Public Utilities and Regulatory Commission (PURC) have increased Water and electricity tariffs by 21 percent and 27.15 percent in that order.
The new tariff increase is expected to take effect from Thursday, 1 September 2022.
Meanwhile, the increase came as a result of the proposal by the Electricity Company of Ghana (ECG) and the Ghana Water Company (GWCL) a few months ago.
Earlier per their proposal, ECG proposed an increase of 148 percent.
It also wanted tariffs adjusted by 7.6 percent on average between 2023 and 2026.
According to the ECG, the proposed increase was a result of the gap between the actual cost recovery tariff, the tariff approved by the Public Utilities Regulatory Commission (PURC) and the cost of finished projects.
In a tariff proposal presented to the PURC, the GWCL also proposed an increase in tariff to enable it to recover its cost.
Both utility companies raised concerns about the PURC’s refusal to adjust tariffs to match the cost of their production.
“The financial sustainability of the Electricity Company of Ghana is important as it impacts on the entire energy sector. With the huge investment needs facing the distribution industry over the next five years, it is expected that the proposed tariff increases would inevitably be approved to sustain efficient and reliable electricity service,” the ECG noted.
It continued: “Overall, this tariff proposal indicates a high increase (148%) in the year 2022 compared with the subsequent years’ increases of an average of 7.6%. This high increase in 2022 is largely attributable to the cost of investment projects; the gap that has developed over the years between the actual cost recovery tariff and the PURC approved tariffs; the continual application of the prevailing tariff (which was a 14% reduction) beyond the stipulated regulatory period (2019-2020); and the effect of macroeconomic factors.”
The GWCL also noted: “It must at least recover its costs if we are to sustain our operations. Over the years, however, the approved tariffs have not been full cost reflective”.
“This has led to the inability of GWCL to raise enough revenue to finance the much-needed capital investment projects, with a consequent unsatisfactory level of service.”
Source: Apexnewsgh.com
