The Chamber of Independent Power Producers Distributors and Bulk Consumers (CIPDiB), has expressed disappointment at the call for an increment in electricity tariffs by the Electricity Company of Ghana (ECG).
According to the Chamber, the government has engaged the IPPs to reduce their capacity charges or tariffs to the ECG, to make the price of electricity competitive and to enable ECG raise the required revenue to pay all the actors within the power distribution value chain.
In an interview with Citi Business News, Executive Director of the Chamber of Independent Power Producers Distributors and Bulk Consumers, Dr. Elikplim Apetorgbor noted that instead of focusing on tariffs, government should come out with a systematic approach to addressing the various challenges in the sector.
“You know, the cumulative proposal circulated for an increase in electricity tariff was actually necessitated by the government of Ghana policy decision in 2018 that compelled PURC to reduce tariffs by about 21% on average. And from that time till date the sector has been starved because ECG was not able to meet the required revenue to pay the upset on the electricity supply value chain. Then government intermittently provided full payment out of its budget allocation to clear the accumulated debt. So to me, this situation is purely avoidable in this hard economic situation.”
“Again, you will recall that the government of Ghana has engaged the IPPs to reduce their capacity charges or tariffs and this consideration rather I think should have maintained tariffs levels under this economic condition if not reduced it. Because if we the power generators are reducing our tariffs or our capacity charges, it is creating a gap that will add up to ECG’s revenue requirements. So in this case, ECG doesn’t have to call for additional revenue at this time. Again, what are we doing about their level of efficiency, reduction in their wastages so that we don’t necessarily put consumers under severe pressure,” he said.
ECG proposes 148% increase in electricity tariff for 2022
The Electricity Company of Ghana had called for tariffs to be increased by 148% for 2022 in its proposal document forwarded to the PURC.
According to ECG, the sharp proposed increment, is due to the gap between the actual cost recovery tariff and PURC-approved tariffs, as well as the cost of completed projects.
The Ghana Water Company also proposed an increment in its tariffs to be able to at least recover its costs.