Utility providers seek over 200% tariff increase

GWCL is seeking 124% increase in its tariff from Ȼ1.78 for 120 gallons of water (5 barrels) to Ȼ4 for 120 gallons of water.

When the increases being sought by ECG, VRA and GRIDCo are computed together; it will increase electricity tariff from 44,50 -pesewas per kWh to 102-99 pesewas per kWh, representing over 100% increase in tariff.

For electricity, ECG is seeking 101% increase; VRA wants 108% increase while GRIDCo seeks 31.26%, and if the three are computed it will result in over 100% increase in electricity tariff.

The Public Utilities Regulatory Commission (PURC) is to scrutinise the proposals and determine what increases the utility providers deserve.

VRA has proposed that its current 14.6 pesewas per kilowatt hour of power generated should be increased to 30.34 pesewas, representing 108% increase.

On the other hand, ECG is seeking approval from 16.45 pesewas to 35.5 pesewas per kilowatt of power while GRIDCo wants its 4.0453 pesewas per Kilowatt hour of electricity increased to 5.31 pesewas per kWh, an increase of 31.26%.

At the first stakeholder engagement organised by the PURC on major tariff review, which takes place every two years, ECG, VRA, GRIDCo and GWCL made presentations to journalists on why they needed the increases.

Mr Kofi Ellis, Planning and Business Development Manager at the VRA, in his presentation, listed some projects aimed at adding more megawatts to the national grid in the short term.

He noted that by the year 2030, demand for electricity could rise to 5,000 MW in a case of low demand while high demand situation could rise to 9,000MW.

He explained that total power to be generated by Independent Power Producers (IPPs) that have shown interest in Ghana's power sector amounts to 5,699MW.

He noted that the current tariff levels are not attractive enough to the IPPs.

According to him, it costs 26 pesewas to buy fuel to generate one Kilowatt hour of electricity while Ghanaians currently pay 14.6 pesewas per kWh.

Therefore, Mr Ellis said, 30.34 pesewas per kWh was necessary to enable VRA cover the cost of producing power.

Mr Ebenezer Baiden, member of ECG tariff team, also explained the various projects being undertaken to improve its operations.

He said the increase was needed to enable ECG serve customers better, adding that as of June this year, ECG had recovered Ȼ95 million of its debts, saying the company is determined to collect all its debts.

Mr Baiden stated that ECG has invested Ȼ1.45 billion into major projects across it operational areas to improve service delivery.

He stated that ECG needed the increment to enable it pay for power purchases and the cost of existing and new power plants.

Kofi Owiredu, an economist at GRIDCo, outlined the numerous projects being undertaken, and explained that the company had taken loans and needed the increase to be able to pay back the loans.

Responding to questions on the power badges, he said work was nearing completion.

Kenneth Ennin, Commercial Manager of GWCL, said it has been tasked to take responsibility to raise money for its infrastructure development as against current practice where government funds its operations.

He said GWCL needs Ȼ698 million per year for expansion projects.

He explained that it costs Ȼ8 to produce 120 gallons of water (5 barrels) but GWCL sells that water for Ȼ1.78, making operating cost exceed tariff.

According to him, 48% of their revenue goes into paying electricity bills because their stations operate 24 hours.

He mentioned that the pollution of raw water sources by illegal miners means the company has to use more chemical to threat the water, resulting in high cost of operations.

This, he said is also destroying their pumps because highly polluted water cannot be treated by their machines.

Source: The Finder