The first quarter of this year will see an increase in electricity and water rates, according to the Public Utilities Regulatory Commission (PURC).
The new rates, which go into effect on February 1, 2023, will result in an overall electricity price increase of 29.96% for all customers and an increase in water prices of 8.33%.
In contrast, as part of the ongoing restructuring of the current water rate structure, the commission approved a variety of rate adjustments, including some reductions for certain industrial and commercial consumers.
The new tariff review was prompted by exchange rate volatility, rising inflation, generation mix, and weighted average cost of natural gas, according to a statement issued yesterday and signed by the PURC’s Executive Secretary, Dr Ishmael Ackah.
Tariffs are being reviewed for the second time in six months.
The commission approved a 27.15 percent increase in electricity and a 21.55 percent increase in water beginning September 1, 2022.
It was subject to a significant tariff adjustment at the time.
The new review, according to the executive secretary, complied with the quarterly tariff review process and rules outlined in the Commission’s major tariff review decision from August 2022.
According to him, the mechanism for reviewing tariffs every quarter aimed to monitor and take into account changes to the important variables that went into determining the prices for natural gas, electricity, and water.
According to him, the goal was to keep the real value of the cost of providing those utility services while preventing utility companies from under- or over-recovering.
He asserted that under-recovery had an adverse effect on the companies’ capacity to provide service to customers and had the potential to reduce water supply and cause electricity outages (DUMSOR).
According to him, excessive recovery put an unnecessary burden on water and electricity users.
The mechanism for the quarterly tariff review, he continued, was designed to make sure that none of these things occurred.
Even though Dr. Ackah hinted that the PURC was aware of the current dire economic situation, he added that “the potential for outages would be catastrophic for Ghana and has to be avoided.”
He clarified that the commission sought to strike a balance between preventing prolonged power outages and their damaging effects on livelihoods and employment, as well as minimising the impact of rate increases on consumers.
Therefore, the commission made the decision to raise the average end-user tariff for electricity by 29.96% for all consumer groups. The average end-user water tariff has also gone up by 8.3%, he continued.
Mr Seth Twum-Akwaboah, CEO of the Association of Ghana Industries (AGI), expressed industry dissatisfaction with the new tariff adjustments, stating that the increase of 29.96% across the board for all consumers was excessive.
“We will communicate with the PURC in the upcoming days and let them know of our concerns. After a 27.15 increase almost five months ago, the timing of the adjustment is deeply worrying to us, Mr. Twum-Akwaboah said.
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