PURC announces marginal increases in Q2 tariffs
Water tariffs are also to go up by 1.06 per cent, the Commission said in a statement signed by Stephen Akuoko, Acting Chairman, on Thursday
“In calculating the Tariffs for the second quarter Automatic Adjustment Formula, the Commission arrived at an actual increase of 31.73% cumulative for electricity and 2 1.30% for water. However, the Commission using the decision Variable decided to pass on a minimal Tariff increase of 2.63% for Electricity and 1.06% for Water,” the statement explained.
It said the action by the Commission had been necessitated by the current electricity situation where consumers are spending extra income on the acquisition of other alternative sources of electricity.
“This increase is meant to preserve the current load share situation by assisting the Electricity Distribution Companies to maintain its network under the current circumstances to avoid an immediate collapse of the distribution network,” the statement added.
It should also be recalled that the GWCL was denied a 4.54% Water Tariff increase as a form of a penalty during the fourth quarter of 2014 due to the non-compliance with Regulatory Directive, but fortunately they have fulfilled the benchmark.
Therefore, the Commission has released for implementation effective April 1, 2015 the gazetted water tariff for the fourth quarter of 2014.
The Commission in arriving at a Tariff decision always considers the smoothening impact of the variables of the Automatic Adjustment Formula (AAF) and does not consider spikes that are associated with the movements of Water and Electricity Tariffs.
The Automatic Adjustment Formula (AAF) is a Tariff Mechanism that seeks to track and incorporate movements in key determining factors to reflect the cost of Electricity and Water every quarter.
The following factors are considered in computing the Automatic Adjustment Formula: Ghana Cedi LJS$ Exchange Rate, Inflation Fuel Mix (Crude Oil, Natural Gas, and Distillate Fuel) and Generation Mix (Hydro and Thermal).
Other factors are Power Purchase Cost, Demand Forecast, Chemical Cost (Water) and Electricity Cost (Water).
The Commission, under the Public Utilities Regulatory Act1997 (Act 538), has the mandate to examine and approve rates chargeable for the provision of Utility Services whilst at the same time protecting the interest of Consumers and ensuring the financial viability of Utility Service Providers.