Business News Thu, 8 Nov 2018
A former Deputy Minister of Power, John Jinapor, has accused the Electricity Company of Ghana (ECG) of unilaterally increasing tariffs by 33% and passing it on to consumers.He said the bulk generation tariff, which comprises Volta River Authority (VRA) charges and Independent Power Producers (IPP) rates, was pegged at a composite figure of 42.9 pesewas per kilowatt hour by the Public Utilities Regulatory Commission (PURC) in the gazetted tariffs released in March 2018.
The gazette, he said, was “in accordance with Act 538 of the PURC Act, as the PURC is the only entity mandated to gazette tariffs and ensure that it is passed on to consumers”.
However, Mr. Jinapor noted that “just recently, the ECG laid their work plan before parliament, which is also mandatory. When I checked and did the analyses, I realised that this amount (of the bulk generation tariff) has been increased by 33% to an amount of 52.7 pesewas per kilowatt hour”.
Mr. Jinapor explained that it translated into a “33% increase in the composite bulk generation tariff, which ultimately is passed on to you the consumer”.
Mr. Jinapor, who spoke to Class 91.3FM’s parliamentary correspondent Ekow Annan on Thursday, 8 November 2018, said when he enquired about the inflated charges, he was told the IPPs claim the new figure was so, in order to cushion them against depreciation of the cedi against the dollar.
For him, the charges are “illegal because, under Section 19 of the PURC Act, only the PURC has the mandate to announce tariffs. The PURC is also mandated to ensure that it rolls out the automatic adjustment formula”, which, he says caters to the exchange rate differentials, fuel price fluctuations and all the other charges.
He described the action by ECG as “fraudulent, illegal and an affront to the Constitution and parliament itself because parliament passed Act 538”.
The hidden charge increases, he said, have been going on since the second quarter of the year, and if compounded for a year, “It means that you the unsuspecting consumer will be paying GHS 1.58 billion within one year”.
The lawmaker is, therefore, demanding the immediate restoration of the initial tariff regime by PURC, and the monies that have been illegally charged, refunded to consumers.
According to him, the Minority picked intelligence that the “illegal backdoor activity” was undertaken “on the instructions of the Ministry of Energy during the tenure of Mr. Boakye Agyarko”.
The Minority, he said, will soon file a motion in parliament on the issue.
In the light of this, he said the announcement of a reduction in power tariffs in March 2018 by President Nana Akufo-Addo and Finance Minister Ken Ofori-Atta, was only a “ruse”. “It was only a Trojan horse and through the back door, they only went and increased this tariff in an illegal manner”.
Responding to the issue, the Chairman of the Mines and Energy Committee of Parliament, Mr. Emmanuel Akwasi Gyamfi described the claims as mischievous, indicating that ECG has absorbed the tariff hike.
“It is never true,” he exclaimed, adding: “It has never happened anywhere and I’m surprised our colleagues from the Minority are being disingenuous and mischievous about the issue”.
According to him, ECG made a case to PURC, and presented same to the committee in parliament, that: “PURC has approved 42.89 pesewas but in actual terms, they [ECG] are buying the power at 59 pesewas and they want the PURC to help them so that they will increase the tariff so that the loss can be taken care of”.
He, therefore, rejected the assertion by Mr. Jinapor that the tariff was already in force.
Source: Class FM