Boon to power consumers as govt provides GH¢300m subsidies
Following massive public outcry against high electricity tariffs, the government, after extensive consultation with all stakeholders in the power sector, has provided some reliefs by way of subsidies to all customers of the Electricity Company of Ghana (ECG).
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The subsidies, according to the Managing Director of the ECG, Mr Robert Dwamena, took effect from July 1, this year and will last for the next six months.
The subsidies are expected to cost the government GH¢300 million and will be reviewed after the six months.
Addressing a press conference in Accra yesterday, the General Manager in charge of Regulatory and Governmental Affairs at the ECG, Mr Ebenezer Baiden, said both residential and non-residential power consumers would enjoy some subsidy from the government, depending on the amount of power they consumed.
New tariffs
Per the new tariffs, electricity consumers are expected to pay less if their power consumption is between zero and 50 units.
Therefore, instead of consumers paying the rate of 67Gp per unit for 50 units of power consumed, they will now pay a rate of 34Gp per unit for the first 50 units of power.
The reliefs have been applied to extend the life line rate to all residential customers, instead of the previous application to only customers with consumption between zero and 50 units within a month.
In the case of non-residential and industrial customers, some subsidies have been applied to the energy charges to reduce the total bill for such consumers.
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Subsequently, a new reckoner which calculates a customer’s total bills, given the units consumed, has been put on the ECG corporate website (www.ecggh.com) to inform and guide customers on the application of the new reliefs.
Background
Last year, the Public Utilities Regulatory Commission (PURC) announced 59.2 per cent and 67.2 per cent hikes in electricity and water, respectively.
The hikes, which took effect on December 14, 2015, were greeted with massive public outcry.
They were subsequently condemned by civil society groups, political parties and a cross-section of Ghanaians.
Following that, the Consumer Protection Agency (CPA) sued the PURC and four power companies over the new electricity tariffs.
Since the beginning of the year, the public, especially industry players, have raised a series of concern over what they term as “killer tariffs”.
The situation has forced many businesses to reduce their production because they cannot foot the bills for electricity.
President John Dramani Mahama, as part of his ‘Accounting to the People’ tour at Madina in Accra, announced that effective July 1, this year, there would be a re-introduction of subsidies to cushion low-level consumers of electricity.
Subsidy
Mr Baiden said there had not been any changes in electricity tariffs but rather relief by way of subsidies that had been provided by the government.
Asked where the government would get the money to subsidise power consumption, he said, “It will be done in a sector refinancing agreement through the banks.”
Although he did not give an in-depth explanation as to what that meant, he said it would not be passed on to the public through taxes.
No timetable
Meanwhile, the ECG says it will not come up with any load-shedding timetable because the current power outages are temporary.
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According to the Head of Public Relations of the ECG, Mr William Boateng, the company would only release a timetable if the power generation challenge lasted longer than expected.
“As it stands now, the ECG cannot release a timetable unless we have received information that suggests that it will prolong,” he said in an interview with the Daily Graphic in Accra yesterday.
There has been public outcry for the last three weeks following consistent power outages experienced in some parts of the country.
Some power consumers have asked the ECG to come up with a timetable to enable them to plan their programmes and daily activities.
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Mr Boateng said the current instability in power supply being experienced in the country was as a result of shortage in fuel supply to the Volta River Authority (VRA) from Sahara Oil.
According to him, the ECG was monitoring how things would go in the next few weeks to decide whether or not to release a timetable.