NDC MP opposes PURC’s decision to maintain tarriffs

The decision by the Public Utilities Regulatory Commission (PURC) to maintain tariffs this year has been met with opposition by some members of Parliament’s Mines and Energy Committee.

Edward Bawa said government should be sincere with Ghanaians and concede that the cedis’ depreciation and other production costs make maintaining the tariff detrimental to the sustainability of the energy companies.  

“We need to save our utility services by giving them a cost reflective tariff. PURC’s tariffs review from March to June will cost the utility services not less than ¢700 million which will collapse them and we will be going back to ‘dumsor’,” he said.

His comments follow the Commission’s statement Wednesday, signed by Executive Secretary Maame Dufie Ofori, announcing that tariffs will remain the same until the end of the second quarter of 2019.

The statement said PURC’s decision on tariffs changes will be announced in due course, specifically July 1, 2019.

“The Commission’s decision is due to critical emerging issues in the sector which are expected to affect the final tariff setting. Amongst others, the emerging issues are related to the planned relocation of the Karpowership Plant resulting in fuel switch savings, from Heavy Fuel Oil (HFO) to Natural Gas.” 

The statement added, “Secondly, reductions in the price of natural gas are anticipated due to ongoing negotiations by the government. These matters are outside the purview of PURC but their outcomes are likely to have a measurable impact on the Commission’s decision,” the statement said. 

Related: PURC stays electricity tariffs until June 30

But a member of Parliament’s Mines and Energy Committee is unhappy with the Commission’s decision.

The Bongo MP said considering the country’s economy with the depreciating cedi and other factors which affect tariffs, the decision is not a prudent one.

Giving an example, Mr. Bawa said the Ghana Grid Company Limited (GRIDCO) moved its tariff in 2018 from ¢5.0400 to ¢4.283 kilowatts per hour which affected the company.

“Because of this particular reduction of about 17 per cent, as we speak today, if you compare their losses in 2016 and 2017, you have a situation where in 2016, they were making a profit of about ¢59.13 million.

However, the former PRO of the Energy Ministry said, “In 2017, they made a loss of ¢31.10 million and in 2018, they also made a loss of ¢118 .28 million,”

According to him, exchange rate losses as a result of the cedi, GRIDCO made a loss of ¢148 million.