"PURC Hikes Electricity Tariffs By 14.75%, Water By 4.02% Amid Rising Utility Sector Costs"

PURC Hikes Electricity Tariffs By 14.75%, Water By 4.02% Amid Rising Utility Sector Costs

The Public Utilities Regulatory Commission (PURC) has announced a 14.75% upward adjustment in the average end-user electricity tariff, alongside a 4.02% increase in water tariffs for all consumer categories.

According to the Commission, the adjustment — which forms part of its Quarterly Tariff Review Mechanism — is informed by key economic indicators including the Cedi/US dollar exchange rate, inflation, the electricity generation mix, and the cost of fuel (mainly natural gas) used in power production.

In a press statement, the Commission noted that the tariff review is necessary to maintain the delicate balance between avoiding revenue over-recovery and under-recovery for utility service providers.

“Failure to make these adjustments could jeopardise the financial sustainability of utility companies,” the Commission warned, adding that several of these firms are currently “bleeding” from revenue shortfalls.

The new increments follow previous hikes in July 2024, when electricity tariffs went up by 4.22% and water by 1.18%. The latest increases bring the cumulative adjustment over the last nine months to 18.97% for electricity and 5.20% for water — burdening consumers already grappling with high inflation and a weakening currency.

Despite the hikes, PURC maintained that the current adjustments were made with restraint. It noted that the increases could have been steeper if the Commission had decided to recover the full extent of outstanding arrears from previous quarters.

The review, the Commission stressed, aligns with its rate-setting guidelines and is aimed at ensuring the long-term operational viability of utility service providers in the face of rising input costs.