ACEP okays upward adjustment in electricity tariffs

ACEP okays upward adjustment in electricity tariffs
Source: Graphic.com
Date: 22-06-2019 Time: 06:06:25:pm

Industry players and ordinary Ghanaians have expressed mixed reactions to the 11.7% increase in the electricity tariffs announced by the Public Utilities Regulatory Commission (PURC) on Friday.

Though the African Centre for Energy Policy (ACEP) described the increment as long overdue, it described as unfair, the blanket figure of 11.7% announced by the commission for both domestic and industrial consumers of electricity.

The Executive Director of ACEP, Mr Ben Boakye, said after the announcement, also said the tariffs should have been announced early enough for people to prepare for the adjustment.

He stressed that the PURC ought to have quoted a lower figure for industrial consumers of electricity since the high cost of power impacted negatively on businesses.

"We were hoping that the PURC will announce a much lower figure of say eight per cent for industrial consumers and perhaps 15% for domestic consumers.

"In any part of the world, businesses pay less for power as compared with domestic users because the businesses create jobs and propel economic growth so they need cheaper and reliable power," he said.

He urged the PURC to be proactive and ensure sustainability in the adjustment of electricity tariffs.

"The PURC should not wait for things to get out of hand before they announce increment in tariffs," he added.

The people

Mr Ayine Abelyine Awonnore, a communications person, said the cost of living was too high and, therefore, there was no need for an increase in tariffs.

 “What is disturbing is the blatant deception and pretentious behaviour as well as hypocritical posture of our political leadership depending on their cloak.

“These increases only come to help many electorates to see the nature of our political leaders,” he said.

Mr Ansah Owusu, an Estate Manager, said the reasons behind  the increment had been well justified by the PURC so “we can't complain much even though the news is not tasteful to the suffering masses,”

He expressed the hope that better services would be provided by the PDS in return.

For Mr Ken Gayle, he said “Not, not, not. “


Already, he said, many Ghanaians were suffering from the harsh economic conditions and believed the increment would worsen matters.

 Ms Janet Oforiwaa, a cold store operator, said even though she was not against increment in tariffs,  the 11.7% was too high.

Mr Ayine Abelyine Awonnore said: “For me, I have never dreamt that cost of living will ever reverse or roll backwards. It is an upward phenomenon.

Paul Salami Adima questioned the justification for the increase. “ What are the justifications? Quality of service? The 11.7% is too high, considering our standard of living vis-a-vis the service being rendered.

TUC

The Ghana Trades Union Congress (TUC) said its structures would meet next week to examine and discuss the increment.

According to the Deputy Secretary General of the union, Mr Joshua Ansah, it would deliberate and take a position on the increment next week.

In January this year, during the consultation process towards the increment of the tariff, the TUC called for 15% reduction in electricity instead of an upward adjustment the utility service providers were demanding.

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

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

The new tariffs

The PURC, after a six-month delay, yesterday announced new tariffs for electricity to take effect from July 1, 2019.

Water tariffs are expected to be announced later, according to a statement issued by the PURC which was signed by its Executive Secretary, Mami Dufie Ofori.

The statement said it took the decision after considering tariff proposals from stakeholders, including the Volta River Authority (VRA), Ghana Grid Company (GRIDCo), Electricity Company of Ghana (ECG), Power Distribution Services Ghana Limited (PDS), Northern Electricity Distribution Company (NEDCo) and Enclave Power Company.

It said after an extensive technical and financial analysis of the proposals, it arrived at the figures aimed at sustaining “the financial viability of the utility service providers as well as ensuring delivery of quality service to consumers.”

The statement further said: “As a major policy shift aimed at enhancing the competitiveness of Ghanaian industries, the commission has eliminated the Maximum Demand Charge on industrial customers (Special Load Tariff Customers). It is expected that this policy will result in some SLT customers experiencing savings in their overall electricity bills.”

It said the 2019-2020 tariff review decision was the outcome of prudent cost and effective monitoring undertaken by the commission.

Background

The PURC said the new tariff was originally meant to take effect from February 1, 2019 but had to be delayed because of the arrival of PDS in the energy sector.

From March 15, 2018, the tariffs went down, with residential customers benefiting from a 17.4 per cent reduction while non-residential customers received a 30 per cent reduction with Special Load Tariffs consumers getting 25 per cent and the mines, 10 per cent.

Players’ demands

In a proposal submitted to the PURC in November last year, the ECG, whose core mandate has now been transferred to PDS, requested an average tariff increase of about 37 per cent to enable it to make up for the increasing cost of production.

In January this year, NEDCo proposed a 40 per cent increase over the 2015 adjustment of 0.3075 pesewas.

The Enclave Power Company Limited also proposed 26 pesewas per kilowatts hour, while Ghana Water Company Limited proposed 0.022 pesewas increases in water tariff.

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