May 28, 2022

ECG’s tariff increment proposal needful – ACEP

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The Executive Director of the Africa Centre for Energy Policy (ACEP), Benjamin Boakye, has explained importance of the proposal made by the Electricity Company of Ghana to increase its tariffs by nearly 150 percent.

According to him, the negative impact of the cedi depreciation, coupled with the increment in prices of goods and services, are some reasons for the tariff adjustments.

Benjamin Boakye in an interview, said given that the last time tariffs were increased was in 2019, the value of the monies collected since then has depreciated by at least 30 percent, demanding that the deficit be covered in order to help the power distribution companies to stay afloat.

 

“The existing tariffs were issued in 2019 and just by accounting for the depreciation of the cedi alone; it has lost about 30 percent of its value. Beyond that, things have become really expensive. Price movement and components across the board have increased, so you need to adjust the prices to account for some of those things that affect their operations,” he said.

The Electricity Company of Ghana had proposed that its tariffs be increased by 148% for 2022 and with 7.6% average adjustments between the periods of 2023 to 2026.

The proposed sharp increment, according to ECG, is due to the gap between the actual cost recovery tariff and PURC-approved tariffs as well as the cost of completed projects.

It made the call in a document presented to the Public Utilities Regulatory Commission (PURC).

The Ghana Water Company, in a similar document, is also proposing an increment in its tariffs to be able to at least recover its operational cost.


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