If the proposed 148 percent increase in tariff is approved, the Electricity Company of Ghana (ECG) has promised that charges will not be increased by more than 10% year on year for the next five years.
ECG has been chastised for demanding a 148 percent raise for the year 2022, but the business claims that it will help them dramatically cut losses.
“We don’t blame the Public Utilities Regulatory Commission for not allowing us to raise rates over the years, but as a utility service provider, it’s hurting our bottom line.”
When you add up all of these small increases over time, you have a huge disparity between the current tariffs and what we’ll term a cost recovery tariff.
“The tariff has been significantly decreased,” says ECG’s General Manager for Regulatory Management, Sylvia Noshie.
She was addressing at a PURC-sponsored stakeholders’ consultation gathering for the multi-year comprehensive tariffs review.
The corporation claims that it will only be able to recover its losses if its petition for an upward adjustment is accepted.
“The only quarter adjustment we’ve had in the recent five years was on October 1, 2019, and it was only 0.47 percent.”
Regulators just granted a 14 percent drop in the previous rate approved in March 2018, which is unfortunate for us.
This has been the pattern for a long time.
Slyvia Noshie noted, “Normally, we will come up with our distribution cost and plan, but what you get the Commission to approve is really small.”
Apart from requesting a 148 percent increase in tariffs for 2022, the Electricity Company of Ghana is also requesting that the PURC grant it permission to levy street light tariffs to consumers.
“The ECG is also recommending to the PURC that a street light tax be implemented.
The Ministry of Energy estimates that the annual cost of street lights is 108.65 million dollars.
Currently, we all see the public light levy on the bill, which accounts for 30% of the total cost.”