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Cost of Tariffs Utility service providers want 200% tariff increase

The Chairman of the Technical Committee of the PURC, Ishmael Egyekumhene, said they must assess the request carefully especially considering government’s commitment to reduce tariffs.

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Utility service providers in the country are demanding that their tariffs are increased by 200%.

This is coming despite President Akufo-Addo’s assurance that utility tariffs would rather be reduced.

The utility companies made this request when they met the Public Utility Regulatory Commission (PURC) in a Joint Consultative forum in Accra.

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In an interview with Accra-based Citi FM, the Chairman of the Technical Committee of the PURC, Ishmael Egyekumhene, said they must assess the situation carefully especially considering government’s commitment.

“All of them are asking for significant increases in the tariffs. That even makes our work more difficult because already the Executive [President] has actually gone ahead to announce some tariff reduction. I’m sure you just listened to the NEDCo presentation; the figure they are asking for translates to about 200% increases in what was approved for them in 2015. So all of them are pointing upwards, they are asking for more money, but it’s our responsibility to start interrogating all the cost centres because, at the end of the day, they have what they call, revenue requirements which goes into how much money they need to be able to run the systems.”

Mr Egyekumhene said cost is a major factor in considering the total revenue requirements.

Energy Minister play

The Minister of Energy, Mr Boakye Agyarko

 

“We are looking critically at the cost right from generation to transmission and distribution. If we are only to base the analysis on the exchange rate and inflation, there is every justification for the tariffs to go up.”

President Nana Addo Dankwa Akufo-Addo had on January 15, 2018, announced an average of 14% reduction in electricity tariffs for non-residential users in the country with effect from January 2018.

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“From January this year, the non-residential tariff rate, which is the rate which includes all of you here, is being reduced by an average of 14%. For barbers, it is being reduced by 18%; for hairdressers and beauticians, 15.7%, and for tailors, 9.8%,” he added.

The government had earlier proposed to the PURC to reduce electricity tariffs in the country.

Before the government made this proposal, it promised to reduce electricity tariffs by between 13 and 21 percent for residential consumers and industry respectively.

The PURC’s meeting with stakeholders in the sector was to among other things negotiate and determine a reduction in tariffs for businesses.

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