ACEP Demands Clarity on Basis for Reducing Electricity Tariffs

The African Center for Energy Policy (ACEP) is urging the Public Utilities Regulatory Commission (PURC) to provide details on factors that influenced the margin of reduction in electricity tariffs.

ACEP argues its analysis proves that only the transmission service charge has been reduced while the bulk generation and distribution service charges have gone up for the period.

According to the PURC, the cost of electricity has dropped by between 17.5 and 30 percent for residential and commercial consumers for the tariff review period for 2018.

But the Executive Director of ACEP, Benjamin Boakye explains that the margin of reduction for the transmission service charge is even below the rate quoted by the regulator.

He tells Citi Business News there is the need for clarity to give consumers accurate and reliable information.

“It cannot result in that significant shift in electricity tariffs because all of the factors blend together to affect the tariff setting. So if you have two of the three key components going up and only one coming down marginally, it cannot result in the quantum of reduction that we see in the reckoner. And that is why we are calling for explanation to them so that we can be assured that we are not just reducing the tariffs and on paper, the companies will be struggling to raise the needed capital to finance their operations,” Benjamin Boakye stated.

The energy think tank also maintains that the PURC will need to give clarity as it believes other factors other than the negotiated capacity charges and fuel switching cited by the regulator, were the main variables that influenced the reduction in tariffs.