The Public Utilities Regulatory Commission (PURC) says all is set for the announcement of new utility tariffs for consumers of electricity and water in the coming days of this month (August).
The 2022 to 2027 multi-year major tariff announcement was expected to be
announced in June 2022.
But the PURC deferred it for further and broader consultation
process to solicit for more independent views, independent verification of
submitted projects and deeper consultations with key stakeholders across the
country.
That nationwide consultations by the commission on the proposals from the
utility companies are now over, and the PURC is set to announce the new
tariffs.
When announced, it will be the first tariff adjustment since 2017.
SMEs to be supported with new tariffs
The Executive Secretary of PURC, Dr Ishmael Ackah, at a press soiree in Accra
on Friday (August 12, 2022) observed that the new tariff would be used to support
businesses especially those in the small and medium enterprises (SMEs) space.
“All stakeholders have been consulted, the commission is finalizing and in the
next few days the new tariff will be announced.
“This year’s tariff will be business-friendly, especially for hairdressers and
barbers and other firms in the SMEs space,” he said.
Industry to no longer subsidize residential consumers
He noted that the 2022 tariff also seeks to gradually reverse the structure of
the country’s utility tariff where industry subsidizes residential consumers.
“We currently have a situation where industry pays higher tariffs than domestic
users. This is because we have a cross-subsidy inbuilt in the tariff
structure,” he said.
As a result, the Executive Secretary stated that PURC had reduced the
cross-subsidy and was gradually reserving the system where industries subsidize
domestic users.
He said this would make the industrial sector more competitive, enhance
operations and create jobs for the unemployed.
Presented proposals
The utility companies presented proposals to the PURC in May this year, based
on the regulator’s guidelines.
While the Ghana Water Company Limited (GWCL) proposed a 300 per cent increment
over its existing tariffs, the Electricity Company of Ghana (ECG) proposed 148
per cent, the Volta River Authority (VRA) proposed 37 per cent, with the Ghana
Grid Company Ltd (GRIDCo) proposing 48 per cent.
Other proposals were 38 per cent from the only private power distributor,
Enclave Power, and 113 per cent increase over the existing tariffs of the
Northern Electricity Distribution Company (NEDCo).
Punitive tariff bands
The tariff proposals were in line with policy directions to progressively
eliminate what has been described as “punitive tariff bands” that discouraged
consumption.
This included industry being made to pay higher to cushion residential
consumers, a situation which was adding to the cost of doing business and
making operations in the industrial sector costly.
The multi-year tariff adjustment, which will come with different rates of
increment over a five-year period, is also expected to enable the PURC and the
utilities to commit to the quarterly “automatic” adjustment system, support
industrial development and improve utility efficiency.
Graphic Online gathers the new tariffs adjustment may be around 20 to 25 per
cent.
Source: graphic.com.gh