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Why ECG is proposing 148% increase in electricity tariff

Consumers of electricity could pay more for power from August 2022, to intensify hardship in the country if the government does not intervene.

This is because the Electricity Company of Ghana (ECG) is demanding a 148% increase in tariff.

Reasons

A proposal from the power distribution company submitted to the Public Utilities Regulatory Commission (PURC), wants the adjustment to cover the period 2019 and 2022.

The ECG has subsequently proposed an average increase of 7.6% in tariff over the next four years to cover Distribution Service Charges (DSC).

ECG says the high increase in the Distribution Service Charges to the gap that has developed over the years between the actual cost recovery tariff and the PURC approved tariffs as well as the cost of completed projects.

ECG also he continual application of the prevailing tariff (which was a 14% lower) beyond the stipulated regulatory period and the effect of macroeconomic factors such as inflation and exchange rate fluctuation.

“The result of ECG’s tariff proposal for the next five years shows an approximately 148% increase on the current DSC1 in 2022 and an average increase of 7.6% year on year from 2023 to 2026. The high increase in the DSC1 for year 2022 could be attributed to the gap that has developed over the years between the actual cost recovery tariff and the PURC approved tariffs as well as the cost of completed projects”.

“Similarly, ECG’s proposed DSC2 shows a higher increase of 28.4% in first year (2022) while that of the subsequent years’ increases by an average of 2% from 2022 to 2026”, it added.

 

Source: Myxzyzonline.com|Ghana

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