The Electricity Company of Ghana (ECG) says it will reduce its debt to sales ratio by 20 percent provided its proposal for 148% increment in tariff is approved.

The major power distributor also hopes to increase other incomes by 10 percent and ensure a 95 percent completion of all projects once its proposed tariff increment is approved.

Speaking at a stakeholders’ consultative meeting for the multi-year major tariffs review organised by the Public Utilities Regulatory Commission (PURC), on Wednesday, the General Manager for Regulatory Management at ECG, Sylvia Noshie provided some justification for ECG’s demand for the increment in tariff.

“If the Commission approves our tariff, we have a plan, we know that there is a lot expected from us. We hope to reduce reduce our debt to sales ratio to 20%. We hope to meet the PURC’s collection target of 98 percent, in terms of operational excellence we would ensure that all projects would be at least 95 percent executed on time,” she stated.

ECG has faced heavy criticisms after it proposed a 148% increment in tariff to cover the period 2019 and 2022. 

But the company, during the stakeholders’ consultative meeting today, argued that the new tariff would help it reduce its losses and be more efficient.

“We would want to improve and be efficient when it comes to losses and therefore will be working towards meeting the targets that will be set by the regulator for the five-year period. Currently, our target is 22.6 percent,” she added.

The company also assured that if the proposed 148% increment in tariff is approved, there won’t be any tariff adjustment above 10 percent year-on-year.

Meanwhile, the Institute of Energy Security (IES) has described as unrealistic, the demand in tariff increment by ECG.

Even though the think tank agrees that the cost of production has gone up over the years, it insists the increment sought is on the high side.

Energy Analyst with the IES, Fritz Moses, speaking on JoyNews’ AM show on Tuesday, May 10, said the institute will meet the utility providers with the PURC and suggest their counter-proposals to them.

 “For the increment, the Electricity Company of Ghana is demanding, we believe it is on the high side and of course, we understand that the economy of 2018 and 2019 is not the same as 2022.

“So things have necessarily increased, but the rate of increment we believe is on the high side looking at the 148% and 334% these operators are asking for, and we feel they are unrealistic.”

“But these are proposals from their end, so when we meet them with the PURC, we will present our positions on what we think should be considered in the final review.”



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