VRA buys emergency power plant

Volta River Authority (VRA), the country’s primary energy producer, has as a short term measure made moves to acquire an Emergency Power Plant to address the shortfall in energy supply currently facing the country.

An official at the company’s head officer who dropped the hint said an agreement had already been signed since February this year with Lushann, a company in the United States to bring down the power plant.

VRA, according to the official is still awaiting information on the shipping of the plant from Lushann, which is expected to arrive in the country in June 2002.

The plant, which will be mounted on trailers and located at New Tema substation (former Cummins substation) will generate 110 megawatts power to augment the system generation. It will also be fired by fuel. VRA is expected to purchase the oil through contracts and Tema Oil Refinery (TOR) will provide storage for the plant. The five-unit plant will run on about 222,000 gallons of fuel a day.

Energy experts say, though the plant when acquired will improve the low voltage power supply, the ripple effects in terms of cost will be great. The company, B&FT investigations revealed is proposing for the Public Utilities and Regulatory Commission (PURC) a new tariff increment, which may have questioned the justification for such adjustment.

Some consumers and energy experts have asked whether VRA cannot maintain the existing tariff rates through this year because as they contend, power generated by the company is not enough to merit any increase.

But a senior official of the company has stated categorically that it would be extremely difficult for VRA to go through the year without any adjustment to the existing tariff rate.

What the VRA is asking for is just enough to meet the cost of generation and supply, adding it would enable them to buy all their light crude oil requirements to meet increasing demand.

The company needs about 21 cargoes of fuel amounting to about 180 million dollars. These funds the official intimated will come from both government and the banks, stressing that they need to recover the costs to continue operating.

VRA insiders said anything short off an adjustment would have to foot the bill one way or the other.

Observers believe that tariff increment should be government concern to enable development partners recognize the need to extend loans. Experts say one major strategic investors to buy utility companies such as Electricity Company of Ghana (ECG), is because consumers do not pay commercial rates for electricity consumption.

Energy experts are of the view that the NPP administration for dragging its feet on tariff increment for fear of consumer revolts.

But Senior Minister, J.H. Mensah ha stated that the PURC, the body responsible for tariff regulation will soon come out with new electricity tariffs, VRA generates 71 per cent of energy weekly from the Akosombo dam, 13 per cent from Kpong, 9 per cent from the Aboadze Thermal Plant and Cote d’Ivoire supplies the remaining 7 per cent. These figures vary because the current water level at the dam come nowhere near December 2001 water level of 249.38ft and that of year 2000 which stood at 261.80ft.