The Director of Public Relations at the Power Distribution Service (PDS) has denied claims the service owes Independent Power Producers huge sums for power supplied.

Speaking on Joy FM’s Super Morning Show, William Boateng also denied claims that PDS has failed to honour its financial obligations to the IPPs since it took over the distribution of power from the Electricity Company of Ghana in March 2019.

Mr. Boateng was rebutting threats by the Chamber of Independent Power Producers and Bulk consumers (CIPDIB) that they will plunge Ghana into darkness if some $ 700 m debt owed its members is not paid in eight days.

Explaining the situation, the Chief Executive of CIPDIB, Eliplim Kwabla Apetorgbor, said the decision to cut power supply to PDS has been necessitated by debts they have incurred in running their operations.

These operations, he said include fueling and maintaining their plants and paying workers.

Apetorgbor said the six IPPs had a “wonderful marriage’’ with the Electricity Company of Ghana until PDS took over the work of ECG.

ECG was paying IPPs every week from earning made from consumers.

But that stopped when PDS took over in March 2019. 

Attempt to retrieve these debts have been met with stonewalling from PDS. They have also failed to respond to their demand letters or invitations to a meeting to discuss outstanding payments.

The way out, Mr. Apetorgbor threatened, is to stop supplying their 1,500 megawatts of power to PDS, which constitutes more than 50 per cent of what is required to meet the demands of consumers.

However, the Power Distribution Service is challenging these claims.

William Boateng, Director of Communications at PDS, said the PDS has no contract with the Independent Power Producers. They, therefore, owe the IPPs no obligation to respond to their correspondents or make payments to them. 

“Mr. Apetorgbor got it wrong there,” Boateng said on the SMS Monday.

Explaining this, Mr. Boateng said PDS has a contract with ECG and it has not reneged on it.

“We have honoured all our concessional obligations to ECG.  ECG gives us bulk bills and we pay every week,” he pointed out.

William Boateng directed the IPPs to the ECG, the body which might have an agreement with them.

Background

It will be recalled that Manila Electric Company (Meralco) officially took over running of ECG from March 1st this year, under a 20-year concession agreement.  The negotiated Transaction Agreements – namely the Lease and Assignment Agreement, Bulk Supply Agreement, and Government Support Agreement – to secure the proposed Private Sector Participation (PSP) in ECG were approved by Cabinet and ratified by Parliament. The Concessionaire, according to the agreement, is expected to inject an amount of $580m into the distribution system during the agreement period’s first five years. The Bulk Supply Agreement between ECG and the Concessionaire deals with the Concessionaire’s back-to-back purchase of the capacity and energy made available to ECG under the Power Purchase Agreements (PPAs).