Ghana’s economic regulator for electricity and water tariffs, Public Utilities Regulatory Commission (PURC) on Wednesday commenced a nationwide tariff education at the tertiary institutions in the West African nation beginning from the University of Ghana, Legon, in Accra, capital of Ghana.
The programme which was held at the West Center for Cell Biology of Infectious Pathogens, University of Ghana attracted a number of students and some staff of the school.
The objective of the tariff education is to educate the students across the country on the role of the commission in setting electricity and water tariffs for consumers.
The Executive Secretary of PURC, Dr Ishmael Ackah, in his presentation, said it was necessary to engage the students because they are also consumers of electricity and water utilities.
Dr. Ackah explained that one of the mandates of the Commission is setting tariff for both electricity and water utilities service providers, stating that the purpose of setting the tariff is to prevent natural monopoly by the service providers, a situation where the service providers take advantage of changes and increase tariffs.
Dr Ackah mentioned that the Commission undertakes two tariff decisions, namely Major Tariff Review and Quarterly Tariff Review, explaining that the Major Tariff Review is done every three years while the Quarterly Tariff is done every quarter of the year.
Answering a question on why there is the need for tariff review, Dr Ackah said the objective is to enable the utilities service providers to recover their investments.
In arriving at a tariff decision for electricity and water, Dr Ackah said the Commission looks at factors such as the price of natural gas, which is always in US dollars, the exchange rate, the hydro-thermal mix and inflation.
Giving a detailed explanation on the recent 2nd Quarter Tariff Decision, Dr. Ackah noted that the electricity utility service providers were to recoup GH¢1.31492 billion in order to remain financially viable and survive the next quarter.
To recover this, Dr. Ackah indicated that the tariff should have been 27.51 per cent, but only Gh¢877.70 million was recovered in the tariff, leaving a balance of Gh¢437.22 million.
For the water, he said the amount that was to be recovered hovered around Gh¢650,267,161.
In the view of the Commission, the 2nd Quarter Tariff Decision of 18.36 per cent for electricity helped to fully recover 100 per cent of the inflationary effect, 100 per cent of the gas price effect and 50 per cent of the exchange rate effect over the period.
Dr. Ackah also used the opportunity to respond to questions from the students.
He also used the opportunity to announce the PURC Electricity Consumption Estimator which allows consumers to know their electricity consumption in kWh and in Ghana Cedis.
Source: https://energynewsafrica.com