The Public Utilities Regulatory Commission (PURC), has deferred the announcement of its decision with regards to the upward tariff adjustment proposals from utility companies for the period from 2022-2027.
The deferment, as stated in a press statement by the PURC, is as a result of broadening tariff consultation process to solicit more independent views, independent verification of submitted projects, and deeper consultations with key stakeholders such as the utility companies.
“The Commission wishes to assure all stakeholders of its commitment to ensuring a transparent, fair and an all-inclusive process in determining the multi-year tariff,” noted the PURC.
Per the statement, the PURC’s new date for the announcement of the multi-year tariff will be from July 1 to July 15, 2022.
Read statement below:
ECG makes 148% increase in tariff proposal to PURC
Power distribution company, the Electricity Company of Ghana (ECG), has submitted a proposal to the Public Utilities Regulatory Commission (PURC), seeking approval for the upward review of electricity tariff by 148% for this year.
For the subsequent years – from 2023 to 2026 – the ECG is seeking further approval of 7.6% tariff increase on its Distribution Service Charge (DSC) ie charge for distributing electricity to Ghanaian households.
ECG in its multi-year tariff review proposal for the period from 2022-2026, asserts the high tariff increase is attributable to the cost of investment projects, existing gap between actual cost recovery tariff and PURC approved tariffs and the effect of macroeconomic factors such as inflation and exchange rate.
According to the electricity distribution company, the current DSC of GHS 16.10/kWh is inadequate and has eroded the financial viability of the ECG which has had an adverse impact on the entire distribution sector.
It however believes that, with a DSC charge of GHS 39.95/kWh – that is the 148% increment – it will be able to recover actual cost of electricity distribution and remain financially viable.
Adding that, with the huge investment needs facing the distribution industry over the next five years, it is expected that the proposed tariff increases would inevitably be approved to sustain efficient and reliable electricity distribution service.
Similarly, the management of the Ghana Water Company (GWCL) has also proposed to the PURC to increase water tariff by some 334%.
The GWCL in its proposal said over the years, the approved tariffs have not been full cost reflective.
This has led to the inability of GWCL to raise enough revenue to finance the much needed capital investment projects, with a consequent unsatisfactory level of service, the company said.