Ghana’s Public Utility Regulatory Commission (PURC) has increased electricity and water tariffs by 59.2 % and 67.2% respectively for residential consumers in the country.
The Director of Public Relations at the PURC, Nana Yaa Jantuah noted in a statement: “The significant change and increasing dependency on thermal generation has greatly impacted on the cost of electricity generation and supplied by the Utility Service Providers.
“For Water Utilities, the adjustment in tariff is driven by Chemical Cost in addition to the Power Purchase Cost and Operation and Maintenance Cost for the Ghana Water Company,”
The PURC admitted that the increments were also necessitated by proposals it received in the middle of 2015 from utility service providers asking for an upward adjustment in tariffs.
The Volta River Authority (VRA), Ghana Grid Company Ltd (GRIDco), Electricity Company of Ghana (ECG) Northern Electricity Distribution Company (NEDco) had requested 128.6% increment while the Ghana Water Company asked for 400.2% increment.
“As mandated by law and the Commission’s decision-making process, extensive stakeholder consultations were held to solicit views and gather inputs for the final determination of in adjustment in tariffs.
Subsequent to a careful investigation of the proposals submitted by the Utility Service Providers and in considering the inputs of, and concerns of consumers and key stakeholders who were consulted, the Commission has approved utility tariff increases for various customer categories,” the statement said.
Factors considered by the Commission before approving the increments are: Consumer Interest; Investor Interest; Economic Development of the Country; The Generation Mix; Fuel Mix; Availability of the Service; Growth in Demand; Power Purchase Cost (IPP); Revenue Requirement (to ensure Financial Viability of the Utility Service Providers); Cedi Dollar Exchange Rate.
The commission announced that changes are expected to take effective from December 14, 2015.
The Commission said in arriving at a decision also took into consideration the social impact a full cost recovery would have on certain categories of consumers who need to be supported.
The statement also pointed out that tariffs alone cannot raise the needed capital for the utility service providers to operate effectively. “In this regard the Commission is urging government to continue sourcing funds to supplement the Tariff income for infrastructural purposes.”