PURC Expects Drop in Tariffs

18-01-2019

PURC Expects Drop in Tariffs

The Public Utilities and Regulatory Commission (PURC) says it’s looking forward to a decline in electricity tariffs in Ghana following the takeover of the Electricity Company of Ghana (ECG) next month by Power Distribution Services (PDS).

This is contrary to the call on Ghanaians by Minority National Democratic Congress (NDC) to prepare for a 60 percent rise in electricity tariff when PDS takes over ECG on February 1, 2019.

Minority Spokesperson on Energy, Adams Mutawakilu, told the media that due to ECG’s debt, which reportedly hovers around GH¢2 billion, PDS would be forced to raise tariffs to survive.

But in an interview with BUISINESS GUIDE on Monday in Accra on the sidelines of a stakeholders’ engagement for the utilities’ firms to present their tariff proposals, a Commissioner at PURC, Ishmael Edjekumhene wondered why the minority was making such predictions.

According to him, if there should be any increment in electricity tariffs it should be as a result of high generation cost and not because of the claims put forward by the NDC.

He stated: “Because they (PDS) are new and are coming to Ghana for the first time, we have told them as regulators that the only cost we know is the ECG cost. So that’s going to be the starting point.”

According to him, “But they have proposals and like ECG’s presenter said they are asking for 23 pesewas per kwh distribution charges. “So I don’t know where people got this idea that because PDS is coming in, tariffs are going to go up by a certain margin.”

Mr. Edjekumhene indicated that PDS has pledged do better than ECG.

PDS has signed up to certain agreements which include making a $100 million and reducing ECG’s loses by one or two percent annually, he said, noting that such an arrangement should result in the reduction in electricity tariffs.

“We expect that quality of service is going to improve, we expect that there will be more efficiency and that ultimately should drive cost down.”

An electricity economist at ECG, Emmanuel Baiden, in a presentation, said ECG shall now concentrate on bulk power supply and export same to neighbouring countries and the actual retail or distribution of electricity, noting that PDS would do the distribution.

New Tariffs

The Northern Electricity Distribution Company (NEDCo) has proposed that its 2018 charge of GH¢0.30755 should be increased this year to GH¢0.430526 kwh, while Enclave Power Company Limited has proposed 26 pesewas per kwh.

There was no tariff adjustment from Ghana Water Company Limited.

Ghana Grid Company Limited (GRIDCo) proposed that its tariff be increased from 2,5107 gp/kwh to 4.897 Gp/kwh, with its Manager for Market Operations, Kofi Owiredu saying the amount would ensure smooth operations of GRIDCo.

Earlier, Mr. Edjekumhene said new tariffs for the various utility companies are expected to be announced by the close of January to take effect from February 1, 2019.

 

Source: https://www.ghanaweb.com/GhanaHomePage/business/PURC-expects-drop-in-tariffs-715668

 

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