PURC meets utility service providers today on proposed tariff increment

• Posted on May 11, 2022May 11, 2022
• by Nana Kwesi Coomson
• Comment

The Public Utility Regulatory Commission (PURC) is expected to hold a crucial meeting with utility service providers today, Wednesday on proposed tariff increment.

The Electricity Company of Ghana had proposed that its tariffs be increased by 148% for 2022 and with 7.6% average adjustments between the periods of 2023 to 2026.

The proposed sharp increment, according to ECG, is due to the gap between the actual cost recovery tariff and PURC-approved tariffs as well as the cost of completed projects.

The Ghana Water Company, in a similar document, is also proposing an increment in its tariffs to be able to at least recover its operational cost.

Some observers have said the amount consumers pay for electricity is woefully inadequate to sustain the operations of the ECG.

These proposed increments are coming at a time of great controversy over high cost of living and worsening inflation.

But the service providers maintain that the increment is necessary to keep them afloat.

The GWCL argues that while the average tariff per cubic metre in 2019 was 1.27 USD, the same was reduced to USD 1.13 as a result of cedi depreciation.

The GWCL argues that this has affected its ability to carry out repairs and replacements of aged and obsolete equipment and pipelines.

For the GWCL, the current domestic tariff of GHS3.29 per cubic metre to consumers within 0-5 cubic metres is less than what the poor in rural areas pay, which is about GHS10.

To justify its case for the increment, the Ghana Water Company Limited says it is saddled with a monthly loan payment of $7.93 million which is 47.15 percent of its average monthly revenue.

The GWCL says it has no option but to recover the loans through tariffs.

-Citi