New tariff to take off February 1 - PURC

The Public Utilities Regulatory Commission (PURC) has stated that the new tariff for the year will take effect from February 1, 2019.

Prior to announcing the new tariffs, the commission said it would continue to engage with the various stakeholders to reach reasonable electricity and water tariffs.

The Chairman of the Technical Committee of the PURC, Mr Ishmael Agyekumhene, made this known at the final public hearing on tariff adjustment in Accra yesterday.

The consultative meeting was to enable the service providers to present their proposals before the stakeholders for consideration.

The utility companies who attended the meeting were the Electricity Company of Ghana (ECG), Ghana Grid Company (GRIDCo), Northern Electricity Distribution Company (NEDCo), Enclave Power Company Limited, a Ghanaian-owned private power distribution company, Ghana Water Company Limited and Power Distribution Services Limited (PDS), which is taking over the ECG.

Proposals

According to Mr Agyekumhene, the commission would scrutinise the proposals submitted by the utility service providers, evaluate them and come up with appropriate new tariffs by February 19, 2019.

Read also:https://www.graphic.com.gh/features/features/tarrifs-up-what-for.html

He said while the concerns raised by the public at various consultative meetings across the country would be considered in the review procedure, one key factor the PURC would take into consideration before approving the new utility tariffs was to ensure a high level of efficiency on the part of service providers.

Touching on the concerns for cheaper electricity in the country, Mr Agyekumhene acknowledged that electricity needed to be cheaper, but that could not be done overnight due to already existing binding power purchase agreements signed by the various governments.

Additionally, he said the thermal plants which the country relied upon for power generation, coupled with the cost of gas to produce power, had made thermal plants very expensive, increasing the cost of electricity in the country.

He noted that the utility service providers were trying hard to deliver on their mandates but more needed to be done to enhance their delivery and cut down their cost of operations.

With the takeover of the ECG by PDS, he said, electricity losses were expected to reduce by one per cent annually, leading to efficiency in the power distribution sector.

ECG and GRIDCo

Presenting the proposed tariff adjustments, Mr Ebenezar Baiden, an Energy Economist at the ECG, said the company had over the past years invested in various expansion and new projects to provide reliable power supply for its customers and added that the company’s current asset was GH¢13 billion.

He said the demand for the upward adjustment was to enable the ECG to undertake more expansion works to ensure reliability, efficiency and accessibility of power across and beyond the country.

The GRIDCo, in their presentation, said they were asking for almost a 100 per cent increase in new tariffs.

The Manager for Market Operations, Mr Kofi Owiredu, who made the presentation on behalf of GRIDCo, said the current tariff was not reflective of the huge cost of its operations and other costs and, therefore, called for upward adjustments.

He said the company was proposing GH¢4.897 per kilowatts hour as against the current tariff of GH¢2.5107 per kilowatts hour.

 Mr Owiredu said the company incurred a financial loss of GH¢76 million in its operations, a challenge that resulted in delayed debt service and breach of financial covenant, deferment of some projects and maintenance works, as well as delay in the payment of compensations.

NEDCo

The Northern Electricity Distribution Company (NEDCo) is proposing a 40 per cent increase over the 2015 adjustment of 0.3075 pesewas.

The Manager in charge of Billing and Revenue of NEDCo, Mr Thompson Agalab, said the company was also making losses as it recorded GH¢230 million in 2018 due to inadequate revenue from the 2015 approved tariffs.

He said a large chunk of their customers were the ministries, departments and agencies (MDAs) who since 2013 had not paid the GH¢814,041,525 they owed the company.

He, therefore, expressed the hope that government would assist the company to retrieve the amount to solve the numerous problems facing the company.

The Enclave Power Company Limited also proposed 26 pesewas per kilowatts hour.

GWCL

The Ghana Water Company Limited also proposed 0.022 pesewas increases in water tariff.

However, the director of communication of the company suggested that the tariff would be reduced to 0.0014Gp if the government would support the company to pay off its outstanding loans.

TUC

The Trades Union Congress has, however, called for 15 per cent reduction in electricity instead of the current upward adjustment the utility service providers were demanding.

The Director of Research and Policy, Mr Kwabena Otoo, in his remarks said if the government had made some bad policies in the sector, the ordinary Ghanaian should not be made to bear the cost through the high tariffs.

Nonetheless, he urged the service providers to take into consideration the income of the citizens before making some of those proposals, saying the average salary was GH¢800.