Utility Commission announces 52% increase in electricity, 15% in water tariffs
The Public Utilities Regulatory Commission (PURC) has reviewed Electricity and Water tariffs with an increase of 51.73 % for Electricity and 15% for Water for the third quarter of 2015 effective 1st July 2015.
A statement issued by Samuel Kwadwo Sarpong, the Executive Secretary, PURC, said the increases are in line with all the factors that underpin the Automatic Adjustment formula (AAF).
However, it said the Commission has decided to defer the increase for electricity due to the current supply situation but would apply the adjustment for Water because of the notable expansion in water infrastructure and considerable improvement in supply.
The Commission also informed consumers and all stakeholders of its intention to embark on a major Tariff Review Exercise, which would commence from the beginning of the month of July to October, 2015.
It is essential that the Commission embarks on a major Tariff Review Process, as stipulated by Law PURC Act 1997(Act 538) and in accordance with the Electricity and Water Rate Setting Guidelines of the Commission, especially at this moment that the country is expecting additional Electricity Generation.
As part of the major Tariff Review Process, the cost of additional generation of electricity, which is not currently included in the existing End User Tariff is to be examined in addition to the cost components of the existing State-Owned Utility companies (VRA, GRIDCo, ECG, NEDCo and GWCL), as well as existing Independent Power Producers (IPPs) of Electricity and Water.
During this process of the Major Tariff Review the Public would be given the opportunity to interrogate all the cost components of the various service providers and make their comments, which would form part of the input for the final decision on the outcome of the Major Tariff Review Process.
The proposals as submitted by the government owned utility providers and the private owned ones would be extensively published in the media and copies would also be made available at the PURC offices.
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 (AAF), the Ghana Cedi US$ Exchange rate, Rate of Inflation, Fuel Mix (crude oil, Natural Gas, Distillate Fuel) and Generation Mix (Hydro & Thermal)
Others are Power Purchase Cost, Demand Forecast, Chemical Cost (Water) and Electricity Cost(Water).
The Commission, under the Public Utilities Regulatory Commission Act 1997,(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 the Utility Service Providers.