Blame unfavourable past power agreements for utility hikes – Energy minister

Energy minister, John Peter Amewu, has expressed his displeasure at the stifling effects of unfavourable past power agreement in the energy sector.

This, the sector minister says, causes a hike in utility prices for consumers.

Speaking at the 3rd edition of the Ghana Energy Awards in Accra, the Peter Amewu explained that the wasteful expenditure in the energy sector is one of the main causes of increases in end-user electricity tariffs, making Ghana uncompetitive for manufacturing.

He also stated that, “the country has enough generation but there is a difficulty because we need to pay for powers that have not been dispatched. This means that the cost of socialization is borne by the poor consumers.”

He mentioned that the higher cost of socialization has a direct effect on utility pricing. According to him, most power agreements signed by the country binds it to pay for unconsumed energies.

The energy minister noted that government is putting in place measures to address the challenges facing the energy sector.

Resolution

The Minister for Finance, Ken Ofori-Atta, in his mid-year budget review indicated that starting August 1, 2019, government will cancel all existing power-purchasing agreements which require that the country pays for power which it does not consume.

“Government is to pay for energy and gas that we actually consume. All Take-or-pay contracts will be renegotiated to convert to Take-and-pay for both PPAs and Gas Supply Agreements (GSAs). Government will seek Parliamentary ratification where appropriate”.

The country pays over half a billion U.S. dollars or over GH¢2.5 billion annually for power generation capacity that is not needed, the finance minister stated.