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Value for Money Ghana's electricity cost highest in West Africa - ACEP

According to the ACEP stressed that the move to increase tariffs amount to utility companies passing on their inefficiencies unto the Ghanaian consumer.

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The Africa Center for Energy Policy ACEP has challenge calls by government, utility providers and the Public Utilities Regulatory Commission PURC, that Ghanaians need to pay more for power.

In an interview with Pulse Business, Executive Director of ACEP, Mohammed Amin Adam says Ghanaians are already paying high tariffs for electricity.

" Ghanaians are already paying higher tariffs than their other counterparts in the West Africa Sub region" he said.

According to the ACEP the move to increase tariffs amount to utility companies passing on their inefficiencies unto the Ghanaian consumer.

" The last time tariffs went up which was March 2015 9, generation cost was 9cents  per kilowatt hour,  where as the West African Sub Regional average is 4 cents per Kilowatt hour. There may be differences in the generation mix, but the differences are not justifiabel."

In Ghana,  Generation cost is between 15 cents and 20 cents per kilowatts hour.

According Dr. Amin Adam, this is innefficient.

" If the West African Sub-regional cost is 4 cents per kilowatt hour,  and ours is as higher as 15, then that's inneficient. This may be he results of the technical inefficiencies we have n the country. And the power is also not availabe. and you plan your financial sustainabiliy on your available power then you are going to charge higher for poweer. And that is daylight roberry."

The Public Utilities Regulatory Commission has been pushing an agenda to increase utility tariffs.

The Electricity Company of Ghana (ECG) has said the constant depreciation of the cedi is the main reason they are  asking for  a 100 percent increment in tariffs. Utility providers in the country are calling for over a hundred percent increment in tariffs for 2015.

The (ECG) wants the present tariff of 16 pesewas per unit to be increased to 35 pesewas, while the Volta River Authority (VRA) is demanding an increase from 15 pesewas to 30 pesewas per unit.

 The Ghana Water Company Limited (GWCL) has also proposed an increase from GH¢1.70 per cubic metre to GH¢4. For its part, GRIDCo wants an increment from 4 pesewas per unit of transmission to 5 pesewas.

The proposals from the service providers were made during a public forum organised by the Public Utilities Regulatory Commission (PURC) in Kumasi on Tuesday. Some Ghanaians who were at the forum rejected the proposals by the utility companies.

According to them, the services provided by both the Electricity Company of Ghana (ECG) and the Ghana Water Company Limited (GWCL) does not warrant any form of increment. However the Public Relations Officer of the ECG, William Boateng explained in an interview  the call for increase is based on high operational cost adding that “we are being measured on the forex exchange.”

Meanwhile the PURC has debunked assertions The Public Utilities Regulatory Commission (PURC) has denied claims that it will apportion for itself a significant percentage of the increase in utility tariffs set to be announced before the end of the year.

The Commission had been accused by some civil society groups of defending utility companies and secretly backing the proposed 100% increase in tariffs.

However, Public Affairs Manager of the Commission, Nana Yaa Jantuah, says the allegations are false.

“I don’t know where this is coming from and everybody is saying because of that we increase tariffs. Do we have to increase tariffs before we get a percentage? It is a necessity. So many things come into play with these tariffs,”
she said.

She said power tariff increases for instance are influenced by exchange rates and the generation mix but not what benefits the PURC would get.

According to her, Ghana's generation mix, where 70% of power is generated by thermal plants and 30% by hydro. "Thermal power generation is very expensive," she notes.

She said due to the worsening power supply situation, the Commission is uncertain when the new tariffs would be announced.

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