Tariffs to go up on Jan. 1: Electricity by 9.7%, Water by 6.8%
The Public Utilities Regulatory Commission (PURC) has announced new tariffs for water and electricity effective January 1, 2014.
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The new adjustment, according to the PURC, had been precipitated by the full implementation of the automatic adjustment formula (AAF).
Subsequently, consumers would be required to pay an increase of 9.7 per cent on electricity and 6.80 per cent on water.
The AAF is a pricing mechanism that tracks and incorporates movements in key determinant uncontrollable factors to reflect the actual cost of electricity generation, transmission and distribution.
It allows for a quarterly review to reflect changes in factors whose effect on operations are considered to be beyond the utility companies — the Volta River Authority (VRA), the Ghana Grid Company (GRIDCo), the Electricity Company of Ghana (ECG) and the Northern Electricity Distribution Company (NEDCo).
According to the Director of Public Affairs and External Relations of the PURC, Nana Yaa Jantuah, the price of crude oil on the international market, the cedi-dollar exchange rate and the rate of inflation were the key variables that influenced the adjustment.
The new increment, she said, was intended to preserve the real value of tariffs approved for the utilities in October 2013.
"It should be noted that the current increase is largely driven by movements in the exchange rates, inflation and the demand variation," she explained.
The PURC, she indicated, had directed the ECG and NEDCo not to bill consumers retrospectively (back billing) with the new tariffs.
"Such an action will attract the necessary sanctions," Ms Jantuah said.
On Wednesday, September 25, this year, the PURC announced upward adjustments of 78.9 per cent in electricity and 52 per cent for water after considering proposals by service providers.
The increment fell short of the 166 per cent and 112 per cent requested by the electricity and water providers, respectively.
Organised labour, as well as individuals, expressed varied opinions on the impact of such hikes on their incomes and their lives generally.
In reaction to the increment, The General Secretary of Trade Union Congress, Mr Kofi Asamoah, said the increment indicated hard times ahead since it would add up to the high cost of living in the country.
Although, all stakeholders agreed to the implementation of the Automatic Adjustment Formula, he said, TUC was yet to carry out its own analysis on the indicators used to increase the tariffs before making any further comments.
Writer's email: della.russel@graphic.com.gh.