Residential consumers to pay between 0-42% increase for electricity

Accra, June 6, GNA - The Public Utilities Regulatory Commission (PURC) has reiterated that it undertook thorough analysis of the proposals submitted by the utility providers before arriving at the final tariffs. It said it took into account the social considerations of the impact of the new tariff on domestic consumers and low income earners. Speaking at a two-day Sensitisation workshop organised by the PURC, Dr Simons Akorli, Director of Regulatory, Economics and Research of the PURC, said residential consumers should be paying between 0 and 42 per cent for electricity depending on consumption and between 21 and 32 per cent for water.

"The Public Utilities Regulatory Commission wishes to reiterate that the highest percentage increase within the residential class of electricity customers is 42% and not 89% as being reported," he said. He said over 430,000 consumers, representing about 20 per cent of the customer base of the Electricity Company of Ghana and the Northern Electricity Development (NED) fell within the lifeline of 0-50 units and would not experience any increment, having considered their social and economic status.

The ECG and NED have a total customer base of about 2.3 million. With the adjustments, lifeline tariff for electricity consumers between 0-50 units remained unchanged at the rate of 9.5 pesewas per kilowatt-hour from the 2007 tariff adjustment.

However, consumers in the residential category of between 51-300 units have an increase of 42 per cent per kilowatt-hour, which translated into 17 pesewas up from the existing 12 pesewas/kwh. In addition, he said a lower percentage of 21 increase had been made for those who live in compound houses to reduce the impact of the high units that they accumulated because of the use of one meter. Dr Akorli said in arriving at the tariffs the PURC considered the total revenue required by the three utilities, which would enable them to provide efficient service to customers.

He said for instance, the three utilities namely the Volta River Authority, the Ghana Grid Company (GRIDCo) and Electricity Company of Ghana required a total revenue of 1.9 billion Ghana cedis this year to be able to generate, transmit and distribute power. Out of the amount, 1.2 billion Ghana cedis is what was required to generate, transmit and distribute power to the regulated market for the year.

Dr Akorli said out of this amount the regulated market which PURC used in computing the tariffs was 803 million Ghana cedis which the utilities required for the next seven months starting June 1, 2010 to December 31, 2010. "This amount was then allocated on the basis of how much it would cost to supply electricity to each customer class," he said. He explained that the average tariff of 89 percent was only an indication of the level of revenue that was required by VRA, GRIDCo and ECG to produce the quantum of electricity needed by consumers.

On water, Dr Akorli said domestic consumers who previously paid 66 pesewas for 220 gallons would now pay 80 pesewas for the same volume of water consumed representing 21 percent increase for residential users. Mr Stephen Adu, Executive Secretary of the PURC said the increases were to enable the utility sector to become viable to provide efficient and a more reliable service.

He said PURC would step up its monitoring system to ensure that the utility service providers adhered to the benchmarks and performance targets set for the utility providers (water and electricity). He said in default of the targets, they would be made to suffer penalties and sanctions.

Mr Adu expressed the hope that once natural gas, which cost was relatively lower than crude oil, currently used for thermal generation came on stream, the cost of generating power would go down and this would be factored into the determination of the tariffs. He urged consumers who had problems with the utility services not to hesitate to come to the PURC for redress. 6 June 10