Public Utilities Regulatory Commission Calms Nerves

The Public Utilities Regulatory Commission (PURC) has reiterated that the highest percentage increase within the residential class of electricity customers is 42 per cent and not the 89 per cent as being reported.

At a two-day sensitization workshop organized by PURC for journalists at Aburi in the Eastern Region, Director of Regulatory Economics and Research at PURC, Dr Simons Akorli said residential consumers of electricity would pay between 0 and 42 per cent for electricity depending on consumption and between 21 and 32 per cent for water.

“A thorough analysis was done for the proposals submitted by the utility providers before arriving at the tariffs. Besides, social considerations of the impact of the new tariffs on domestic consumers and people in the low income bracket were carefully considered before arriving at the final rate,” he stated.

Dr Akorli emphasized that over 430,000 consumers, who constitute 20 per cent of ECG’s consumers and Northern Electricity Development (NED) consumers (2.3 million), fall within the lifeline of 0-50 units and would not experience any increment since the commission considered the social and economic status of the people who fell within that category.

In addition, he said a low percentage of 21had been made for those who live in compound houses to reduce the impact of the high units that they accumulate because of the use of one meter, noting that residential customers are now paying 42 per cent instead of 56 per cent.

Dr Akorli said in arriving at the tariffs, the PURC considered the total revenue required by the three utilities to enable them provide efficient service to customers. “For instance, a total revenue of GH¢1.9 billion was required by the three utilities namely Volta River Authority (VRA), GRIDCo and ECG for the year to be able to generate, transmit and distribute power.

“Out of the amount, GH¢1.2 billion was required to generate, transmit and distribute power to the regulated market for 2010,” he stated. Dr Akorli said out of the GH¢1.2 billion, the regulated market, which PURC used in computing the tariffs, was GH¢ 803 million which the utilities required for the next seven months, starting from June 1 to December 31, 2010.

“This amount was then allocated on the basis of how much it would cost to supply electricity to each customer class,” he said, adding that the average tariff of 89 per cent was only an indication of the level of revenue which is required by VRA, GRIDCO and ECG to produce the quantum of electricity needed by consumers.

On water, Dr Akorli said domestic consumers who previously paid 66 pesewas for 220 gallons would now pay 80 pesewas for the same volume of water, representing a 21 percent increase for residential users. The Executive Secretary of the PURC, Stephen Adu said the increases would improve the utility sector to provide efficient and reliable service.

He said PURC would step up monitoring system to ensure that the utility service providers adhere to the benchmarks and performance targets set for the utility providers (water and electricity). He said in default they would be made to pay penalties, explaining that they would also face sanctions.

Mr Adu expressed the hope that once natural gas, which is relatively lower than crude oil, comes on stream the cost of generating power would go down and this would be factored into the determination of the tariffs. He said consumers, who have problems with the utility providers, should not hesitate to come to the PURC for redress.