ECG Seeks 225% Hike in Distribution Tariff to Avert Financial Collapse
The Electricity Company of Ghana (ECG) has submitted a proposal to the Public Utilities Regulatory Commission (PURC) seeking approval for a 225 per cent increase in its Distribution Service Charge (DSC1).
If approved, the tariff will rise from GHp19.0384/kWh to GHp61.8028/kWh for the 2025–2029 regulatory period.
ECG, which serves more than 73 per cent of Ghana’s population and 4.87 million customers, argues that the current tariff structure is unsustainable and risks pushing the company into financial distress.
According to the utility, the DSC1 presently accounts for only 11 per cent of the total electricity value chain cost—well below the global benchmark of 30–33 per cent. The sharp depreciation of the cedi, which fell by about 74 per cent between 2022 and 2024, has further eroded revenues by an estimated 45 per cent.
To address these challenges and improve service delivery, ECG said revenue from the proposed tariff adjustment would be invested in infrastructure expansion and operational efficiency. The company disclosed that it has already spent US$408 million since 2022 on substations, automation, and the deployment of more than one million smart meters.
Future investments, ECG noted, would focus on reducing outages, cutting technical and commercial losses, and boosting revenue collection. Projections show that the System Average Interruption Duration Index (SAIDI) could fall from 32.5 hours in 2024 to 19.2 hours by 2029, while the System Average Interruption Frequency Index (SAIFI) is expected to decline from 16 to 9. System losses are targeted to drop from 27 per cent to 22 per cent, with collection efficiency improving from 87 per cent to above 90 per cent.
The company also outlined plans to deploy a further three million smart meters to ensure accurate billing, combat power theft, and resolve customer complaints more quickly. Faulty meters, it assured, would be replaced at no extra cost.
ECG stressed that a cost-reflective tariff would enable it to wean itself off government bailouts, freeing public funds for other pressing national priorities.
Meanwhile, PURC is expected to subject the proposal to regulatory scrutiny and public consultations before a final decision is announced. Any approved changes will only take effect after PURC’s formal communication.
