2022-2025 MULTI-YEAR MAJOR TARIFF REVIEW FOR NATURAL GAS, ELECTRICITY AND WATER SERVICES

The Public Utilities Regulatory Commission (PURC), has concluded its regulatory process for the examination and approval of utility tariffs covering the period 2022 to 2025.

The tariff review process commenced with the receipt of proposals from the following Utility Service Providers: Volta River Authority (VRA), Ghana National Gas Company (GNGC), Ghana Grid Company Limited (GRIDCo), Electricity Company of Ghana (ECG), Northern Electricity Distribution Company (NEDCo), Enclave Power Company (EPC) and Ghana Water Company Limited (GWCL).

The Commission also received proposals from Ghana National Petroleum Corporation (GNPC) in respect of projected natural gas volumes and tariffs by gas supply sources.

As has been the practice, the PURC undertook extensive stakeholder consultations, which afforded the utility service providers the opportunity to explain their proposals to the general public and key interest groups such as the Association of Ghana Industries (AGI) and the Trades Union Congress (TUC).

The tariff decisions for the period 2022-2025 have been informed by rigorous analyses, intense debates, and extensive consultations. The last major review of tariffs was done in 2018 which resulted in an 17.5% reduction for residential and 30% for non-residential in electricity tariff.

Since then, key macroeconomic variables have deteriorated, particularly since 2020. These have adverse implications on the ability of utilities to keep the lights on and water flowing.

The companies requested for very astronomical increases with GWCL demanding over 300% increase in end-user tariffs. ECG and NEDCo proposed 148% and 113% increases respectively. VRA and GRIDCo proposed 37% and 48% increment respectively.

After receiving these proposals, the Commission carried out rigorous regulatory audit of processes and assets of Utility Service Providers, enabling it to adjust the Weighted Average Cost of Gas (WACOG) for power generation and end-user tariffs for electricity and water.

The details are summarized in Table-1 (for Natural Gas), Table-2 (for electricity and Table-3 for water).

Table-1 Summary of Approved Natural Gas Charges (USD/MMBtu): 2022-2025

In approving the Weighted Average Cost of Gas (WACOG) for the regulated period (2022-2025), the Commission considered, GNPC’s projected gas volumes by gas source and tariffs as well as projected gas supply volumes and tariffs by N-Gas.

For Gas Gathering, Processing and Transmission Service Charges, the Commission took into consideration financing, investment and operational costs as well as condensates and liquids revenue receipts by GNGC.