Utility tariffs up tomorrow - 3.02% for electricity, 1.86% for water

Effective tomorrow, October 1, 2024, consumers of both electricity and water would experience increment in tariffs to ensure regular supply of service.

It follows a new tariff approval by the Public Utilities Regulatory Commission (PURC) which will see electricity jump by 3.02 per cent and water up by 1.86 per cent across the board for all customers.

The new tariff review was occasioned by changes in the exchange rate, domestic inflation rate, cost of natural gas and electricity generation mix, among others.

A statement issued last Saturday and signed by the Executive Secretary of the PURC, Dr Ishmael Ackah, explained that the review, undertaken within the PURC Quarterly Tariff Review Framework, was to account for changes in key uncontrollable factors.

“The Public Utilities Regulatory Commission of Ghana wishes to inform consumers of electricity and water that it has carried out its quarterly review of the existing tariffs.

The new tariffs take effect from October 1, 2024.

“This review, undertaken within the PURC Quarterly Tariff Review Framework, is to account for changes in key uncontrollable factors, specifically the exchange rate, domestic inflation rate, cost of natural gas and electricity generation mix, among others,” he said.

By incorporating changes in the values of these indicators in the quarterly tariff reviews, he said the commission ensured that the real values of the tariffs were maintained to provide for the financial viability and ability of utility service providers to deliver on their mandate. 

Ensuring regular supply

The executive secretary said the tariffs adjustment was necessary to keep the light on and the water flowing.

“Following the quarterly tariff review, the Commission wishes to inform the public that there will be a 3.02 per cent increment in electricity tariffs and a 1.86 per cent increment in water tariffs for the Third Quarter of 2024 for all categories of customers,” he said.

He said the commission’s decision was based on changes in some key parameters, such as inflation rate, exchange rate, and the weighted average cost of gas (WACOG) over the projected third quarter.

He said the commission also considered several other underlying factors, including the current economic conditions and general living standards of Ghanaians, and the competitiveness and sustainability of industries. 

Considered factors

The hydro-thermal generation mix considered for the projected period remained unchanged with hydro sources contributing 34.81 per cent to generation, while thermal sources contributed 65.19 per cent to the generation mix.

There was, however, a 4.96 per cent depreciation of the Ghana Cedi against the US Dollar between the second and third tariff quarters.

Projected inflation rate for the period declined marginally from 24.38 per cent to 22.27 per cent. Similarly, the weighted average cost of Gas (WACOG) declined from US$/MMBtu 8.0422 to US$/MMBtu 7.8368 for the third quarter.

The overall changes in these factors under consideration amounted to a total under-recovery of GH¢173.98 million, which translates to a 3.02 per cent increase in electricity tariffs. In the case of water, a revenue gap of GH¢12.01 million was recorded which translates to a 1.86 per cent increase in water tariffs.