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1st June, 2010
TARIFFS UP...Electricity: 89%, Water: 36%
THE Public Regulatory Commission (PURC) yesterday announced new tariff for utility services which shows 89 per cent increase in electricity and 36 per cent, in water supply.
The new rates fall short of the 159 per cent increase proposed by the service providers.
Announcing the new rates the Chairman of the Commission, Dr. Emmanuel Annan said the increment was in respect of proposals received from utility service providers, namely the Volta River Authority (VRA), the Ghana Grid Company Limited and Electricity Company of Ghan
a and the Ghana Water Company Limited/Aqua Vitens Rand Limited.
Dr. Annan explained that though the companies were requesting 154 per cent increase to enable them cover the cost of operations and investment as well as improve on efficiency, the Commission took cognizance of consumers, and pegged it at 89 per cent for electricity and 36 per cent to water.
He therefore debunked media report that consumers would be made to pay over 120 per cent increase.
In arriving at the percentage, Dr. Annan noted that the Commission solicited the views of a wide range of individual and institutional stakeholders on the proposals taking into account the fact that the service providers had not received any tariff increase since 2007.
It also critically analysed key factors such as operating expenses, the optimum generation mix, demand growth, production forecasts and macro-economic variables.
He noted that consumers in the residential class of between 51 and 150 and pay GH¢12.00 of the same units they consume, will now pay GH¢17.00 an increase of 42 per cent.
Similarly, Dr. Annan said customers who pay GH¢16.00 of the same unit they consume, will be made to pay GH¢21.00, an increment of 31 per cent, while those who pay GH¢19.00 will now pay GH¢23.00, an increase of 21 per cent.
He said in adjusting the tariffs for electricity, the Commission did not lose sight of the social impact and fairness of customers, hence the lifeline tariff for electricity consumers for instance those in the zero-50 units bracket were maintained at the same rate of the kilowatt-hour of electricity they consume.
The Commission, therefore suggested to the service providers particularly ECG fix more electricity meters particularly at compound houses, to help reduce the extent of pressure to the household meters.
With respect to water, Dr Annan said the increment of 32 per cent, was to enable the Ghana Water Company Limited/Aqua Vitens Rand Limited meet key operational cost such as the cost of chemicals for treatment of water, replacement of obsolete equipment as well as maintenance of the system.
For instance consumers who pay GH¢6.6p for the three meters cube of water they consume, will now pay GH¢8.00, an increase of 21 per cent. On the other hand consumers, who pay GH¢9.1p, will now pay GH¢12.0, an increase of 32 per cent.
For non-residential like commercial/industrial institutions, he said those who pay GH¢110 will now pay GH¢180, a difference of 64 per cent. Public institutions and government departments that also pay GH¢110, will now pay GH¢154, an increase of 40 per cent.
Dr Annan said the increment was part of a holistic approach to achieve a balance between demand and supply of both water and electricity and to achieve planned and steady improvements in the delivery of their services.
The Director of Regulatory Economics and Research of PURC, Dr Simon Akorlie said 338,000 customers of ECG who consume between zero and 50 units of electricity will not experience any increment of tariff starting from today. In essence, they will pay the existing rate of electricity they consume.
The beneficiaries, constituting 20 per cent and forming part of two million customers of ECG (excluding those connected to the Northern Electricity Department) currently pay GH¢9.50 being the 9.50 units they consume.
Meanwhile Government says it decided to absorb in excess of GH¢48 million as subsidy on behalf of the domestic consumer class, who usually consume between 0 and 50 units in order to bridge the gap between residential tariff and the full and actual cost of consumption.
“The subsidy we are providing the already overburdened domestic consumer is intended to relieve them of any further hardship, while we continue to work towards creating a Better Ghana”, a statement signed by James Agyenim Boateng, deputy Information Minister said.
It also urged the Ghana Water Company Limited and the Electricity Company of Ghana to reduce their operational and financial wastage, adding that government will be monitoring strictly the management of their operations to ensure that they provide the best of service to consumers.
“Government is meanwhile working on a plan to pay off the huge water and electricity bill arrears it owes the utility companies but urges the companies to strengthen debt collection and move to clamp down on illegal connections.”
The statement said Government has welcomed the decision of the PURC to monitor and ensure that utility companies significantly improve their quality of service.
It said “government is desirous of a service regime that delivers nothing but quality standards and high-level customer service to consumers. “We have not been happy over the period with the frustration and inconveniences the irregular supply of electricity and water have caused many of our people.”
It said Government will continue to invest heavily in social infrastructure with a view to ensuring that water supply improves across the country and also supporting the deployment of equipment for power generation and supply.
“While we expect that the new tariffs approved by the PURC will improve the revenue base of the companies, government will continue to provide the required financial support to provide the necessary infrastructure for the utilities to operate efficiently.” the statement said.
The new rates fall short of the 159 per cent increase proposed by the service providers.
Announcing the new rates the Chairman of the Commission, Dr. Emmanuel Annan said the increment was in respect of proposals received from utility service providers, namely the Volta River Authority (VRA), the Ghana Grid Company Limited and Electricity Company of Ghan
a and the Ghana Water Company Limited/Aqua Vitens Rand Limited.
Dr. Annan explained that though the companies were requesting 154 per cent increase to enable them cover the cost of operations and investment as well as improve on efficiency, the Commission took cognizance of consumers, and pegged it at 89 per cent for electricity and 36 per cent to water.
He therefore debunked media report that consumers would be made to pay over 120 per cent increase.
In arriving at the percentage, Dr. Annan noted that the Commission solicited the views of a wide range of individual and institutional stakeholders on the proposals taking into account the fact that the service providers had not received any tariff increase since 2007.
It also critically analysed key factors such as operating expenses, the optimum generation mix, demand growth, production forecasts and macro-economic variables.
He noted that consumers in the residential class of between 51 and 150 and pay GH¢12.00 of the same units they consume, will now pay GH¢17.00 an increase of 42 per cent.
Similarly, Dr. Annan said customers who pay GH¢16.00 of the same unit they consume, will be made to pay GH¢21.00, an increment of 31 per cent, while those who pay GH¢19.00 will now pay GH¢23.00, an increase of 21 per cent.
He said in adjusting the tariffs for electricity, the Commission did not lose sight of the social impact and fairness of customers, hence the lifeline tariff for electricity consumers for instance those in the zero-50 units bracket were maintained at the same rate of the kilowatt-hour of electricity they consume.
The Commission, therefore suggested to the service providers particularly ECG fix more electricity meters particularly at compound houses, to help reduce the extent of pressure to the household meters.
With respect to water, Dr Annan said the increment of 32 per cent, was to enable the Ghana Water Company Limited/Aqua Vitens Rand Limited meet key operational cost such as the cost of chemicals for treatment of water, replacement of obsolete equipment as well as maintenance of the system.
For instance consumers who pay GH¢6.6p for the three meters cube of water they consume, will now pay GH¢8.00, an increase of 21 per cent. On the other hand consumers, who pay GH¢9.1p, will now pay GH¢12.0, an increase of 32 per cent.
For non-residential like commercial/industrial institutions, he said those who pay GH¢110 will now pay GH¢180, a difference of 64 per cent. Public institutions and government departments that also pay GH¢110, will now pay GH¢154, an increase of 40 per cent.
Dr Annan said the increment was part of a holistic approach to achieve a balance between demand and supply of both water and electricity and to achieve planned and steady improvements in the delivery of their services.
The Director of Regulatory Economics and Research of PURC, Dr Simon Akorlie said 338,000 customers of ECG who consume between zero and 50 units of electricity will not experience any increment of tariff starting from today. In essence, they will pay the existing rate of electricity they consume.
The beneficiaries, constituting 20 per cent and forming part of two million customers of ECG (excluding those connected to the Northern Electricity Department) currently pay GH¢9.50 being the 9.50 units they consume.
Meanwhile Government says it decided to absorb in excess of GH¢48 million as subsidy on behalf of the domestic consumer class, who usually consume between 0 and 50 units in order to bridge the gap between residential tariff and the full and actual cost of consumption.
“The subsidy we are providing the already overburdened domestic consumer is intended to relieve them of any further hardship, while we continue to work towards creating a Better Ghana”, a statement signed by James Agyenim Boateng, deputy Information Minister said.
It also urged the Ghana Water Company Limited and the Electricity Company of Ghana to reduce their operational and financial wastage, adding that government will be monitoring strictly the management of their operations to ensure that they provide the best of service to consumers.
“Government is meanwhile working on a plan to pay off the huge water and electricity bill arrears it owes the utility companies but urges the companies to strengthen debt collection and move to clamp down on illegal connections.”
The statement said Government has welcomed the decision of the PURC to monitor and ensure that utility companies significantly improve their quality of service.
It said “government is desirous of a service regime that delivers nothing but quality standards and high-level customer service to consumers. “We have not been happy over the period with the frustration and inconveniences the irregular supply of electricity and water have caused many of our people.”
It said Government will continue to invest heavily in social infrastructure with a view to ensuring that water supply improves across the country and also supporting the deployment of equipment for power generation and supply.
“While we expect that the new tariffs approved by the PURC will improve the revenue base of the companies, government will continue to provide the required financial support to provide the necessary infrastructure for the utilities to operate efficiently.” the statement said.
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