Perhaps it was the public uproar or the backlash that greeted the announcement or it was the fact that it was only made after ACEP’s demand but it happened anyway.
Whatever the reason, the Public Utilities Regulatory Commission (PURC) in a rare move today organized a press conference to justify its announcement of an 11.17% increase in electricity.
The announcement came after the PURC in 2018 reduced electricity tariffs by 17.5% for residential customers in concurrence with an earlier downward review by President Akufo-Addo in his second state of the Nation’s address.
By February 2019, a case was being made for a reversal with all major power companies on their knees and waist deep in debt.
After listening to the all sector players, the PURC made an announcement on February 27, 2019; but it was not the one the power producers and distributors expected.
It was rather a postponement of the review to July 1, 2019 which at the time seemed a century away.
Enough time for most Ghanaians to forget until they were reminded by the African Center for Energy Policy (ACEP) who were concerned that the PURC had failed to make an announcement less than two weeks to July 1.
Whether planned or unplanned, the PURC announced a tariff increment, a day after the ACEP statement and directed consumers to their website to read for themselves the reasons for the increment.
One thing they didn’t fail to mention however is the fact that it is in the interest of the financial viability of the power companies; perhaps a confirmation of the debt distress in the energy sector.
Today’s press conference, called a few days after the announcement provided further details of the factors that went into the decision.
Executive Secretary of the PURC Mami Dufie Ofori in her address mentioned ten factors as being responsible for the decision.
When yours truly posed the question as to what has changed following the reduction, two clear factors popped out.
Chairman of the Technical Committee that led the review Ishmael Agyekumhene mentioned the exchange rate and inflation.
According to him both elements had changed and given rise to the need for an increment with dollar now pegged at GH₵5.05 as against the GH₵4.43 that was used in March 2018.
The PURC is currently using an inflationary rate 8%.
Other factors mentioned in Mami Dufie Ofori’s statement are the projected fuel prices over the 2019/2020 period of the tariff review, Expected increase in electricity demand, an 8.6% increase in volume of Electricity to be Transmitted and transmission system losses of 4.1%.
Story: Sena Nombo/Radiogoldlive.com
