The Executive Secretary of Ghana’s Public Utilities Regulatory Commission (PURC), Mami Dufie Ofori, has stated that consumers would have paid more than the 11.17% tariff increase had government not reviewed cost of power generation.
Additionally, some efforts by power companies to introduce efficiency in their services also influenced the decision of the Commission to set the tariff at 11.17%.
“The figures they brought (government) was factored into our decision. If we had gone by the last year’s figure, then, the tariff would have gone higher than what we announced,” she said.
The PURC, last week, announced that effective July 1, 2019, electricity tariff in the country would increase by 11.17%.
According to the PURC, the decision was taken after careful consideration of proposals by the various stakeholders in the power sector.
The increment has, however, not gone down well with a section of the public, with some Ghanaians describing the increment as insensitive.
Addressing the media on Monday, 24th June, 2019, Mami Dufie Ofori highlighted on key indicators the Commission looked at before increasing the electricity tariff.
“In arriving at this decision, the PURC took into consideration several issues, and key amongst them are the ECG/PSP Process, Projected Inflation Rate, Ghana Cedi/US Dollar Exchange Rate, Prudent Cost of Operation of Utility Companies, Projected Electricity & Water Demand for the 2019-2020 tariff period,” she listed.
She explained that the key objective of the tariff review was to sustain the financial viability of utility service providers, as well as ensuring delivery of quality service to consumers.
“The key assumptions underpinning the determination and approval of the tariffs for the regulated market are as follows: Electricity, 2019-2020 Electricity Supply Plans, Generation Mix of 23% Hydro and 77% Thermal, Ghana Cedi-US Dollar Exchange Rate of GHS5.05/USD 1.00, Projected Inflation Rate of 8%, Projected Fuel Prices, Expected Increase in Electricity Demand, Transmission System Losses of 4.1%, Expected Increase in Volume of Electricity to be Transmitted of 8.6%, Base Distribution Aggregate Technical & Commercial Loss Ratio of 22.6%, Provision for Uncollectible Revenue of 2%, Water, Electricity Cost, Cost of Chemicals, Ghana Cedi-US Dollar Exchange Rate,” she explained.
“The Commission will continue to monitor the impact of this policy change on the utilities and customers,” she assured consumers.
The 2019-2020 Major Tariff Review Decision is the outcome of prudent cost review and effective monitoring undertaken by the Commission.
It is, therefore, expected that the utilities would be able to cover their Administrative, Operations and Maintenance Costs, resulting in the provision of quality utility services for consumers.
The Commission reiterated its unwavering commitment to ensuring the sustainability and growth of quality electricity and water service provision for socio-economic development.
Details of the approved electricity and water tariffs effective July 1, 2019, and the rationale for the tariff decisions would be published on the Commission’s website.