Utility companies react to tariff increases

The utility companies on Saturday said although the tariff increases granted them by the Public Utilities Regulatory Commission (PURC) was far below what they expected, they would abide by them.

The Ghana Water Company Limited (GWCL), the Volta River Authority (VRA) and the Electricity Company of Ghana (ECG) sought to increase tariffs by more than 300 per cent to forestall loses being incurred.

Under their proposed rates the VRA demanded 432 cedis per kilowatt-hour of power supplied while the ECG demanded 356 cedis per unit as distribution charge.

The unit charge for electricity was 95 cedis. The GWCL also demanded 100 cedis for a bucket of water,up from 24 cedis.

However, following public hearings and public outcry over quality of service by the companies, the PURC granted the ECG an average of 103 per cent increase and the GWCL, 96 per cent.

With the increases, the lifeline tariff for electricity effective May increases from 4,000 cedis to 7,500 cedis while that of water moves from 500 cedis to 990 cedis for lifeline.

Mr Eric Yankah, Deputy Chief Executive in charge of Corporate Planning and Finance of the VRA, told the GNA, in an interview that the percentage increase is clearly low but his company is yet to assess the impact on operations to give a definite position on the increases.

He noted that with the low level of tariffs, VRA would have to work out how to make up for losses to be made under the new tariff, saying, "even if we want to protest, it must go along with the directives given us."

The PURC in granting the tariffs, also directed the VRA to enter into a contract with the Electricity Distribution Utilities (ECG and NED) for the supply of "firm capacity and associated energy".

This, the Commission believes, will assure the distribution utilities of uninterrupted power supplies. The directive also called for an internal restructuring to be carried out to enhance efficiency in the operations of the utilities in accordance with government policy for the power sector.

On his part, Mr Christian Tetteh, Director of Finance of the ECG said although the PURC did not meet their expectation, they would work to achieve a margin over the purchase of power from the VRA.

"We will also have to cut down on operation costs and prioritise projects earmarked for the year.

"We will also have to work out a plan with the government to reschedule our debt payments and servicing commitments," he said.

He assured consumers that the ECG would do its best to improve on its services and asked them to be patient since it would take some time to generate the expected revenue to discharge quality service.

Mr Jonathan Ahele Nunoo, Acting Managing Director of the GWCL, said he would accept the challenge that the new tariff poses, especially, in the face of PURC directives to improve on service delivery.

However, he said, the ability of the company to deliver quality service is tied to the continuous supply of power by the ECG at its pumping stations.

He called for an intensive public education on operations of the utility companies to enable the public to understand how the services are produced and distributed.

Mr Nunoo advocated the use of rainwater in watering flowers, washing of cars and flushing of toilets to supplement treated water, saying, "the public must be aware of the need to preserve water."