Electricity and Water tariffs to go up in January 2014

• Posted on December 16, 2013
• by Nana Kwesi Coomson
• Comment

Consumers of water and electricity should brace themselves for yet another increase in utility tariffs which would take effect from the first of January 2014.

This was disclosed by the Public Utility Regulatory Commission (PURC) which says it has started the full implementation of the Automatic Adjustment Formula (AAF).

Factors that influence the Automatic Adjustment Formula include price of crude oil on the international market, the cedi-dollar exchange rate, rate of inflation amongst others.

It would be recalled that the PURC announced a tariff increase of over 78 percent for electricity and 59 percent for water, after a major tariff review in October.

Confirming the tariff increase to Citi News, Director of Public Affairs of the PURC, Nana Yaa Jantuah said the tariff increase would now be on a quarterly basis.

She indicated that “by first January certainly we’re going to see some form of increase in the tariff using the automatic adjustment formula because the factors that underpin the Automatic Adjustment Formula are going up.

“If you look at the exchange rate, if you look at the CPI [Consumer Price Inflation] it’s also going up. Although the price of crude oil that is used to generate electricity remains the same, there is going to be an increase in the load from consumers especially as we enter the yuletide.

“This would mean that VRA for example would have to generate more to meet the demand and by so doing they have to acquire more crude oil since there isn’t enough gas too.

“Due to the unavailability of gas also, there’s going to be more dependence on thermal and the generation mix is going to change. So certainly there is going to be an increment in the utility tariffs.
“We do not know the percentage yet but it would certainly go up.”

Before the last major tariff review, several labour unions and stakeholders called for the total dependence on the Automatic Adjustment Formula which gives the PURC the mandate to review tariffs on a quarterly basis.

This according to the unions and stakeholders would give marginal increments in tariffs rather than the huge onetime payments; with a typical example being the last major tariff review in October, 2013 which caused a major public uproar.



By: Martin Asiedu-Dartey