An upward adjustment in electricity price is expected this year.
The review in electricity price as confirmed by the Head of Public Relations and External Affairs of the Public Utilities Regulatory Commission (PURC), Mr Bawah Munkaila, according to industry watchers is on the back of anticipated increment in the price of gas used mainly in power generation, cedi depreciation and crude prices.
It is however, unclear the percentage margin by which the cost of electricity in the country is going to be reviewed.
Norvanreports understands that already, talks between government, the PURC, GRIDCo and ECG over the likely increase in cost of electricity are ongoing.
Speaking in an interview, energy analyst Kojo Opoku, noted that aside the anticipated increment in the price of gas, other factors that will account for the increase in electricity price include the depreciation of the cedi against the dollar and the technical and commercial losses (debts) incurred in both the transmission and distribution of electricity by GRIDCo and the ECG.
“The variables the PURC will be looking at is the dollar to the cedi, if the cedi has depreciated significantly against the dollar as per the last major review. They would also be looking at the technical and commercial losses incurred by both transmission and distribution which is factored into the pricing of electricity, then there is the issue of cross-subsidy. Government will be asked to make a presentation to PURC and same with the ECG and ECG is most likely ask for an increase in its distribution charge,” he stated.
Speaking further, Mr Opoku noted it is about time the ECG, GRIDCo and other companies in the power value chain start making profit as losses incurred due to their inability to ensure 100 percent recovery of power production costs, results in increment in electricity tariffs which burden consumers.
“We need to get to a point where ECG, GRIDCo and all the other companies in the value chain start making profit, we can’t keep running them as social entities where at the end of the day, they make losses and government has to find money to put in there. Because if ECG, GRIDCo make losses, the only person in the value chain is the private entity and the private entity doesn’t make a loss because he would ensure 100 percent recovery of cost of producing electricity. So government has to now find excess money to pay for the indebtedness, bottom line is that we are the ones who have to pay, so even if we don’t pay it through electricity tariffs, we either end up paying it through ESLA, or in one form of tax or the other,’ he noted.
The Auditor-General’s Report on GRIDCo debts
The Auditor-General’s Report lists Enclave Power Company Limited as owing GRIDCo a little over ¢3 million, Electricity Company of Ghana’s debt is over Ghs 1 million, Northern Electricity Distribution Company (NEDCo), Ghs 63 million.
Bui Power Authority owes GRIDCo more than Ghs 4 million and Volta Aluminium Company Limited also owing over Ghs 15 million.
Others include Great Consolidated Diamonds and Free Zones Board bringing the total to more than Ghs 230 million.
