Upward adjustments in utility tariffs to kickstart September 1
Upward reviews in utility tariffs by the Public Utilities Regulatory Commission (PURC) is expected to commence on September 1, 2022.
This is per information shared by a source familiar with stakeholder consultations being held by the PURC.
According to the source familiar with the stakeholder consultation process, the PURC aside from the public fora across the 16 regions, also engaged identifiable groups and relevant sections of the public and had considered all sides of the arguments in arriving at appropriate tariffs.
Another source said the tariffs to be announced would exclude taxes and levies already imposed by the state, adding that, micro, small and medium enterprises (MSMEs), such as food joints and salons, would be protected from paying the “punitive” tariffs.
Meanwhile, the Daily Graphic has also reported that, the new tariffs will not be across the board, which means the rates will depend on the reasons and proofs adduced by the utilities and the verification the commission has done.
Utility companies in the country, presented proposals to the PURC in May this year, based on the regulator’s guidelines.
While the Ghana Water Company Limited (GWCL) proposed a 300 per cent increment over its existing tariffs, the Electricity Company of Ghana (ECG) proposed 148 per cent, the Volta River Authority (VRA) proposed 37 per cent, with the Ghana Grid Company Ltd (GRIDCo) proposing 48 per cent.
Other proposals were 38 per cent from the only private power distributor, Enclave Power, and 113 per cent increase over the existing tariffs of the Northern Electricity Distribution Company (NEDCo).
The tariff proposals were in line with policy directions to progressively eliminate what has been described as “punitive tariff bands” that discouraged consumption.
This included industry being made to pay higher to cushion residential consumers, a situation which was adding to the cost of doing business and making operations in the industrial sector costly.
The multi-year tariff adjustment, which will come with different rates of increment over a five-year period, is also expected to enable the PURC and the utilities to commit to the quarterly “automatic” adjustment system, support industrial development and improve utility efficiency.
The PURC is said to have subjected all the costs proposed by the utilities to strict assessment and validation, including visiting some of the investments on the ground.
It accepted servicing costs on loans for approved investments, while the state-owned utilities were asked to suspend all discretionary investment this year.
The regulator also requested for and critically assessed proposed investments by utilities, among other things.