PURC to announce quarterly tariff adjustment

Pulse.com.gh

Dec 20, 2022 9:05 AM

The Public Utilities Regulatory Commission (PURC) has started processes to adjust tariffs to reflect changes in macroeconomic variables such as inflation and exchange rate.

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The review is expected to take effect from January 1, 2023, and the review adjustment will either be increased or decreased.

Dr. Eric Obutey, Head of Research and Cooperate Affairs at the PURC, said “The cedi’s rate against the dollar and inflation are some of the factors we try to correct using the quarterly tariff adjustments. We should be expecting an announcement before the close of 2022 because it is supposed to take effect from the 1st of January.”

In August this year, the regulatory authority announced a 27.15% increase in tariff for electricity and 21.55% for water.

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The increment took effect on September 1, 2022.

PURC called on the public to support utility companies to recoup revenues by reporting illegal connections.

The power distribution company, the Electricity Company of Ghana (ECG), earlier proposed to the PURC seeking approval for the upward review of electricity tariff by 148% for 2022.

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For the subsequent years – from 2023 to 2026 – the ECG is seeking further approval for a 7.6% tariff increase on its Distribution Service Charge (DSC) which is the charge for distributing electricity to Ghanaian households.

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ECG in its multi-year tariff review proposal for the period from 2022-to 2026, asserts the high tariff increase is attributable to the cost of investment projects, the existing gap between actual cost recovery tariff and PURC-approved tariffs, and the effect of macroeconomic factors such as inflation and exchange rate.

The management of the Ghana Water Company (GWCL) in its proposal to the PURC said over the years, the approved tariffs have not been fully cost-reflective.

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This has led to the inability of GWCL to raise enough revenue to finance the much-needed capital investment projects, with a consequent unsatisfactory level of service, the company said.

“Among the urban poor, water can be a critical resource in short supply. GWCL has therefore set up a Low-Income Customer Support Department (LICSD) to deliver improved services to targeted low-income urban poor areas,” it added.