Businesses particularly those in the mining sector, are expected to save millions of dollars to be channeled into other investments to grow their companies following the reduction in electricity tariffs.
The Public Utilities Regulatory Commission (PURC), on Monday, March 5, 2018, announced that electricity tariffs will go down between 10 and 30 percent for various categories of consumers.
The decision follows the completion of the necessary consultations with all stakeholders in the energy sector.
The Executive Secretary of the Public Utilities Regulatory Commission (PURC), Maame Dufie Ofori justified the basis for reduction in the utility tariffs for consumers.
Speaking on Eyewitness News, Madam Dufie Ofori attributed the decision to declines in key components of the tariff.
“Gas price has come down; at the time they were asking for proposals, the hydro allocation was only 60 percent. Now it is 65 percent which means it is a cheaper source of generation. Because of the renegotiated power purchase agreement, their capacity charges have gone down ranging between 20 to 25 percent and also their losses too have been reviewed,” she stated.
Citi Business News has been speaking to some businesses and they are highly expectant of the massive reduction in cost of operation.
For mining companies that are to enjoy some ten percent reduction in tariffs effective the 15th of this month, the news means they could be saving as much as 2 million to 3 million dollars annually.
The Director of External Affairs and Communications at the Ghana Chamber of Mines Ahmed Nangtomah says this should improve operations in the mining sector.
“So the companies that are with the ECG will be impacted by this direction and to them it is good news because 10 percent reduction in electricity bills is good enough for some of the companies who spend up to about 28 million dollars a year on electricity needs. So they will just factor this into their costing. They can save now and improve efficiency along the line.”
Meanwhile, the Ghana Union of Traders Association (GUTA), whose members comprise non residential users, has equally lauded the reduction.
As the Executive Member of GUTA, Benjamin Yeboah explains, the 30 percent drop should reflect significantly in the cost of doing business for members.
“Every user has a separate regulatory meter so definitely if we know that the you usually buy let’s say 500 cedis or 1,000 cedis for a month and you are using the same gadgets, definitely now if you should buy that much a month, you will realize that at the end of the month you will have some reduction so definitely you will be able to save.”
While admitting that it may be too late for residential consumers to be considered in the reductions, the Executive Director of the Consumer Protection Agency, Kofi Kapito maintains the reduction should bring respite to consumers.