Ghana: PURC Justifies Increase in Utility Tariffs

The Public Utilities Regulatory Commission (PURC) has justified the recent increases in utility tariffs, saying it is critical to keep utility service providers in operation, amidst the current economic challenges.

According to the Executive Secretary of PURC, Dr Ishmael Ackah, the new tariffs would ensure that the utility service providers were financially viable and efficient.

He said, for instance that electricity service providers would need GH¢1.3 billion while suppliers of water would need GH¢650 million, to operate and function effectively.

Dr Ackah said this at a training programme on regulatory and policy issues for members of PURC's Media Fellowship, in Accra, last Saturday.

The PURC last Wednesday increased the average end-user tariff for electricity by 18.36 per cent across board for all customer groups, effective June 1, this year.

Dr Ackah explained that the decision to increase utility tariffs had been necessitated by the price of natural gas, exchange rate, hydrothermal mix and inflation.

The PURC Executive Secretary said that the second quarter tariff decision of 18.36 per cent for electricity would help to fully recover 100 per cent of the inflationary effect, 100 per cent of the gas price effect and 50 per cent of the exchange rate effect.

Also, Dr Ackah said that the PURC had over the past five months spearheaded some innovations, including the publication of a Register of all Power Purchase Agreements (PPAs) in Ghana; the development of a Net Metering Reckoner, which enables customer-generators of electricity to determine their electricity chargers for imports and exports of electricity with the distribution grid.

"The Commission has also updated and published the 2022 - 2025 Electricity and Water Major Tariff Review Decision Paper which provides the rationale underpinning the major tariffs and includes the prices of all power plants in Ghana," he added.

Dr Ackah said the PURC had established a state-of-the-art Water Laboratory to test, guarantee and enhance the quality of potable water supplied to homes.

He said the Commission was also taking steps to address the issue of distribution losses of electricity and water utilities.

"To this end, the Commission has put in motion a Loss Reduction Strategy initiative in collaboration with other key stakeholders, to complement the efforts of the utilities in their loss reduction drive. This would subsequently enable the implementation of key measures that will help both the electricity and water sectors achieve a reduced loss figure," he said.

Dr Ackah gave the assurance that the PURC would continue to work effectively to promote a financially sustainable energy and water sector.

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