The Public Utilities Regulatory Commission (PURC) has confirmed that there will be an upward review of utility tariffs in the coming weeks.
This follows proposals it received from the public utility companies for the upward adjustment, which they say is due to their rising operational costs.
At least the Ghana Water Company Limited (GWCL) and the Northern Electricity Distribution Company (NEDCo) have asked the PURC to review tariffs upwards, citing an exponential increase in production cost.
Speaking in an interview with JoyNews, the PURC Commissioner, Ishmael Agyekumhene, said the Commission is commencing stakeholders’ engagements to finalise the review.
“We are now looking at the proposals. It is true that in 2019, there should have been a major tariff review that couldn’t take place because the Commission wasn’t impressed.
“So, we’re looking at it from next week or a couple of weeks [ahead]. There’d be stakeholder engagements as the PURC always does, and then ultimately, the tariff will be announced,” he said.
In September 2021, the Independent Power Producers (IPPs) and other consumer stakeholders kicked against the Electricity Company of Ghana (ECG), the Ghana Grid Company (GRIDCo), NEDCo and the Volta River Authority (VRA) over a possible increase in electricity tariff.
The IPPs had asked for a reduction in the electricity bills.
They argued that the 16% and 24% of power loss to technical and commercial losses by ECG was no fault of theirs.
Also, the Private Enterprise Federation had earlier kicked against the increase in electricity tariff, saying it would cripple many businesses amid the Covid-19 pandemic.
It rather urged government to do everything possible to make ECG competitive.
But the ECG and other power generation firms argued that their cost of production had gone up, warranting an increase in electricity tariff.
What IMF said
The International Monetary Fund, in a report, said the power sector shortfall remained large and growing, as electricity tariffs represented only 73% of cost recovery levels, with a large differential between household and business tariffs.
This tariff, it said, had only increased by just 5% since 2015.
“A tariff review was scheduled for July 2021. The authorities’ modelling analysis suggests that adjusting tariffs to inflation would be needed to bring the annual financial shortfall from electricity generation under US$500 million by 2024,” the Fund said.
The Bretton Wood institution said the Electricity Company of Ghana continued to suffer large technical losses, reaching ¢3 billion in 2018, a significant deterioration compared with 2016 and 2017.
It said the ECG was only managing electricity distribution without a clear reform plan.
Meanwhile, the power distribution company continues to implement systems to address power theft and losses.