The Electricity Company of Ghana (ECG) has submitted a proposal to the Public Utilities Regulatory Commission (PURC) for a steep 225% increase in its Distribution Service Charge (DSC1).

The power company says the huge rise is necessary to avert financial collapse and ensure a reliable power supply.

The proposed new charge would see the DSC1 rise from its current GHp19.0384/kWh to GHp61.8028/kWh for the period 2025–2029.

The company, which serves over 73% of Ghana’s population and 4.87 million customers, argues that the current tariff is unsustainable.

According to ECG, the DSC1 constitutes only 11% of the total electricity value chain cost, far below the global benchmark of 30-33%.

This deficit, coupled with the Ghana cedi’s depreciation of about 74% between 2022 and 2024, has reduced the real value of the company’s revenue by 45%.

To counter these challenges and address the public's persistent complaints about service quality, ECG has presented a detailed plan to invest the new revenue in critical infrastructure.

The utility revealed that it has already invested US$408 million since 2022 in new substations, automation, and the rollout of over one million smart meters.

The proposed tariff will fund the continuation of these projects to deliver tangible improvements in service delivery.

According to projections, the new tariff will enable ECG to significantly reduce power outages.

The System Average Interruption Duration Index (SAIDI) is expected to drop from 32.5 hours in 2024 to 19.2 hours by 2029, while the System Average Interruption Frequency Index (SAIFI) will be reduced from 16 to 9.

The company also projects a reduction in system losses from 27% to 22% and an increase in revenue collection efficiency from 87% to over 90% during the period.

ECG’s proposal addresses customer concerns about accountability and fairness.

It plans to roll out about 3 million smart meters to ensure accurate billing and prevent theft.

The company has also assured customers that faulty meters will be replaced at no additional cost and that investments will lead to faster complaint resolution and improved voltage supply.

The utility is also promoting its digital payment platform, the ECG Power App, which allows customers to buy credit, check balances, and lodge complaints without visiting a physical office.

The company emphasised that a cost-reflective tariff is essential to free ECG from its dependence on government bailouts, allowing those funds to be redirected to other national priorities.

The final decision on the proposed tariff rests with the PURC, which is mandated to review proposals and hold public consultations before any new rates are implemented.

Any changes will only take effect after PURC’s approval and a public announcement.