations, commentaries on social media, among others, of how many people are using the services of the utilities for free.

In the case of water, there are many bulk water suppliers in the system who are billed like residential customers, not commercial.

Some bottled water companies are also alleged to be using water for their business and paying far less than what they are expected to pay.

Illegal connections in many homes are also an age-old factor which contributes to the phenomenon of unaccounted for water.

In spite of the many arrests, these illegalities still linger.

With electricity, there are many small shops, drinking spots, among other businesses, particularly those that operate at night, which do not use electricity legally.

While some bypass the meters, others have none at all because they have managed to connect directly from the main source.

The Daily Graphic has done many reports in which some workers of both utility companies have been found to be the ones who helped the nation wreckers to perpetrate their illegalities.

To us, this is the area the PURC must critically turn its attention to and compel the utility companies to reduce those acts of theft and check their operational inefficiencies because we strongly believe that no matter the level of increases in tariffs, should these illegalities be allowed to fester, no headway will be made in that direction.

We urge the PURC and the utility companies to be more proactive in that direction, so that consumers will not have to always bear the brunt through increase in tariffs.

The commission must note that the more the tariffs become unbearable for those already paying, the more they will find ways to bypass the system.

We can say with all certainty that should the utility companies reduce losses by just five per cent every year, they will be financially more stable and deliver more in the medium term.