Gov’t Reaffirms Reduced Tariffs Despite High Proposals

Government is optimistic of a reduction in the cost of electricity for the rest of this year.

The optimism comes despite proposals for an increase in utility tariffs by service providers.

This also follows a stakeholders’ forum ahead of the announcement of new tariffs by the end of this month.

The average 14 percent reduction in the cost of electricity for businesses is expected to take effect with the announcement of new electricity tariffs by the Public Utility Regulatory Commission (PURC).

But the proposals put forward by the utility service providers point to an increase in tariff.

The requests from the ECG, GRIDCo and the Northern Electricity Development Company (NEDCo) ranged between 31 and 200 percent.

For the utility service providers, the need to improve efficiency warrants the proposed increases.

The Managing Director of the Ghana Water Company Limited, Ing. Dr. Clifford A. Braimah justified his outfit’s proposals.

“We are paying from our operation cost because it is take or pay; but as we have shut the desalination plant, we are saving the cost of electricity which is about 3 million cedis a month,” he said.

Minority doubts reduction

The Minority Spokesperson on Mines and Energy Committee in Parliament, Adam Mutawakilu believes that the earlier announcement by the Executive is a possible affront to the independence of the PURC.

He however maintains that the reduction could only be effective if it is reflected in the price calculations of the power producing companies such as VRA and Bui Power Authority.

“What I have today is transmission and distribution and they are all geared upwards; if I get the generation figures and they are also geared that way, then I can make a concrete informed decision and maybe communicate that what we are seeing would point to an increase,” he told Citi Business News.

Gov’t hopeful of reduction

Meanwhile a highly optimistic Chairman of the Mines and Energy Committee of Parliament, Emmanuel Akwasi Gyamfi tells Citi Business News the expected reduction in the cost of gas to businesses should translate into a reduction in the cost of power.

“If the savings that government is working on doesn’t happen, then the utility service providers will go ahead with the provision of the services based on their proposed figures. But if what government is recommending to the PURC becomes fruitful, then the cost of production of power will come down and that will affect all the utility service providers,” he asserted.

The Technical Committee Chairman of the PURC, Ishmael Egyekumhene is however hopeful of realistic tariffs by the end of February 2018.