Absorption of power tariff to cost GH¢1bn — Energy Minister
The three-month electricity bill relief announced by the government to mitigate the impact of coronavirus disease (COVID-19) on customers will cost the country GH¢1 billion.
The Minister of Energy, Mr John-Peter Amewu, who announced the figures, said the amount would cover 4.8 million meters across three utility companies — the Electricity Company of Ghana (ECG), the Northern Electricity Distribution Company (NEDCo) and the Volta River Authority (VRA).
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The minister made this known at a press briefing on the country's COVID-19 intervention programme in Accra yesterday and added that GH¢732 million of the amount would cover the cost of power for ECG customers for April, May and June, while NEDCo and VRA would account for GH¢108 million and GH¢23.7 million respectively.
ECG
Breaking down the figures, the minister said GH¢8.5 million would be absorbed from lifeline customers of ECG a month, while GH¢235.4 million would be spent on non-lifeline customers.
He explained further that ECG had a lifeline customer base of a million meters and at the current tariff level, that would cost the government GH¢8.5 million.
Additionally, he said, for the non-lifeline category who would enjoy 50 per cent reduction in electricity bills, ECG had 2,780,886 residential and 1,608 special load customers who would cumulatively account for GH¢235.4 million per month.
"The total relief for ECG customers per month based on the estimated revenue is, therefore, GH¢244 million a month, translating into GH¢732 million for the three months announced by the President," Mr Amewu said.
NEDCo
On NEDCo, he said the total government relief for customers of that company was GH¢47 million per month, translating into GH¢141 million for the three months.
He explained further that the figure comprised about GH¢10.9 million per month or GH¢32 million for the three months for a customer population of 569,000 lifeline customers.
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The minister added that the 369,000 non-lifeline customers of NEDCo would benefit from GH¢36 million per month, translating into GH¢108 million for the three months.
VRA
On VRA, Mr Amewu said GH¢55.5 million a month, totalling GH¢166.4 million, would be spent for the three months.
That figure, he said, comprised 12 mining customers who would account for GH¢42.4 million discount monthly and GH¢127.2 million for the three months.
Additionally, the Volta Aluminium Company (VALCO) will benefit from the discount to the tune of 14.8 million for the three months while other manufacturing companies settle for GH¢23.7 million for the same period.
Modalities
Mr Amewu explained that customers would begin to feel the reductions and absorption of the electricity bills for April in May.
“You remember that the President directed that we should use the March bills as the baseline for these reliefs. The implementation has begun for the three months. April benefits will be seen in May; May benefits in June and June benefits in July,” the Energy Minister explained.
Touching on customers who had been disconnected by the utility companies before the announcement of the interventions, he said for as long as they remained disconnected, they would not benefit from the package.
He said such persons would have to sort out their indebtedness and other issues with the utility companies to be reconnected if they wanted to benefit from the reliefs.
“If for some reason your disconnection was because you have not paid your bills but you have made an attempt to pay the bills now, you will be entitled to the benefits,” he said.
Indebted utilities
Some concerns have been raised by energy sector think tanks and individuals that the intervention by the government was going to worsen the plight of the debt-ridden utility companies.
Responding to a question on such concerns, the minister stressed that it was better to prioritise the plight of members of the public in these critical times of COVID-19.
“The utilities are already suffering but in the midst of this difficulty, human lives are key and the President stated this clearly that we can bring the economy back to life, but we cannot bring back lost lives”.
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“We know the difficulties of the utility companies but as a responsible government, we will be able to bring the utilities back to life after COVID-19,” he stressed.
Background
President Nana Addo Dankwa Akufo-Addo announced a number of measures to mitigate the impact of COVID-19 on citizens and businesses in his latest broadcast to the nation.
To further mitigate the impact of COVID-19 on citizens, the President, on Thursday, April 9, announced the absorption of the entire electricity bills of consumers who consume up to 50 KWh, while residential and commercial consumers would benefit from a 50 per cent discount on their bills.
Some individuals and institutions have raised concerns about the implications of the reliefs announced by the President.
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For instance, the Africa Centre for Energy Policy (ACEP) wanted to know how much would be spent on the intervention and the source of funds.
The energy think tank also said the country's energy sector was plagued with huge financial challenges and that could deepen the woes of the sector if due diligence was not done in implementing any interventions.
ACEP’s defiance
The Chief Executive Officer (CEO) of ACEP, Mr Benjamin Boakye, stressed that the total electricity bills for Ghana every month was about $350 million and if the government was taking 50 per cent of that amount, it translated into close to GH¢3 billion for the three months.
Speaking to the Daily Graphic after the Energy Minister disclosed that GH¢1 billion would be used for the electricity bills, Mr Boakye said ACEP stood by its computation.
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He challenged the utility companies to come out and speak to the figures put out by the minister.
“Basically the utility companies issue bills of about GH¢700 million a month and that is not even the optimum they should issue. Even with that, ECG should be issuing GH¢350 million electricity bill to the government every month,” he stated.