ECG Proposes 225% Increase in Distribution Service Charge to PURC
- The Electricity Company of Ghana is pushing for a massive increase in its distribution charge
- The power distributor has proposed the hikes to the Public Utilities Regulatory Commission
- The company has made the case that this increase is necessary to avert financial collapse
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The Electricity Company of Ghana has proposed a massive 225% increase in its Distribution Service Charge.
Joy News reported that this proposal was sent to the Public Utilities Regulatory Commission.
Source: Getty Images
The Electricity Company of Ghana has argued that the increase is necessary to avert financial collapse.
The proposed new charge would see the Distribution Service Charge rise from its current GHp19.0384/kWh to GHp61.8028/kWh for the period between 2025 and 2029.
The Distribution Service Charge constitutes 11% of the total electricity value chain cost, which is below the global benchmark of 30-33%.
This deficit, coupled with the Ghana cedi’s depreciation of about 74% between 2022 and 2024, has reduced the real value of the company’s revenue by 45%.
According to projections, the new tariff will enable the Electricity Company of Ghana to significantly reduce power outages.
The Electricity Company of Ghana also projects a reduction in system losses from 27% to 22% and an increase in revenue collection efficiency from 87% to over 90% during the period.
The final decision on the proposed tariff rests with the Public Utilities Regulatory Commission, which is mandated to review proposals and hold public consultations before any new rates are implemented.
Any changes will only take effect after the Public Utilities Regulatory Commission's approval and a public announcement.
Recent electricity tariff increases
From July 1, the Public Utilities Regulatory Commission raised electricity tariffs for all categories of consumers by 2.45%.
The commission factored in key economic variables, including the cedi-to-dollar exchange rate, inflation, natural gas prices, and the electricity generation mix between hydro and thermal sources.
According to the Public Utilities Regulatory Commission, these factors significantly impact the cost of delivering utility services and must be reviewed regularly to sustain the financial health of service providers.
Before the July increase, electricity tariffs were increased by an average of 14.75%.
The Electricity Company of Ghana's revenue challenges prompted a Nationwide Revenue Mobilisation exercise, which began on June 16.
Source: Getty Images
It focused on all categories of customers with arrears, spanning residential, commercial, industrial and Ministries, Departments and Agencies.
The exercise is being monitored by special teams looking to apprehend and prosecute customers who attempt to interfere with the exercise.
For example, the Electricity Company of Ghana uncovered illegal electricity supply to over 400 homes at Rehoboth Estate in Kweiman.
ECG disconnects Ghana Water over debt
YEN.com.gh reported that the Electricity Company of Ghana was compelled to disconnect the Ghana Water Company Limited from the national power grid
Ghana Water Company Limited was said to owe the Electricity Company of Ghana GH¢1 billion.
The Electricity Company of Ghana also disconnected the Ghana Broadcasting Corporation over a GH¢3 million debt.
Proofreading by Samuel Gitonga, copy editor at YEN.com.gh.
Source: YEN.com.gh
