The government has deiced to suspend any increases in electricity tariffs being anticipated by power producers until August 2010.

The temporary reprieve for consumers is to enable further deliberations on other option needed to fund the Volta River Authority (CRA), the Electrify Company of Ghana (ECG) and the Ghana Grid Company (GRIDCo).

The reprieve however does not pre-empt current public forums by the Public Utilities regulatory commission (PURC) on engaging the public on the payment of new tariffs.
A Deputy Minister of Information, Mr. Samuel Okudjeto Ablakwa in an interview in Accra Thursday said the Cabinet decision was taken to enable the government to critically study the demands of the power companies and consumers for the best option that would benefit all stakeholders.

He said what was clear was the fact that the three companies involved in the generation, transmission and distribution of electricity needed to be supported. The issues at stake, however, were how much consumers ought to pay and the existing categorization of consumers under specific payment schedules.

He said the government’s intention in any decision was to ensure that any review in tariffs was not detrimental to the cost of doing business in the country, while at the same time ensuring the funding required by the utility companies.

Making a case for increases in tariffs in an advertiser’s announcements in the Monday, March 15, 2010 issue of the Daily Graphic, the three companies said investments that resulted from revised tariffs in November 2007 and enabled maintenance, systems improvement works and expansion in distribution line capacity had fallen short of current electricity demands, leading to unsatisfactory service.

That was made worse by the depreciation of the Ghana cedi by over 40 per cent since then the dwindling of the average end user tariff from $0.13 cents per kilowatt hour in November 2007 to $0.08 cents.

The effect is the reduction in the ability of the three companies to operate and maintain existing networks and plans and the raising of enough capital to finance key investment projects.

The companies have asked for the cooperation of the public in the review exercise for them to perform their mandated roles.

In a related development, residents of the three northern regions are demanding that the utility companies show evidence of quality service before increasing tariffs.

According to them, the case currently being made by the companies for tariff adjustment was not new, adding that similar justifications had been made in the past for tariff increases which were not followed by improved service.

The residents made the demand at a public hearing organised in Tamale for members of the public to state their views on the proposed tariff adjustments submitted by the utility companies for approval by the PURC.

The hearing, which was organised by the PURC, was also attended by representatives of civil society.

The VRA, the ECG and GRlDCo, the three main power producers, are making a case for an upward adjustment of the kilowatt hour charge from Gp12.77 to Gp32.53, representing a 155 per cent increase.

The Ghana Water Company Limited (GWCL) is, on the other hand, making a proposal for a 39.2 per cent increase in the average tariff from the current GpO.66.

The representatives of the various utility companies gave various reasons why there was the need to increase water and electricity tariffs, including the rising cost of crude oil, the disrepair of their generating, treatment and distribution equipment and the indebtedness of the companies to financial institutions.

They insisted that aside all those factors, consumers were not paying the right tariffs for water and electricity.

According to the utility companies, what was currently being paid by consumers could not cover the cost of production.

However, the residents disagreed with the utility companies and insisted that in the past when tariffs were adjusted, the companies did not show proof of improved service delivery.

Some consumers also complained about poor services from the GWCL, citing reasons such as the supply of water at odd hours, the poor attitude towards fixing broken pipelines and the irregularities with the billing system.

In view of the challenges, the residents entreated the PURC to ensure that the utility companies honoured their side of the contract before demanding tariff increments.

The Chairman of the PURC, Dr Emmanuel Annan, commended the residents for patronising the forum and pledged to take their views into consideration.

Source: Daily Graphic/Ghana


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