Utility tariffs likely to go up in July— IES

Electricity and water tariffs are likely to go up in July this year, the Institute for Energy Security (IES) has projected.

Nana Amoasi VIII, Energy Analyst and Executive Director of the Institute, said “from all indications, there will be an upward review of the current tariff.”

He said: “We must brace ourselves for electricity tariff increment so we can save both the distribution and transmission grid from collapsing and have some reliable power supply.”

He added that: “It’s quite unfortunate that it has become a pressing issue to bite at this time when Ghanaians are going through tough times, but it’s still necessary to pay a little more for the utilities to invest to save the grid from collapsing.”

The Energy Analyst noted that Ghana had not seen any major tariff increases in the last seven years, yet the operational cost of electricity continued to rise, hampering the work of utilities.

He was of the view that if electricity consumers were not made to pay a little more to enable the service provider to invest, “… the power system may collapse…”

He said: “Between 2015 and now, electricity tariff has not seen any significant rise. Meanwhile the operational cost of the utilities have been rising year on year partly due to foreign exchange losses through obsolete equipment and power lines, and increasing cost of borrowing to finance their operations.

The IES Executive Director called on the Electricity Company of Ghana (ECG) and Northern Electricity Distribution Company (NEDCo) to be prepared to work more to stop the increasing commercial loses they incurred.

He said: “They should make sure that the sacrifices that Ghanaians are being asked to make by paying more for electricity in such a challenging time reflect an increase reliability in power supply within the shortest possible time.”

Dr Ishmeal Ackah, Executive Secretary of the Public Utilities Regulation Commission (PURC), told the Ghana News Agency that the Commission, together with key stakeholders were reviewing the country’s electricity and water tariffs.

He said as to the current tariff being increased, reduced or maintained: “We’re all asking the same question.”

The tariff review will consider issues, including cost of production, exchange rate, cost of fuel, investment requirements, and the ability for the utilities to meet benchmark targets set by PURC – mainly, customer satisfaction.

Utility service providers are said to have submitted proposals based on guidelines developed by PURC, with an expected public hearing this week, where the service providers will present a case for their request for tariff adjustment.

PURC said it had commenced analysis of the proposals from the service providers and that consultations will be conducted with industry experts before the announcement of tariff in July.