Four Reasons ECG And Ghana Water Want Over 100% Tariff Increases

Four Reasons ECG And Ghana Water Want Over 100% Tariff Increases

  • The ECG and GWCL have given many reasons for the proposed increases in tariffs by more than 100% for this year
  • The increased cost of production and expenditure on new projects were cited among the reasons by the two utilities for the proposed hikes
  • ECG wants the regulator to approve an increase of 148% while the GWCL wants an increase of 334%

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The Electricity Company of Ghana (ECG) and the Ghana Water Company Limited (GWCL) are pushing for over 100% increases in tariffs for 2022.

While the ECG wants tariffs to be increased by 148% for 2022 and again by 7.6% between 2023 to 2026, the GWCL wants tariffs to be increased by a whopping 334%.

ECG and water tariff
The utility companies say the proposed increases are critical for their operation. Source: Facebook/@newsghana, Getty Images
Source: UGC

In a report to the Public Utilities Regulatory Commission (PURC), the regulator of utility tariffs and quality of service, the two utility companies have appealed for the proposals to be approved.

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Sitting presidents must pay utility bills like ordinary Ghanaians – Kofi Kapito has gathered the following reasons given by the ECG and GWCL for the proposed tariff increments.

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1. ECG and GWCL said there has been a significant gap between the actual cost of recovery tariff and the tariff approved by the PURC for many years. The two utility tariffs say the PURC-approved tariffs do not reflect the high cost of production.

2. The PURC’s refusal to approve the previously proposed tariffs was taking a toll on operations. The GWCL, for instance, said it is unable to raise enough revenue to finance the much-needed capital investment projects due to the current tariff paid by water consumers. The water company blames this for the unsatisfactory level of service.

3. The GWCL also said the proposed tariff will enable it to pay a monthly loan of $7.93 million, which is currently 47.15% of its average monthly revenue. The water company also said the proposed tariff increments have been largely driven by exchange rate depreciation and a paradigm shift in government economic policies. The GWCL also stated that the new tariffs it has proposed will enable it to deliver world class service.

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4. The ECG also cited the cost of investment projects for the proposed tariff increases for 2022, noting that “the gap that has developed over the years between the actual cost recovery tariff and the PURC approved tariffs; the continual application of the prevailing tariff (which was a 14% reduction) beyond the stipulated regulatory period (2019-2020); and the effect of macroeconomic factors.”

The PURC is expected to soon issue a statement on whether it will approve the proposed tariffs or not.

Ghana Among Top 10 African Countries In Ranking On Best Access To Electricity; Beats Nigeria, Kenya

In a separate story, reported that data by the 'Tracking SDG7: The Energy Progress Report' on access to electricity in 20 African countries shows Ghana listed among the top ten countries with the best access.

Ghana is ranked 7th with 85% access to power nationwide, just below South Africa's 6th position with 84% access to power.

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Transport fares go up by 30% from next week; GPRTU criticises govt’s refusal to cooperate

Ghana also beats notable countries like Nigeria, Kenya, Ivory Coast, and Cameroon, among other nations.

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