Former Minister Accuses ECG Over ‘Backdoor’ Tarrif Increment

The Member of Parliament for Yapei-Kusawgu, John Jinapor is alleging the Electricity Company of Ghana (ECG) has increased electricity tarrif through the ‘backdoor’.

The ECG over the weekend met with the select committee on Mines and Energy to deliberate on issues contained in its work plan laid before Parliament. But speaking with the Parliamentary Press Corps, the former Deputy Energy Minister said the ECG has increased tarrifs by some 33 percent.

He asserted that ” The PURC announced tarrifs gazette and in that gazette they indicated that they were reducing some tarrifs. In that buildup is a component known as the Bulk Generation Tarrif………..PURC gave a composite figure of 42.9 percent per kilowatt hour, that is in accordance with Act 538 of the Public Utilities Regulatory Commission Act…………..just recently, the Electricity Company of Ghana laid their work plan before Parliament which is also mandatory. When I checked and did the analysis, I realised that this amount has been increased by 33 percent to an amount of 52.7 Ghana pesewas per kilowatt hour. It means that there is a 33 percent increment in the composite bulk generation tarrif which ultimately is passed on to you the consumer.”

Mr Jinapor observed that, the move by the ECG is illegal and thus served notice to file a motion that would compel Parliament to summon the Energy Minister, John Peter Amewu and perhaps the immediate past Energy Minister, Boakye Agyarko to appear and provide some answers.

John Peter Amewu, Energy Minister

“First of all I’m serving notice that I’m writing to the PURC to compel them to restore the tarrif back to the 42.9 and also refund the monies that have been illegally charged consumers back to consumers. Number two is that we have picked intelligence based on the interraction we had that this illegal backdoor activity was done on the instructions from the Ministry of Energy during Boakye Agyarko’s time. We find this unfortunate and we intend filing a motion in Parliament to summon the Minister and to ensure that this illegality is reversed”.

Gov’t Cuts Electricity Tariffs

In March this year, the Public Utilities Regulatory Commission announced the reduction of tariffs for consumers in the country.

The PURC said the tariff reduction was borne after “the Commission investigated the cost of production of all sources of supply of electricity to the distribution utilities . . . in line with Section 17(2) of the Public Utilities Regulatory Commission Act 1997, (Act 538).”

“As prescribed by law, the Commission’s decision-making process includes but is not limited to detailed technical analysis of tariff proposals and extensive stakeholder consultation, which were held to solicit views and inputs for the determination of the approved tariffs,” a statement signed by the Executive Secretary of the PURC, Mami Dufie Ofori, said.

The statement announced the reduction as 17.4 % for Residential customers, 30% for Nonresidential customers, 25% for Special Load Tariffs Customers (LV,MV &HV), and 10% for Mines.

According to the PURC’s statement,  “the tariffs structure remains the same and, will be reviewed in 2019” and takes effect from March 15,2018.

PURC indicated that “Review of water tariffs require further consultations and the Commission is unable to announce a decision at this time. Water tariffs therefore remain the same and a decision will be taken in the coming weeks.”

Read the full statement below


The Public Utilities Regulatory Commission (PURC), after extensive stakeholder consultations, detailed technical analysis of utility tariff proposals and consideration of inputs and concerns of consumers, has approved utility tariff reductions for various electricity customer categories, effective 15th March 2018.

The Commission received tariff proposals from the utility service providers in the electricity and water sectors namely, Ghana Grid Company Limited (GRIDCo ), Electricity Company of Ghana (ECG), Northern Electricity Distribution Company (NEDCo ), Enclave Power Company Limited (EPCL) and the Ghana Water Company Limited (GWCL).

In line with Section 17(2) of the Public Utilities Regulatory Commission Act 1997, (Act 538) the Commission investigated the cost of production of all sources of supply of electricity to the distribution utilities.
As prescribed by law, the Commission’s decision-making process includes but is not limited to detailed technical analysis of tariff proposals and extensive stakeholder consultation, which were held to solicit views and inputs for the determination of the approved tariffs.

The Commission’s key objectives in this tariff review were:
• To ensure efficient and equitable tariffs; and
• To ensure that tariffs are relevant to the current socio-economic environment.
The following were the major considerations taken into account in arriving at the tariff decision:
• Consumer Interest

• lnvestor lnterest

• Economic Development

• Revenue Requirement

• Natural Gas prices

• Re-negotiation of Power Purchase Agreements (PPAs)

• Prudent and Efficient costs of the operations of the utility companies

The Commission also took into consideration the impending Private Sector Participation (PSP) Concession within the Electricity Distribution Sector.

The review process resulted in reductions in key utility costs. The reductions, which are based on PURC’s 2015 Gazetted Electricity Tariffs are only on the energy charges and range from 10% to 30%. Maximum Demand and Service Charges remain the same as that of the 2015 gazetted tariffs.

Effective March 15, 2018, the electricity tariffs summarised in Table 1 have been approved for the customer categories, depending on their level of consumption.

Table-1 Summary of PURC Approved Average Percentage Reduction in Tariffs

Customer Category PURC Approved Average Percentage Reduction

Residential Customers – 17.5% 
Non-Residential Customers – 30%
Special Load Tariff Customers (LV, MV & HV) – 25%
Mines – 10%

The tariff structure therefore remains the same and will be reviewed in 2019.

Review of water tariffs require further consultations and the Commission is unable to announce a decision at this time. Water tariffs therefore remain the same and a decision will be taken in the coming weeks. 
The Commission wishes to express its gratitude to all stakeholders for their input into the tariff approval process and will continue to monitor operations of the utility service providers to ensure value for money and quality of service delivery. The Commission will also continue to strictly implement its Automatic Adjustment Formula (AFF) in order to address changes in operational conditions.

The Commission’s full decision will be published in the gazette in due course and will be available on the Commission’s website: www.purc.com.gh

Signed

MRS. MAMI DUFIE OFORI
EXECUTIVE SECRETARY, 
PUBLIC UTILITIES REGULATORY COMMISSION

 

By: Charles Akrofi & Henryson Okrah/myxyzonline.com