ECG’s 225% tariff proposal sparks concern over power costs

The Electricity Company of Ghana (ECG) has submitted a proposal to the Public Utilities Regulatory Commission (PURC), requesting a 225% increase in its Distribution Service Charge (DSC1).

If approved, the charge would rise from GHp19.0384/kWh to GHp61.8028/kWh for the 2025–2029 regulatory period.

ECG argues that the increase is critical to prevent financial collapse and to deliver a more reliable and efficient power supply to its 4.87 million customers, who make up over 73% of Ghana’s population.

The company describes the current tariff as financially unsustainable, noting that the DSC1 represents only 11% of the total electricity value chain cost—far below the global benchmark of 30–33%.

Additionally, ECG stated that the cedi’s depreciation of approximately 74% between 2022 and 2024 has eroded the real value of its revenues by 45%, putting immense pressure on its operations.

In its proposal, ECG outlines a detailed investment plan aimed at significantly improving service delivery.

The utility has already spent US$408 million since 2022 on upgrading infrastructure, including new substations, system automation, and the deployment of over one million smart meters.

With the proposed tariff increase, ECG aims to continue these investments and reduce the frequency and duration of power outages across the country.

According to the company’s projections, the System Average Interruption Duration Index (SAIDI) is expected to decline from 32.5 hours in 2024 to 19.2 hours by 2029, while the System Average Interruption Frequency Index (SAIFI) is forecast to drop from 16 to 9 within the same period.

System losses are projected to fall from 27% to 22%, and revenue collection efficiency is expected to improve from the current 87% to over 90%.

To address long-standing customer concerns around billing and service quality, ECG plans to deploy an additional three million smart meters and has pledged to replace all faulty meters at no cost to customers.

The company also promises faster resolution of complaints and a more stable voltage supply.

It is encouraging greater use of its digital platform, the ECG Power App, which allows customers to buy credit, check balances, and lodge complaints without having to visit a physical office.

ECG maintains that a cost-reflective tariff is essential to its long-term viability and to freeing the company from reliance on government bailouts.

According to the utility, redirecting bailout funds to other national priorities, such as healthcare and education, would serve the public interest more broadly.

The PURC is now reviewing the proposal and is expected to conduct public consultations before reaching a final decision.

Any approved changes to the tariff will only take effect after a formal public announcement.