Saturday, 22 June 2019

Ghanaians to pay 11% more for electricity

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Adnan Adams Mohammed

The Public Utilities Regulatory Commission (PURC) has approved an 11.17% tariff increase for electricity from July 1, 2019.

The increase is to help the recovery of total electricity revenue requirement for the regulated electricity market, PURC explained in a press release issued, last week.

This means that, the domestic and industrial consumers of electricity in the country are to expect an upwards adjustment in their bills by not less than 11% as per their threshold.

“This 2019-2020 Major Tariff Review Decision is the outcome of prudent cost review and effective monitoring undertaken by the Commission. Details of the approved electricity tariffs and the rationale for the decision will be published on the Commission's website,” the statement announced.

The statement further stated that, “In taking the above decisions, the Commission received and considered tariff proposals from stakeholders including the following utility service providers in the electricity and water sectors: Volta River Authority (VRA), Ghana Grid Company Limited (GRIDCo), Electricity Company of Ghana (ECG), Power Distribution Services (PDS) Ghana Limited, Northern Electricity Distribution Company (NEDCo) and Enclave Power Company Limited (EPC).

“In line with the Commission's regulatory oversight mandate, extensive technical and financial analyses of the proposals were undertaken. 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,” PURC said.

According to the Commission, as a major policy shift aimed at enhancing the competitiveness of Ghanaian industries, it has eliminated the Maximum Demand Charge on industrial customers (Special Load Tariff-SLT Customers). It is expected that this policy will result in some 5LT customers experiencing savings in their overall electricity bills.

The Commission has also received a tariff proposal from the Ghana Water Company Limited (GWCL) but is yet to announce its decision.

In February this year, the PURC announced that the new electricity tariff would take effect from July 1, 2019, following a mandatory major tariff review consultations in January this year.

In a press statement issued on February 27, 2019, the Commission explained that its decision to postpone the announcement of the tariff to July was due to critical emerging issues in the sector which are expected to affect the final tariff setting.

Among others, it cited the emerging issues are related to the planned relocation of the Karpowership Plant resulting in fuel switch savings from Heavy Fuel Oil (HFO) to Natural Gas.

The Commission also cited reductions in the price of natural gas are anticipated due to ongoing negotiations by the government as the reason for the postponement.

These matters are outside the purview of PURC but their outcomes are likely to have a measurable impact on the Commission's decision.

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