PURC responds to IES, claiming that utility tariff increases are justified.


 The recent increase in utility prices has been justified by the Public Utilities Regulatory Commission (PURC).

This comes after the Institute of Energy Security (IES), described as baseless factors accounting for the recent notice by the Public Utility Regulatory Commission for an increase in utility tariffs.

Electricity and water rates are set to rise by 30 and 8.3 percent, respectively, beginning February 1.

While identifying inflation as a factor, the Commission stated that the cost of the energy generating mix has also increased due to the cedi's devaluation.


Ishmael Ackah, Executive Secretary of the Public Utilities Regulatory Commission, stated that IES' assumptions are incorrect.

"In Ghana, around 60% of our generating is thermal, and approximately 40% is hydro. But with the hydro, we have the legacy hydro, Akosombo, Kpong and Bui. The legacy is where we come in. There is now also a statute establishing the power market supervision body. As a result, not all hydro comes to what we term the regulated market."

"They [IES] say, the hydro would be 38 percent and out of this, we want to provide five percent to Ghana water. VRA also has additional export contracts. We are also contributing 5% of the export. Then there's the unregulated market. When we take all of these components away, everything I said contributed roughly 33%."

"So the component of the 38 percent that came to the regulated market, the 67 percent that we utilized, that is what we split between ECG, NEDCo and Enclave Power and when you do the numbers, you get the 26 percent. "Perhaps they didn't see this," he explained.

"They [IES] say, the hydro would be 38 percent and out of this, we want to offer five percent to Ghana water. VRA also has other export contracts. In addition, we provide 5% of the export. There's also the uncontrolled market. When we remove all of these factors, what I stated contributed around 33%."

"So the 67 percent that we utilized, the component of the 38 percent that came to the regulated market, that is what we split between ECG, NEDCo, and Enclave Power, and when you do the figures, you get the 26 percent."

"Perhaps they didn't notice," he reasoned.

"IES thus requests that the PURC reassess the energy mix assumption used in the tariff adjustment (to reflect better water-head levels), since this has an effect on the Weighted Average Cost of Gas, which has been revised to $6.0952/MMBtu from $5.9060MMBtu. The IES believes that this will provide some respite to already stressed citizens in the face of the current economic crisis."

Read IES’ full statement here

ABDUL-WAHAB

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