3 Utility Companies Propose 100% Tariffs Review For 2015

Three utility companies have called for a major tariff review, proposing more than a 100 per cent increment in tariffs for 2015. The Electricity Company of Ghana (ECG) wants the present tariff of 16Gp per unit to be increased to 35Gp, while the Volta River Authority (VRA) is demanding an increase from 15Gp to 30Gp per unit. The Ghana Water Company Limited (GWCL) is also proposing an increase from GH¢1.70 per cubic metre (1,000 litres of water) to GH¢4. The GRIDCo wants an increment of its present 4Gp per unit of transmission to 5Gp. The companies came up with the proposals at a public hearing organised by the Public Utilities Regulatory Commission (PURC) in Koforidua yesterday. The forum was part of the nationwide public hearings and stakeholder consultations to afford consumers and the public the opportunity to make inputs into and contribute to proposals for tariff adjustments being presented by the utility providers. The intention of the companies drew a lot of murmurs from the large crowd that attended the forum. The companies explained that their demand for an upward adjustment in tariffs had become necessary because of high operational costs. VRA In an explanation, Mr Kofi Ellis, the Director of Planning and Business Development of the VRA, said the authority needed 30,000 barrels of fuel to power about six generators a day. He said the importation of the fuel meant substantial resources were needed to run the operations of some of the utility companies. He said about 80 per cent of funds received from the PURC was spent on fuel, while the rest was expended on maintenance and other services. Mr Ellis, therefore, appealed to the public to bear with the VRA because of its precarious financial situation. ECG Mr Ebenezer Baiden, the Regulatory and Governmental Affairs Manager of the ECG, said current tariffs being charged were not enough to meet the company’s operational cost. "We need a lot of foreign exchange to import equipment and render quality service to consumers," he added. He said the company recently inaugurated a sub-station in Nkawkaw built at a cost of GH¢20 million to improve electricity supply to the area and nearby towns and villages. GWCL Mr Kojo Ennin, the acting Manager in charge of Market Operations of the GWCL, said in spite of efforts being made to improve its services, the company was still grappling with the issue of inadequate funds. He said last year it invested $768 million but that was not enough to expand its coverage as expected, since there was still a deficit between demand and supply. GRIDCo Mr Kofi Owiredu, a senior official of GRIDCo, said the company needed enough funds to transmit power to all parts of the country. Views of the public During the open forum, consumers complained about inadequate water supply to their premises and delay in the processing of forms for the extension of power and water. They appealed to the government to use the revenue from oil to improve the services of the utility companies. They appealed to the utility companies not to increase tariffs but rather endeavour to collect all debts owed them by both public and private institutions, particularly ministries, departments and agencies (MDAs) under government control. PURC on major tariff review Meanwhile, the PURC has said it is going through a major tariff review process which seeks to see a movement in the current electricity and water tariffs being paid by consumers. According to a statement signed by the PURC’s Director of Public Relations and External Affairs, Nana Yaa Akyempim Jantuah, and issued by the commission, as part of the process, it was going to conduct nationwide public hearings and stakeholder consultations which would allow consumers and the public to make inputs into and contribute to proposals for tariff adjustments. Additional generation She, however, told the Daily Graphic in Accra that the price of additional generation of electricity which was expected to improve the current load shedding would not be included in the existing tariff being paid by consumers. "A major component of this tariff exercise is that the price of these generating plants will be considered but only contingent on the fact that these plants will be in place at stipulated times of deployment," Ms Jantuah highlighted. She said the PURC would not just accept the proposals but approve tariffs that would be useful to the utility companies and affordable to consumers after stakeholder and public consultations. Tariff-setting process The tariff-setting process is made to go through a pre-filing notification, a preliminary review, public hearings, stakeholder consultations, among other processes. Decisions arrived at after the above processes are gazetted and published, using the mass media. Those processes, Ms Jantuah said, were put in place to enhance fairness, equity and transparency in the determination of utility tariffs.

Source: Daily Graphic