Minority rejects 26% Hydro mix used in tariff adjustment for electricity

The Minority in Parliament has expressed worry about the 77 percent hike in electricity tariffs for residential customers taking effect from 1st February 2023.

According to the Minority, the Public Utilities Regulatory Commission should have considered the prevailing economic conditions in order to inform their decision for the huge increment.

In a statement signed by the ranking member on Energy and Mines Committee, John Jinapor further stated that the tariff adjustment leads to almost 77% increment in less than 6 months.

“A critical look at the tariff structure as announced reveals that all residential customers who consume between 0-300 kWh have witnessed a jump from GHp/kWh 65.4161 to GHp/kWh115.72, representing an almost 77% increase in price since September 2022.

“It should be noted that the bulk of residential customers falls between 0-300 kWh band and will therefore be adversely affected by the almost 77% price increment,” Jinapor stated.

He continued: “We also note that the increment is on account of the worsening Ghanaian currency (Ghana Cedi) against other major currencies. Recently, the Cedi has witnessed a free fall with the local currency rated as the second worst performing currencies in the world.

“Already, inflation is galloping and getting worse by the day, with the current rate estimated at over 50%, and therefore, this increment will only exacerbate the current high cost of living. This will automatically worsen the plight of the already impoverished Ghanaian.”

The ranking member stated that the Minority has noted the attempt by the PURC to skew the generation mix in favour of thermal power as against hydro to create an unfair price hike to the detriment of consumers.

“It must be stated that the PURC is not the technical regulator hence, cannot arbitrarily skew the thermal/hydro mix contrary to the projections by the Energy Commission, which is the technical regulator of Ghana’s energy sector.

“From the available data, all the 3 hydro dams have witnessed very high elevations at the beginning of 2023 and are therefore in better positions to produce more hydro electricity compared to the previous years. We are confident of hydro generating not less than 35% based on the Energy Commission’s projections. We, therefore, reject the 26% Hydro mix used in computing the recent tariff adjustments.

Jinapor said the Minority is therefore demanding the PURC to refrain from such unorthodox methods, “which, by all intends and purposes, is a back door approach to meet the IMF conditionalities in the energy sector.”