Utility companies appeal to public to bear with proposed service tariff hikes

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Madam Sylvia Norshie, General Manager, Regulatory Management of the ECG,
Madam Sylvia Norshie, General Manager, Regulatory Management of the ECG,

Major utility companies in the Country have appealed to the public to bear with proposed service tariff hikes.

Officials of the Electricity Company of Ghana (ECG), and the Ghana Water Company Limited, have pointed to the current global economic downslide and the influence on operations in asking for more than double of present service charges.

The ECG, defending its proposed 148 per cent tariff increment over five years at a public hearing in Ho, called attention to the multiplying cost of reserve power plants and other input, as well as high forex losses.

Madam Sylvia Norshie, General Manager, Regulatory Management of the ECG, said the Company had spent more than 150 million dollars on reserve power plants in 2021, while forex losses surpassed 500 million cedis, and that while counted among costs of ensuring stable power supply, revenue generated had been unable to absorb the spend.

She said the Company had projected 839 million dollars to be invested in projects towards reinforcing existing power networks, expanding coverage, and improving general services, and therefore the proposed annual tariff increase of 7.6 percent would help advance the planned initiatives.

The regulatory management head stated that the current distribution service charge was “very inadequate”, and that the Company still operated on a 2019 approved tariff.

“The revenue has shrunk, and it has impacted on ECGs operational quality. The tariffs do not meet the cost of running business and we are now advocating for a full cost recovery tariff,” she stated.

Ms Norshie assured us that the Company was looking to improve its revenue target and would consider using third parties to recover losses and deploy more prepaid meters for prompt realization of revenue.

She said measures were also being installed to improve billing systems and bill deliveries as part of efforts to solve the prevailing challenge of system losses, and which included the deployment of task forces against illegal connections, and the use of criminal prosecutions as a deterrent measure.

She assured us also that the Company was working to properly define its customer classifications and produce a base cost to enable effective streetlight billing.

“We need to change the tariff structure to enhance customer understanding,” she said while revealing planned cross subordination among customer groups, and added, “gradually, customers will pay for how much it costs the utility company to provide services to them”.

Initiatives and projects earmarked by the Company include the expansion of service centers and district offices, charging stations for electric vehicles, and drone surveillance of its power distribution infrastructure.

Ongoing projects include 101 distribution systems improvement projects across its service zones, and eight district offices.

Officials from the Ghana Water Company, which has tabled a 300 per cent tariffs increment over the period, said the pollution of water sources affected treatment costs by 50 per cent, and said an upward review of tariffs would help maintain supply quality and expands access to more communities.

The public hearing was organised by the Public Utilities Regulatory Commission (PURC) and held at the JM Afeti Auditorium of the Ho Technical University.

It was attended by over 500 individuals including Chiefs, heads of institutions, entrepreneurs, and activist groups, and offered the opportunity for scrutiny of the proposed tariffs, and for both local and national leaders of the utility companies to address consumer concerns.

Dr Ismael Ackah, Executive Secretary of the PURC, said the multi-year tariff would help promote quarterly adjustments based on external factors such as inflation, towards ensuring service sustainability and affordability.

He added that the PURC was taking audits of projects of utility companies to help ensure more prudent costs to consumers.

Dr Ackah mentioned also that the Commission had noted public concerns around customer service, and thus a regional customer service clinic project had been initiated to scrutinise services and systems.

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